(Exact Name of Registrant)
(Exact Name of Depositor)
150 North Radnor Chester Road
Radnor, PA 19087
350 Church Street
| • | AIM Variable Insurance Funds (Invesco Variable Insurance Funds) |
| • | AllianceBernstein Variable Products Series Fund |
| • | American Century Variable Portfolios, Inc. |
| • | American Funds Insurance Series® |
| • | BlackRock Variable Series Funds, Inc. |
| • | Delaware VIP® Trust |
| • | Deutsche DWS Variable Series II |
| • | Fidelity® Variable Insurance Products |
| • | Franklin Templeton Variable Insurance Products Trust |
| • | JPMorgan Insurance Trust |
| • | Legg Mason Partners Variable Equity Trust |
| • | Lincoln Variable Insurance Products Trust |
| • | MFS® Variable Insurance Trust |
| • | Northern Lights Variable Trust |
| • | PIMCO Variable Insurance Trust |
| Table I: Transaction Fees | ||
| Charge | When Charge is Deducted | Amount Deducted |
| Maximum Sales Charge as a percentage of Premiums paid (Premium Load). Note: Includes 3% charge for state premium and federal tax obligations. | When you pay a Premium. | 10% in Policy Years 1-5; 6% in Policy Years 6-10; and 3% in Policy Years 11 and beyond.1 |
| Surrender Charge*2 | ||
| A dollar amount per $1,000 of Specified Amount. | For up to 15 years from the Policy Date and up to 15 years from the effective date of each increase in Specified Amount, a Surrender Charge will be deducted at the time you effect a Full Surrender of your Policy. For up to 15 years from the Policy Date or up to 15 years from the effective date of each increase in Specified Amount, a Surrender Charge may be deducted at the time you effect a Reduction in Specified Amount. | |
| Maximum Charge | $49.23 per $1,000. | |
| Maximum Charge for a Representative Insured: male, 45, standard non-tobacco, in year one. | $34.29 per $1,000. | |
| Transfer Fee | Applied to any transfer request in excess of 24 made during any Policy Year. | $25 |
| * | These charges and costs vary based on individual characteristics. The charges and costs shown in the table may not be representative of the charges and costs that a particular Owner will pay. You may obtain more information about the particular charges that would apply to you by requesting a personalized policy illustration from your registered representative. |
| 1 | The Maximum Sales Charge Imposed on Premiums is anticipated to cover the Company's costs for sales expenses and any policy-related state and federal tax liabilities. Policy-related taxes imposed by states range from 0% to 5%. In considering policy-related state taxes component of the sales charge, the Company considers the average of the taxes imposed by the states rather than any taxes specifically imposed by the state in which the Owner resides. We use an average of 3% to account for state and federal tax obligations. |
| 2 | During the life of the Policy, you may request one or more Partial Surrenders, each of which may not exceed 90% of your Policy's Surrender Value as of the date of your request. If you wish to surrender more than 90% of your Policy's Surrender Value, you must request a Full Surrender of your Policy, which is subject to the Surrender Charge reflected in the table above. (See section headed “Partial Surrenders” for a discussion of Partial Surrenders of your Policy.) |
| Table II: Periodic Charges Other Than Fund Operating Expenses | ||
| Charge | When Charge is Deducted | Amount Deducted |
| Cost of Insurance* | Monthly | |
| A dollar amount per $1,000 of Net Amount at Risk | ||
| Maximum Charge1 | $83.33 per $1,000. | |
| Minimum Charge | $0.00 per $1,000. | |
| Maximum Charge for a Representative Insured: male, age 45, standard non-tobacco, in year one. | $0.19 per $1,000. | |
| Maximum Mortality and Expense Risk Charge (“M&E”) | At the end of each Valuation Period | |
| A percentage of the value of the Separate Account, calculated daily. | ||
| Maximum Charge | 1.15%2 (effective annual rate) | |
| Maximum Administrative Fee* | Monthly | |
| Flat fee; plus | $15 in all years | |
| For the first 10 Policy Years from Policy Date or increase in Specified Amount, a monthly fee per $1,000 of Initial Specified Amount or increase in Specified Amount: | ||
| Maximum Charge | $5.58 per $1,000. | |
| Minimum Charge | $0.01 per $1,000. | |
| Maximum Charge for a Representative Insured: male, age 45, standard non-tobacco. | $0.37 per $1,000. | |
| Policy Loan Interest | Annually | |
| A percentage of the amount held in the Loan Account. | 6%3 | |
| Table II: Periodic Charges Other Than Fund Operating Expenses (continued) | ||
| Charge | When Charge is Deducted | Amount Deducted |
| Interest on Accelerated Benefit Lien | Annually | |
| A percentage of Accelerated Benefit Up to Surrender Value | 6% | |
| A percentage of Accelerated Benefit Exceeding Surrender Value | Variable4 | |
| No-Lapse Enhancement Rider | N/A | There is no charge for this rider.5 |
| Overloan Protection Rider | One-time charge when you elect to use the benefit. | |
| A percentage of the then current Accumulation Value. | ||
| Maximum Charge | 3% | |
| Optional Rider Charges | Individualized based on whether optional rider(s) selected. | |
| Basic Accelerated Benefits Riders6 | When any benefit payment is made | $250 (deducted from amount of benefit paid) |
| Change of Insured Rider | N/A | There is no charge for this rider. |
| Enhanced Surrender Value Rider | Monthly (in Policy Years 2-5 only) | |
| A dollar amount per $1,000 of Initial Specified Amount. | $0.0625 | |
| Premium Reserve Rider A percentage of the Premium Payment allocated to this rider | When you allocate a Premium Payment to this rider | 10% in Policy Years 1-5; 6% in Policy Years 6-10; 3% in Policy Years 11 and beyond.7 |
| Lincoln LifeEnhance® Accelerated Benefits Rider Cost of Insurance* | Monthly | |
| A dollar amount per $1,000 of Net Amount at Risk or Rider Net Amount at Risk, whichever is applicable at the time. | ||
| Maximum Charge8 | $59.98 per $1,000. | |
| Minimum Charge | $0.00 per $1,000. | |
| Table II: Periodic Charges Other Than Fund Operating Expenses (continued) | ||
| Charge | When Charge is Deducted | Amount Deducted |
| Maximum Charge for a Representative Insured: male, age 45, standard non-tobacco, in year one. | $1.93 per $1,000. | |
| Lincoln LifeAssure® Accelerated Benefits Rider | When any benefit payment is made | $250 (deducted from amount of benefit paid) |
| Lincoln Care CoverageSM Accelerated Benefits Rider | Monthly | |
| Administrative LTC Rider Fee per $1,000 of Initial LTC Specified Amount for the first 10 Policy Years from Policy Date; | ||
| Maximum Charge* | $0.035 per $1,000 | |
| Minimum Charge | $0.002 per $1,000 | |
| Maximum Charge for a Representative Insured: male, age 45, couples discount. | $0.008 per $1,000 | |
| Plus a dollar amount per $1,000 of Rider Net Amount at Risk | ||
| Maximum Charge* | $1.78123 per $1,000 | |
| Minimum Charge | $0.00165 per $1,000 | |
| Maximum Charge for a Representative Insured: male, age 45, couples discount, 2% Maximum Monthly LTC Benefit Percentage, in year one. | $0.00211 per $1,000 | |
| Waiver of Monthly Deduction Rider9 | Monthly | |
| Rate factor is percent of all other covered monthly charges. | ||
| Maximum Charge | 12% | |
| Minimum Charge | 2% | |
| Table II: Periodic Charges Other Than Fund Operating Expenses (continued) | ||
| Charge | When Charge is Deducted | Amount Deducted |
| Maximum Charge for a Representative Insured: male, age 45, standard non-tobacco. | 3.5% | |
| * | These charges and costs vary based on individual characteristics. The charges and costs shown in the table may not be representative of the charges and costs that a particular Owner will pay. You may obtain more information about the particular charges that would apply to you by requesting a personalized policy illustration from your registered representative. |
| 1 | Individuals with a higher mortality risk than standard issue individuals can be charged from 125% to 800% of the standard rate. However, under no circumstances would it be higher than the maximum amount shown in the table above. |
| 2 | Guaranteed at an effective annual rate of 1.15% in Policy Years 1-10 and 0.45% in Policy Years 11 and beyond. |
| 3 | Although deducted annually, interest accrues daily. As described in the section headed “Policy Loans”, when you request a Policy Loan, amounts equal to the amount of the loan you request are withdrawn from the Sub-Accounts and the Fixed Account in proportion to their respective values. Such amount is transferred to the Loan Account, which is part of the Company’s General Account. Amounts in the Loan Account are credited interest at an effective annual rate guaranteed not to be less than 5% in Policy Years 1-10 and 6% in Policy Years 11 and beyond. |
| 4 | Under the Basic Accelerated Benefits Riders, payments of benefits are considered as liens, which as described more fully in the section headed “Policy Loans”, are charged interest as shown in the Table above. Variable interest shall be at a rate not to exceed higher of (i) published monthly average of Moody's Corporate Bond Yield Average - Monthly Average Corporates (determined 30 days in advance of beginning of Policy Year) and (ii) the rate used to compute the Accumulation Value of the Fixed Account plus 1%. Although deducted annually, interest accrues daily. As described in the section headed “Policy Loans”, when you request an Accelerated Benefit, amounts equal to the amount of the Accelerated Benefit you request are withdrawn from the Sub-Accounts and the Fixed Account in proportion to their respective values. Such amount is transferred to the Loan Account, which is part of the Company’s General Account. Amounts in the Loan Account are credited interest at an effective annual rate guaranteed not to be less than 5% in years 1-10 and 6% in years 11 and beyond. |
| 5 | There is no separate charge for the No-Lapse Enhancement Rider. The Cost of Insurance Charge for the Policy has been adjusted to reflect the addition of the rider to the Policy. See No-Lapse Enhancement Rider section for further discussion. |
| 6 | There are two versions of this rider; see Riders section for detailed discussion of the terms of each rider, and note that the payment of a benefit under either version of the rider is considered a loan against the Policy. |
| 7 | Allocations of Premium Payments to the rider are at your discretion. Allocations of Premium Payments to the rider are subject to the charge shown in Table II and are not subject to the “Maximum Sales Charge Imposed on Premiums” shown in Table I. This charge is called the Premium Reserve Rider Premium Load. Rider Accumulation Value allocated to the Separate Account is subject to the Mortality and Expense Risk Charge (which does not exceed 1.15% for Policy Years 1-10 and 0.45% in Policy Years 11 and beyond). |
| 8 | Individuals with higher mortality risk than standard issue individuals can be charged from 125% to 200% of the standard rate. However, under no circumstances would it be higher than the maximum amount shown in the table above. |
| 9 | These charges and costs vary based on individual characteristics. The charges and costs shown in the tables may not be representative of the charges and costs that a particular Owner will pay. You may obtain more information about the particular charges, cost of insurance, and the cost of certain riders that would apply to you by requesting a personalized policy illustration from your registered representative. |
| Table III: Total Annual Fund Operating Expenses (expenses that are deducted from fund assets) | ||
| Total Annual Operating Expense | Maximum | Minimum |
| Total management fees, distribution and/or service (12b-1) fees, and other expenses. | 2.07% 1 | 0.24% |
| 1 | The Total Annual Operating Expenses shown in the table do not reflect waivers and reductions. Underlying Funds may offer waivers and reductions to lower their fees. Currently such waivers and reductions range from 0% to 0.56%. These waivers and reductions generally extend through April 30, 2020 but may be terminated at any time by the Underlying Fund. Refer to the Underlying Fund’s prospectus for specific information on any waivers or reductions in effect. The minimum and maximum percentages shown in the table include Fund Operating Expenses of mutual funds, if any, which may be acquired by the Underlying Funds which operate as Fund of Funds. Refer to such Underlying Fund’s prospectus for details concerning Fund Operating Expenses of mutual fund shares acquired by it, if any. In addition, certain Underlying Funds have reserved the right to impose fees when fund shares are redeemed within a specified period of time of purchase (“Redemption Fees”) not reflected in the table above. As of the date of this prospectus, none have done so. Redemption Fees are discussed in the Market Timing section of this prospectus and further information about Redemption Fees is contained in the prospectus for such Underlying Fund, copies of which accompany this prospectus or may be obtained by calling 1-800-487-1485. |
| • | Invesco V.I. International Growth Fund (Series I Shares): Long-term growth of capital. |
| • | AB VPS Global Thematic Growth Portfolio (Class A): Long-term growth of capital. |
| • | AB VPS Small/Mid Cap Value Portfolio (Class A): Long-term growth of capital. |
| • | American Century VP Balanced Fund (Class I): Long-term capital growth and current income by investing approximately 60% of its assets in equity securities and the remainder in bonds and other fixed-income securities. |
| • | American Funds Global Growth Fund (Class 2): Long-term growth of capital. |
| • | American Funds Global Small Capitalization Fund (Class 2): Long-term capital growth. |
| • | American Funds Growth Fund (Class 2): Growth of capital. |
| • | American Funds Growth-Income Fund (Class 2): Long-term growth of capital and income. |
| • | American Funds International Fund (Class 2): Long-term growth of capital. |
| • | BlackRock Global Allocation V.I. Fund (Class I): High total investment return. |
| • | Delaware VIP® Diversified Income Series (Standard Class): Maximum long-term total return consistent with reasonable risk. |
| • | Delaware VIP® Emerging Markets Series (Standard Class): Long-term capital appreciation. |
| • | Delaware VIP® Limited-Term Diversified Income Series (Standard Class): Maximum total return, consistent with reasonable risk. |
| • | Delaware VIP® REIT Series (Standard Class): Maximum long-term total return, with capital appreciation as a secondary objective. |
| • | Delaware VIP® Small Cap Value Series (Standard Class): Capital appreciation. |
| • | Delaware VIP® Smid Cap Core Series (Standard Class): Long-term capital appreciation. |
| • | Delaware VIP® U. S. Growth Series (Standard Class): Long-term capital appreciation. |
| • | Delaware VIP® Value Series (Standard Class): Long-term capital appreciation. |
| • | DWS Alternative Asset Allocation VIP Portfolio (Class A): Capital appreciation; a fund of funds. |
| • | Fidelity® VIP Contrafund® Portfolio (Service Class): Long-term capital appreciation. |
| • | Fidelity® VIP Growth Portfolio (Service Class): To achieve capital appreciation. |
| • | Fidelity® VIP Mid Cap Portfolio (Service Class): Long-term growth of capital. |
| • | Franklin Income VIP Fund (Class 1): To maximize income while maintaining prospects for capital appreciation. |
| • | Franklin Mutual Shares VIP Fund (Class 1): Capital appreciation; income is a secondary consideration. |
| • | Templeton Global Bond VIP Fund (Class 1): High current income consistent with preservation of capital; capital appreciation is a secondary objective. |
| • | JPMorgan Insurance Trust Global Allocation Portfolio (Class 1): Maximize long-term total return. |
| • | ClearBridge Variable Mid Cap Portfolio (Class I): Long-term growth of capital. |
| • | LVIP Baron Growth Opportunities Fund (Service Class): Capital appreciation. |
| • | LVIP BlackRock Global Growth ETF Allocation Managed Risk Fund (Standard Class): A balance between current income and growth of capital, with a greater emphasis on growth of capital; a fund of funds. |
| • | LVIP BlackRock Global Real Estate Fund (Standard Class): Total return through a combination of current income and long-term capital appreciation. |
| • | LVIP BlackRock Inflation Protected Bond Fund (Standard Class): To maximize real return, consistent with preservation of real capital and prudent investment management. |
| • | LVIP BlackRock U.S. Growth ETF Allocation Managed Risk Fund (Standard Class): A balance between current income and growth of capital, with a greater emphasis on growth of capital; a fund of funds. |
| • | LVIP Delaware Bond Fund (Standard Class)*: Maximum current income (yield) consistent with a prudent investment strategy. |
| • | LVIP Delaware Diversified Floating Rate Fund (Standard Class)*: Total return. |
| • | LVIP Delaware Social Awareness Fund (Standard Class)*: To maximize long-term capital appreciation. |
| • | LVIP Delaware Special Opportunities Fund (Standard Class)*: To maximize long-term capital appreciation. |
| • | LVIP Dimensional International Core Equity Fund (Standard Class): Long-term capital appreciation. |
| • | LVIP Dimensional U.S. Core Equity 1 Fund (Standard Class): Long-term capital appreciation. |
| • | LVIP Dimensional U.S. Core Equity 2 Fund (Standard Class): Long-term capital appreciation. |
| • | LVIP Dimensional/Vanguard Total Bond Fund (Standard Class): Total return consistent with the preservation of capital; a fund of funds. |
| • | LVIP Global Conservative Allocation Managed Risk Fund (Standard Class): A high level of current income with some consideration given to growth of capital; a fund of funds. |
| • | LVIP Global Growth Allocation Managed Risk Fund (Standard Class): A balance between a high level of current income and growth of capital, with a greater emphasis on growth of capital; a fund of funds. |
| • | LVIP Global Income Fund (Standard Class): Current income consistent with the preservation of capital. |
| • | LVIP Global Moderate Allocation Managed Risk Fund (Standard Class): A balance between a high level of current income and growth of capital, with an emphasis on growth of capital; a fund of funds. |
| • | LVIP Government Money Market Fund (Standard Class): Current income while (i) maintaining a stable value of your shares (providing stability of net asset value) and (ii) preserving the value of your
initial investment (preservation of capital). Note: The No-Lapse Enhancement Rider limits the use of this fund. See the Allocation Requirements of the No-Lapse Enhancement Rider in the “Riders” section of this prospectus. |
| • | LVIP JPMorgan High Yield Fund (Standard Class): A high level of current income; capital appreciation is the secondary objective. |
| • | LVIP MFS International Growth Fund (Standard Class): Long-term capital appreciation. |
| • | LVIP MFS Value Fund (Standard Class): Capital appreciation. |
| • | LVIP Mondrian International Value Fund (Standard Class): Long-term capital appreciation as measured by the change in the value of fund shares over a period of three years or longer. |
| • | LVIP SSGA Bond Index Fund (Standard Class): To match as closely as practicable, before fees and expenses, the performance of the Barclays Capital U.S. Aggregate Index. |
| • | LVIP SSGA Conservative Index Allocation Fund (Standard Class): A high level of current income, with some consideration given to growth of capital; a fund of funds. |
| • | LVIP SSGA Conservative Structured Allocation Fund: (Standard Class): A high level of current income, with some consideration given to growth of capital; a fund of funds. |
| • | LVIP SSGA Developed International 150 Fund (Standard Class): To maximize long-term capital appreciation. |
| • | LVIP SSGA Emerging Markets 100 Fund (Standard Class): To maximize long-term capital appreciation. |
| • | LVIP SSGA International Index Fund (Standard Class): To approximate as closely as practicable, before fees and expenses, the performance of a broad market index of non-U.S. foreign securities. |
| • | LVIP SSGA Large Cap 100 Fund (Standard Class): To maximize long-term capital appreciation. |
| • | LVIP SSGA Moderate Index Allocation Fund (Standard Class): A balance between a high level of current income and growth of capital, with a greater emphasis on growth of capital; a fund of funds. |
| • | LVIP SSGA Moderate Structured Allocation Fund (Standard Class): A balance between a high level of current income and growth of capital, with an emphasis on growth of capital; a fund of funds. |
| • | LVIP SSGA Moderately Aggressive Index Allocation Fund (Standard Class): A balance between high level of current income and growth of capital, with a greater emphasis on growth of capital; a fund of funds. |
| • | LVIP SSGA Moderately Aggressive Structured Allocation Fund (Standard Class): A balance between high level of current income and growth of capital, with a greater emphasis on growth of capital; a fund of funds. |
| • | LVIP SSGA S&P 500 Index Fund (Standard Class)(1): To approximate as closely as practicable, before fees and expenses, the total rate of return of common stocks publicly traded in the United States, as represented by the S&P 500 Index. |
| • | LVIP SSGA Small-Cap Index Fund (Standard Class): To approximate as closely as practicable, before fees and expenses, the performance of the Russell 2000® Index, which emphasizes stocks of small U.S. companies. |
| • | LVIP SSGA Small-Mid Cap 200 Fund (Standard Class): To maximize long-term capital appreciation. |
| • | LVIP T. Rowe Price Growth Stock Fund (Standard Class): Long-term capital growth. |
| • | LVIP T. Rowe Price Structured Mid-Cap Growth Fund (Standard Class): To maximize capital appreciation. |
| • | LVIP U.S. Growth Allocation Managed Risk Fund (Standard Class): High level of current income and growth of capital, with an emphasis on growth of capital; a fund of funds. |
| • | LVIP Vanguard Domestic Equity ETF Fund (Standard Class): Long-term capital appreciation; a fund of funds. |
| • | LVIP Vanguard International Equity ETF Fund (Standard Class): Long-term capital appreciation; a fund of funds. |
| • | LVIP Wellington Capital Growth Fund (Standard Class): Capital growth. |
| • | LVIP Wellington Mid-Cap Value Fund (Standard Class): Long-term capital appreciation. |
| • | MFS® Growth Series (Initial Class): Capital appreciation. |
| • | MFS® Total Return Series (Initial Class): Total return. |
| • | MFS® Utilities Series (Initial Class): Total return. |
| • | TOPS® Balanced ETF Portfolio – (Class 2 Shares): Long-term capital growth, income is secondary objective; a fund of funds. |
| • | TOPS® Moderate Growth ETF Portfolio – (Class 2 Shares): Long-term capital growth, income is secondary objective; a fund of funds. |
| • | PIMCO VIT CommodityRealReturn® Strategy Portfolio (Administrative Class): Maximum real return, consistent with prudent investment management. |
| * | Investments in Delaware VIP Series, Delaware Funds, LVIP Delaware Funds or Lincoln Life accounts managed by Macquarie Investment Management Advisers, a series of Macquarie Investments Management Business Trust, are not and will not be deposits with or liabilities of Macquarie Bank Limited ABN 46008 583 542 and its holding companies, including their subsidiaries or related companies, and are subject to investment risk, including possible delays in prepayment and loss of income and capital invested. No Macquarie Group company guarantees or will guarantee the performance of the series or funds or accounts, the repayment of capital from the series or funds or account, or any particular rate of return. |
| (1) | The Index to which this fund is managed is a product of S&P Dow Jones Indices LLC (“SPDJI”) and has been licensed for use by one or more of the portfolio’s service providers (licensee). Standard & Poor’s® and S&P® are registered trademarks of Standard & Poor’s Financial Services LLC (S&P); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (Dow Jones); and these trademarks have been licensed for use by SPDJI and sublicensed for certain purposes by the licensees. S&P®, S&P GSCI® and the Index are trademarks of S&P and have been licensed for use by SPDJI and its affiliates and sublicensed for certain purposes by the licensee. The Index is not owned, endorsed, or approved by or associated with any additional third party. The licensee’s products are not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, their respective affiliates, or their third party licensors, and none of these parties or their respective affiliates or third party licensors make any representation regarding the advisability of investing in such products, nor do they have any liability for any errors, omissions, or interruptions of the Index. |
| • | Change the investment objective of the Separate Account; |
| • | Operate the Separate Account as a management investment company, unit investment trust, or any other form permitted under applicable securities laws; |
| • | Deregister the Separate Account; or |
| • | Combine the Separate Account with another Separate Account. |
| 1) | is the amount of this decrease plus any prior decreases; |
| 2) | is the Initial Specified Amount; and |
| 3) | is the then applicable Surrender Charge from the schedule in the Policy. |
| (A) | is the applicable rate found in the “Guaranteed Cost of Insurance Rate Per $1,000 of Policy Net Amount at Risk or Rider Net Amount At Risk” table of rates shown on the Policy Specifications; and |
| (B) | is either i. or ii. noted below: |
| i. | For any Policy Month prior to acceleration of the death benefit, the Policy’s Net Amount at Risk divided by $1,000; or |
| ii. | Following acceleration of the death benefit, for any Policy Month in which benefits are not payable, the Rider’s Net Amount at Risk divided by $1,000. |
| 1) | initial death benefit amount ; |
| 2) | optional riders; |
| 3) | the amount and frequency of Premium Payments; and |
| 4) | the amount of Net Premium Payment to be allocated to the selected Sub-Accounts or the Fixed Account. |
| 1) | 25% of the Fixed Account Value as of the immediately preceding Policy Anniversary, or |
| 2) | the total dollar amount transferred from the Fixed Account in the immediately preceding Policy Year. |
| 1) | if the value in the money market Sub-Account or the Fixed Account is insufficient to complete the next transfer; |
| 2) | 7 calendar days after our Administrative Office receives a request for termination in writing or by telephone, with adequate authentication; |
| 3) | on the first Policy Anniversary; or |
| 4) | if your Policy is surrendered or otherwise terminates. |
| A. | For Chronic Illness where you have elected to receive benefits in a one-time lump sum and have met all Conditions for Eligibility of Benefit Payments: |
| • | the Policy’s Death Benefit Proceeds, without reduction by an outstanding Debt, (the “Gross Death Benefit Proceeds”). |
| • | If a Premium Reserve Rider is attached to the Policy, the Policy’s Gross Death Benefit Proceeds less the Premium Reserve Rider Accumulation Value. The Premium Reserve Rider Surrender Value will be paid to you prior to the calculation of the Original Benefit Amount. |
| B. | For Chronic Illness where you have elected to receive Monthly Benefit Amounts or where you elect to receive the Terminal Illness benefit and have met all Conditions for Eligibility for Benefit Payments: |
| • | the Gross Death Benefit Proceeds ; or |
| • | If a Premium Reserve Rider is attached to the Policy, you can elect to have the Premium Reserve Rider Surrender Value paid to you prior to the calculation of the Original Benefit Amount. |
| 1. | Our receipt and approval of the following documentation provided by you: |
| a. | For Chronic Illness, Written Certification or Written Re-certification that the Insured is a Chronically Ill individual; or |
| b. | For Terminal Illness, a Terminally Ill Certification that the Insured is Terminally Ill; and |
| c. | A written consent to make such payment from any assignee of record named under the Policy or any irrevocable Beneficiary named under the Policy; and |
| 2. | We complete, at our discretion and expense, a personal interview with, and an assessment of, the Insured, including examination or tests by a “Licensed Health Care Practitioner” of our choice; and our receipt of copies of any relevant medical records from a health care provider involved in the Insured’s care. A Licensed Health Care Practitioner is a physician, as defined in Section 1861(r)(1) of the Social Security Act, a registered professional nurse, licensed social worker, or other individual who meets such requirements as may be prescribed by the Secretary of Treasury, or qualifications to our satisfaction. |
| (1) | For a Chronic Illness Qualifying Event |
| (a) | Monthly Benefit Amounts - Provided all Conditions for Eligibility for Benefit Payments have been satisfied, you may elect to receive accelerated monthly benefit payments (the “Monthly Benefit Amount”) without losing the option of electing a one-time lump sum payment of the Remaining Benefit Amount. |
| (1) | the Insured fails to meet any one of the Conditions for Eligibility for Benefit Payments; |
| (2) | you notify us to discontinue Monthly Benefit Amount payments; or |
| (3) | this rider terminates. |
| (2) | For a Terminal Illness Qualifying Event |
| The maximum Terminal Illness benefit payment will be the lesser of 1) 50% of the Remaining Benefit Amount; or 2) $250,000. Note: This benefit will only be paid once and will be paid as a lump sum, if you elect less than the maximum benefit, the remainder will not be available at a later date. The amount accelerated will be greater than the Terminal Illness benefit payment and will be determined by dividing the requested benefit payment by the applicable Terminal Illness actuarial discount factor discussed below. The amount accelerated will not be allowed to exceed the Remaining Benefit Amount. |
| a) | the current yield on 90 day treasury bills available on the date the benefit payment is determined; or |
| b) | the current Maximum Statutory Adjustable Policy Loan Interest Rate (the highest variable interest rate permitted under state law) in effect on the date the benefit payment is determined. This maximum rate will not be more than the higher of the following: |
| (2) | The rate used to compute the Fixed Account under the Policy for that year plus 1 percent. |
| (a) | Moody's Corporate Bond Yield Average - Monthly Average Corporates as published by Moody's Investors Service, Inc., or any successor thereto; or |
| (b) | In the event that Moody's Corporate Bond Yield Average - Monthly Average Corporates is no longer published, a substantially similar average, established by regulation, or other method, issued by the Insurance Department of the state or other jurisdiction where the Policy is delivered. |
| (a) | Chronic Illness in Monthly Benefit Amounts and then at a later date elect the Chronic Illness one-time lump sum payment; or |
| (b) | Chronic Illness Monthly Benefit Amounts and then at a later date elect to receive the Terminal Illness benefit. In the same Policy Month, you may receive both a Chronic Illness Monthly Benefit Amount and the Terminal Illness benefit; or |
| (c) | Chronic Illness Monthly Benefit Amounts, then at a later date elect to receive the Terminal Illness benefit and finally receive the Chronic Illness one-time lump sum payment; or |
| (d) | Terminal Illness benefit and then at a later date elect to receive a Chronic Illness benefit in either Monthly Benefit Amounts or the one-time lump sum payment, or both. |
| i. | the Chronic Illness Monthly Benefit Amount; or |
| ii. | the Terminal Illness benefit payment divided by the applicable Terminal Illness actuarial discount factor. |
| 1. | Specified Amount; |
| 2. | Fixed Account Value; |
| 3. | The value of each Sub-Account; |
| 4. | Your “Cost Basis” in the Policy (the total amount of Premiums or other consideration you have paid for the Policy, less the total amount you have received that was not included in your taxable income, and less any reductions in values due to benefit payments under this rider); |
| 5. | Premiums paid to date; |
| 6. | No-Lapse Value* of any No-Lapse Enhancement Rider, if attached to the Policy; |
| 7. | Reset Account Value* of any No-Lapse Enhancement Rider, if attached to the Policy; |
| 8. | Guaranteed Minimum Death Benefit* of any No-Lapse Enhancement Rider, if attached to the Policy; and |
| 9. | Reset Death Benefit* of any No-Lapse Enhancement Rider, if attached to the Policy. |
| A. | Chronic Illness Benefit Payments: |
| B. | Terminal Illness Benefit Payment: |
| 1. | Intentionally self-inflicted injury or attempted suicide, while sane or insane; |
| 2. | Any act or incident of insurrection or war, declared or undeclared; |
| 3. | The Insured’s participation in, or attempting to participate in, a felony, riot, or insurrection; or |
| 4. | Alcoholism or drug addiction. |
| 1. | The date you request In writing to terminate this rider; |
| 2. | The Policy’s Specified Amount exceeds the Specified Amount Limit as shown on the Policy Specifications; |
| 3. | The receipt of a Chronic Illness one-time lump sum payment which will cause the termination of both this rider and the Policy to which it is attached; |
| 4. | The Remaining Benefit Amount is reduced to zero which will cause the termination of both this rider and the Policy to which it is attached; |
| 5. | Termination of the Policy; or |
| 6. | The death of the Insured which will cause Death Benefit Proceeds to become payable under the Policy. |
| 1. | The date you take a Partial Surrender under the Policy; or |
| 2. | The date you take a loan under the Policy. |
| A. | For a Chronic Illness Qualifying Event |
| 1. | $50,000; |
| 2. | 5% of the Original Benefit Amount multiplied by the applicable actuarial discount factor; or |
| 3. | the balance of the Remaining Benefit Amount multiplied by the applicable Chronic Illness actuarial discount factor. |
| 1. | an amount equal to the annual equivalent of the Per Diem Limit (Per Diem Limit is established annually by the Internal Revenue Service); |
| 2. | 25% of the Original Benefit Amount multiplied by the applicable actuarial discount factor; or |
| 3. | the balance of the Remaining Benefit Amount multiplied by the applicable Chronic Illness actuarial discount factor. |
| B. | For a Terminal Illness Qualifying Event |
| 1. | 50% of the Remaining Benefit Amount; or |
| 2. | $250,000 |
| 1. | Our receipt and approval of the following documentation provided by you: |
| a. | Certification of either: |
| i. | For Chronic Illness, Written Certification by a Licensed Health Care Practitioner, independent of us, that the Insured is a Chronically Ill individual; or |
| ii. | For Terminal Illness, Terminally Ill Certification by a Physician that the Insured is Terminally Ill. |
| b. | A written consent to make such payment from any assignee of record named under the Policy or any Irrevocable Beneficiary named under the Policy. |
| 2. | We complete, at our discretion and expense, a personal interview with, and an assessment of, the Insured, including examination or tests by a Licensed Health Care Practitioner or Physician of our choice for the Chronic Illness Qualifying Event or for the Terminal Illness Qualifying Event; and our receipt of copies of any relevant medical records from any health care provider involved in the Insured’s care. A Licensed Health |
| Care Practitioner is a Physician, as defined in Section 1861(r)(1) of the Social Security Act, a registered professional nurse, licensed social worker, or other individual who meets such requirements as may be prescribed by the Secretary of Treasury, or qualifications to our satisfaction. If there is a difference in opinion between the Insured's Licensed Health Care Practitioner/Physician and our Licensed Health Care Practitioner/Physician, we will require that a third opinion be obtained from a Licensed Health Care Practitioner/Physician acceptable to us and you. This opinion will be at our expense and will be mutually binding; and | |
| 3. | The Insured is living at the time all of the above requirements are met. |
| 1. | A Chronic Illness benefit and then at a later date request to receive the Terminal Illness benefit. In the same Policy Month, you may receive both a Chronic Illness benefit and the Terminal Illness benefit; or |
| 2. | The Terminal Illness benefit and then at a later date request to receive a Chronic Illness benefit. |
| 1. | the current yield on 90 day treasury bills available on the date the benefit payment is determined; or |
| 2. | the current Maximum Statutory Adjustable Policy Loan Interest Rate (as determined by Moody’s Corporate Bond Yield Average or similar method) in effect on the date the benefit payment is determined. |
| 1. | this Rider is In Force; |
| 2. | you Request a Chronic Illness benefit payment after the current Benefit Period has ended; and |
| 3. | we receive and approve all documentation necessary to satisfy all Conditions for Eligibility for Benefit Payments. |
| A. | is Debt; |
| B. | is the current Specified Amount immediately prior to a benefit payment; and |
| C. | is either i. or ii. noted below depending on the Qualifying Event: |
| i. | the Chronic Illness benefit payment divided by the applicable Chronic Illness actuarial discount factor; or |
| ii. | the Terminal Illness benefit payment divided by the applicable Terminal Illness actuarial discount factor. |
| 1. | Specified Amount; |
| 2. | The Fixed Account Value and/or the value of the Sub-Account(s) will be reduced in the same proportion as the balances are invested in such account(s). |
| 3. | If any No-Lapse Enhancement Rider is attached to the Policy, the following will be reduced: |
| a. | The No-Lapse Value; |
| b. | The Reset Account Value; |
| c. | Guaranteed Minimum Death Benefit; and |
| d. | The Reset Death Benefit. |
| A. | is the Chronic Illness benefit payment divided by the applicable Chronic Illness actuarial discount factor, and |
| B. | is the current Specified Amount immediately prior to a benefit payment. |
| A. | is the Terminal Illness benefit payment divided by the applicable Terminal Illness actuarial discount factor, and |
| B. | is the current Specified Amount immediately prior to the benefit payment. |
| a. | The Policy terminates or is surrendered for its Surrender Value; |
| b. | the date we receive your request to terminate this rider; |
| c. | If any No-Lapse Enhancement Rider is attached to the Policy, any increase of the Policy’s Specified Amount will cause this rider to terminate; |
| d. | The Remaining Benefit Amount is reduced to zero; |
| e. | The Policy’s Specified Amount and the Remaining Benefit Amount are reduced to zero, which will cause the termination of both this Rider and the Policy; |
| f. | The death of the Insured which will cause the Death Benefit Proceeds to become payable under the Policy. |
| a. | a one-time 90-day Elimination Period is satisfied; |
| b. | written certification within the preceding 12-month period from a Licensed Health Care Practitioner that the Insured is Chronically Ill; |
| c. | a Plan of Care (a written document which outlines individualized medical treatment; please see your Policy and rider for additional information) prescribed by a Licensed Health Care Practitioner for Covered Services is received at least every 12 months; and |
| d. | All claim forms and written notifications are submitted and satisfactory. |
| a. | the sum of costs incurred and actually paid by the Insured for Covered Services for your Policy Month which have not already been reimbursed by us; |
| b. | the amount you request; |
| c. | the Maximum Monthly LTC Benefit Amount; or |
| d. | the Remaining LTC Specified Amount. |
| • | Adult day care services |
| • | Assisted living facility services |
| • | Bed reservation |
| • | Care planning services |
| • | Caregiver training |
| • | Home health care services |
| • | Hospice services |
| • | Nursing home care services |
| • | Respite care services |
| • | Alternative care services |
| • | Non-continual services |
| a. | treatment or care due to alcoholism or drug addiction; |
| b. | treatment for attempted suicide or an intentionally self-inflicted injury; |
| c. | treatment provided in a Veteran’s Administration or government facility; |
| d. | loss to the extent that benefits are payable from governmental programs or other insurance programs; |
| e. | confinement or care received outside the United States other than benefits for nursing home care services and assisted living facility services; |
| f. | services provided by a facility or an agency that does not meet this rider’s definition for such facility or agency as described in the “Covered Services” section of this rider; and |
| g. | services provided by the Insured’s or Owner’s immediate family member; and |
| h. | services for which no charge is or would normally be made in the absence of insurance. |
| 1. | In lieu of adding any charges for the Lincoln Care CoverageSM Accelerated Benefits Rider to the No-Lapse Value Cost of Insurance calculation, the No-Lapse Value Monthly LTC Rider Charge and No-Lapse Value Monthly Administrative LTC Rider Fee (please see your Policy and rider for additional information) become part of the No-Lapse Value Monthly Deduction described in the No-Lapse Enhancement Rider. |
| 2. | The No-Lapse Value LTC Rider Cost of Insurance Rates shown on your Policy Specifications will not change. |
| 3. | The No-Lapse Value Monthly Administrative LTC Rider Fee as of your Policy Date and duration are shown on your Policy Specifications and will not increase. |
| 1. | In lieu of adding any charges for the Lincoln Care CoverageSM Accelerated Benefits Rider to the Reset Account Value Cost of Insurance calculation, the Reset Account Value Monthly LTC Rider Charge and Reset Account Value Monthly Administrative LTC Rider Fee (please see your Policy and rider for additional information) become part of the Reset Account Value Monthly Deduction described in the No-Lapse Enhancement Rider. |
| 2. | The Reset Account Value LTC Rider Cost of Insurance Rates shown on your Policy Specifications will not change. |
| 3. | The Reset Account Value Monthly Administrative LTC Rider Fee as of your Policy Date and duration are shown on your Policy Specifications and will not increase. |
| 1. | is the balance in the Loan Account; |
| 2. | is any accrued loan interest not yet charged; |
| 3. | is your Policy’s Specified Amount immediately prior to the benefit payment; and |
| 4. | is the amount of the benefit payment prior to the reduction to repay Debt. |
| 1. | Specified Amount; |
| 2. | The Fixed Account Value and/or Sub-Account(s) will be reduced in the same proportion as the balances are invested in such account(s). |
| 3. | If any No-Lapse Enhancement Rider is attached to your Policy, the following will be reduced: |
| a. | the No-Lapse Value; |
| b. | the Reset Account Value; |
| c. | the Guaranteed Minimum Death Benefit; and |
| d. | the Reset Death Benefit. |
| (1) | is your Policy’s Specified Amount immediately prior to the benefit payment; and |
| (2) | is the amount of the benefit payment. |
| 1. | the date we receive your request to return it under this rider’s right to examine provision; |
| 2. | the Valuation Day on or next following the date we receive your request to terminate your Policy; |
| 3. | the Monthly Anniversary Day on or next following the date we receive your election of the Overloan Protection Feature under the Overloan Protection Rider, if attached; |
| 4. | the Monthly Anniversary Day on or next following the date you receive a benefit under any other Acceleration of Benefits Rider attached to your Policy; |
| 5. | the date the Remaining LTC Specified Amount is reduced to zero; |
| 6. | the date your Policy’s Specified Amount and the Remaining LTC Specified Amount are both reduced to zero, which will cause the termination of both this rider and your Policy; or |
| 7. | the date the Insured dies, which will cause the Death Benefit Proceeds to become payable under your Policy. |
| 1) | the Policy's Accumulation Value; minus |
| 2) | Debt. |
| • | Insured: Male Standard Non-tobacco, age 45 |
| • | Specified Amount: $1,000,000 |
| • | Planned annual Premium Payment: $35,000 |
| • | No Debt |
| • | Assumed Investment Return: 8% gross (7.44% net)* |
End of Year | Accumulation Value Without ESV Rider | Surrender Value Without ESV Rider | Accumulation Value With ESV Rider | Surrender Value With ESV Rider | ||||
| 1 | $29,230 | $0 | $29,230 | $29,230 | ||||
| 2 | $60,181 | $26,611 | $59,404 | $59,404 | ||||
| 3 | $92,968 | $60,118 | $91,363 | $91,363 | ||||
| 4 | $127,787 | $65,667 | $125,297 | $125,297 | ||||
| 5 | $164,814 | $133,464 | $161,390 | $161,390 |
| * | The Assumed Investment Return shown is illustrative only. Your investment return may be higher or lower than the rate used to create this table. The table is intended to illustrate the effect(s) of the application of the ESV Rider on policy values and is not intended to imply that a purchaser can expect to achieve the values shown. |
| a. | Changes in premium timing, frequency or amount, including; |
| b. | You initiate policy changes such as loans, partial surrenders, increases or decreases in Specified Amount, the addition or removal of Riders, or exercising rider benefits. |
| a. | the Reset Death Benefit described below, less any Debt and Partial Surrenders (i.e. withdrawals) plus any Death Benefit Proceeds payable under any rider(s), if applicable, or |
| b. | an amount equal to the Reset Account Value multiplied by the applicable percentage shown in the Corridor |
| Percentages Table in the Policy Specifications, less any Debt and Partial Surrenders (i.e. withdrawals) plus any Death Benefit Proceeds payable under any rider(s), if applicable. |
| a. | Monthly Deductions will continue to be accumulated, but will not be deducted. The Surrender Value will not be less than zero. Cost of Insurance rates will not be charged on an amount greater than the death benefit at the beginning of the Policy Month. Any Death Benefit Proceeds payable will not be reduced by the accumulated unpaid Monthly Deductions. |
| b. | Loan interest will continue to accrue and will be added to the total amount of Debt. |
| 1. | The No-Lapse Value on the preceding Monthly Anniversary Day; |
| 2. | Premiums received since the preceding Monthly Anniversary Day (either adding the amount of the No-Lapse Value Premium Credit or subtracting the amount of the No-Lapse Value Premium Load based on Policy Years as shown in the Policy Specifications); |
| 3. | Partial Surrenders (i.e. withdrawals) since the preceding Monthly Anniversary Day; |
| 4. | Accumulated No-Lapse Value Credited Interest calculated using the interest rates shown in the table of No-Lapse Value Credited Interest rates shown in the Policy Specifications; |
| 5. | The No-Lapse Value Monthly Deduction described below for the Policy Month following the Monthly Anniversary Day; and |
| 6. | The Surrender Charge, if any, as determined from the Table of Surrender Charges shown in the Policy Specifications for any decrease in Specified Amount on the Monthly Anniversary Day. |
| 1. | The No-Lapse Death Benefit Value, described below, at the beginning of the Policy Month; |
| 2. | The Net Amount at Risk Discount Factor shown in the Policy Specifications; |
| 3. | The No-Lapse Value at the beginning of the Policy Month after the deduction of the No-Lapse Monthly Policy Fee and either after the deduction of the No-Lapse Monthly Administrative Fee or the application of the No-Lapse Monthly Administrative Credit, but prior to the deduction for the monthly No-Lapse Cost of Insurance; and |
| 4. | The applicable No-Lapse Factor described in the Policy Specifications. The No-Lapse Factor may be modified by the Table of Funding Level Threshold Percentages and resulting reduction factor, if applicable, as described in the Policy Specifications. |
| 1. | the Reset Account Value on the preceding Monthly Anniversary Day; |
| 2. | Premiums received since the preceding Monthly Anniversary Day, subtracting the amount of the Reset Account Value Premium Load; |
| 3. | Partial Surrenders (i.e. withdrawals) since the preceding Monthly Anniversary Day; |
| 4. | Accumulated Reset Account Value Credited Interest calculated using the Reset Account Value Credited Interest rate shown in the Policy Specifications; |
| 5. | The Reset Account Value Monthly Deduction described below for the Policy Month following the Monthly Anniversary Day; and |
| 6. | the Surrender Charge, if any, as determined from the Table of Surrender Charges shown in the Policy Specifications for any decrease in Specified Amount on the Monthly Anniversary Day. |
| 1. | The Reset Account Death Benefit Value at the beginning of the Policy Month; |
| 2. | The Net Amount at Risk Discount Factor shown in the Policy Specifications; |
| 3. | The Reset Account Value at the beginning of the Policy Month after the deduction of the Reset Account Monthly Administrative Fee but prior to the deduction for the monthly Reset Account Value Cost of Insurance; and |
| 4. | The Reset Account Factor as described in the Policy Specifications. |
| 1. | the Insured reaches age 121; |
| 2. | the surrender or other termination of the Policy; |
| 3. | you request to terminate Automatic Rebalancing; |
| 4. | you use the money market Sub-Account other than as described in the Allocation Requirement above; or |
| 5. | An allocation restriction, described in the Allocation Requirements section above is imposed and you do not take corrective action within 61 days after the date of mailing of the notice of the imposition of such restriction. |
| (1) | Policy Debt is larger than the Specified Amount; and |
| (2) | The Policy has been in force for a minimum number of Policy Years (“Minimum Policy Years in Force”) as shown in the Policy Specifications; and |
| (3) | Any Insured identified in the Policy Specifications has attained the age shown as “Minimum Attained Age” in the Policy Specifications; and |
| (4) | The Policy’s Accumulation Value less Debt must be enough to cover the charge as shown in the Policy Specifications; and |
| (5) | The ratio of Debt to the Policy’s Accumulation Value must be between the Minimum and Maximum Value Threshold Percentages shown in the Policy Specifications; and |
| (6) | Both the guideline single premium and the guideline level premiums calculated under the Guideline Premium Test must be greater than zero (see the “Death Benefit Qualification Test” section of this prospectus) (unless the youngest Insured has attained or would have attained at least age 100) |
| 1) | the Surrender Value under your Policy is insufficient to maintain your Policy in force and the No-Lapse Enhancement Rider described above is not at the time preventing your Policy from lapsing; and |
| 2) | you do not pay at least the amount set forth in the Lapse Notice and your payment is not received by us before the end of the Grace Period. |
| 1) | we will no longer accept Premium Payments; |
| 2) | we will make no further deductions; |
| 3) | policy values held in the Separate Account will be transferred to the Fixed Account; |
| 4) | we will continue to credit interest to the Fixed Account; |
| 5) | we will no longer transfer amounts to the Sub-Accounts; and |
| 6) | we will no longer allow any changes to the Specified Amount. |
| 1) | Full Surrender of the Policy; |
| 2) | death of the Insured; or |
| 3) | failure to pay the necessary amount of Premium to keep your Policy in force. |
| 1) | the total value of Underlying Fund shares held in the Sub-Account is calculated by multiplying the number of Underlying Fund shares owned by the Sub-Account at the beginning of the Valuation Period by the net asset value per share of the Underlying Fund at the end of the Valuation Period, and adding any dividend or other distribution of the Underlying Fund made during the Valuation Period; minus |
| 2) | the liabilities of the Sub-Account at the end of the Valuation Period. Such liabilities include daily charges imposed on the Sub-Account, if any, and may include a charge or credit with respect to any taxes paid or reserved for by Lincoln Life that we determine result from the operations of the Separate Account; and |
| 3) | the result of (1) minus (2) is divided by the number of Variable Accumulation Units for that Sub-Account outstanding at the beginning of the Valuation Period. |
| 1) | the Specified Amount on the date of the death of the Insured, less any Debt; or |
| 2) | an amount equal to the Accumulation Value on the date of death multiplied by the applicable percentage shown in the Corridor Percentages Table in the Policy Specifications, less any Debt. (Please note that the investment performance of the Sub-Accounts you have chosen will impact the Accumulation Value and therefore may affect the amount of Death Benefit Proceeds payable.) |
| (1) | The Guideline Premium Test expressly limits the amount of Premium that you can pay into your Policy while the Cash Value Accumulation Test does not. |
| (2) | The factors that determine the minimum death benefit relative to the Policy’s Accumulation Value are different and required increases in the minimum death benefit due to growth in Accumulation Value will generally be greater under the Cash Value Accumulation Test. |
| (3) | If you wish to pay more Premium than is permitted under the Guideline Premium Test, for example to target a funding objective, you should consider the Cash Value Accumulation Test, because it generally permits the payment of higher amounts of Premium. Please note that payment of higher Premiums could also cause your Policy to be deemed a MEC (see Tax Issues, sub-section Policies That Are MEC's in your prospectus). |
| (4) | If your primary objective is to maximize the potential for growth in Accumulation Value, or to conserve Accumulation Value, generally the Guideline Premium Test will better serve this objective. |
| (5) | While application of either test may require an increase in death benefit, any increase in the Cost of Insurance Charges that arises as a result of the increase in the Policy’s Net Amount at Risk will generally be less under the Guideline Premium Test than under the Cash Value Accumulation Test. This is because the required adjustment to the death benefit under the Guideline Premium Test is lower than that which would result under the Cash Value Accumulation Test. |
b. an amount equal to the amount of the Partial Surrender minus the result of [(1) minus (2)] divided by (3) where:
(2) is the Specified Amount immediately prior to the Partial Surrender; and
(3) is the applicable percentage shown in the Corridor Percentages Table in the Policy Specifications.
| 1) | the Surrender Value of the Policy is insufficient to pay the Monthly Deduction, and |
| 2) | the provisions of the No-Lapse Enhancement Rider are not preventing termination of the Policy, then all coverage will terminate. This is referred to as “Policy Lapse”. |
| 1) | because it has been exhausted by earlier deductions; |
| 2) | as a result of poor investment performance; |
| 3) | due to Partial Surrenders; |
| 4) | due to Debt for Policy Loans; or |
| 5) | because of a combination of any of these factors. |
| 1) | it has not been surrendered; |
| 2) | there is an application for reinstatement in writing; |
| 3) | satisfactory evidence of insurability is furnished to us and we agree to accept the risk for the Insured; |
| 4) | we receive a payment sufficient to keep your Policy in force for at least two months; and |
| 5) | any accrued loan interest is paid and any remaining Debt is either paid or reinstated. |
1933 Act Registration No. 333-229198
1940 Act Registration No. 811-08557
100 N. Greene Street
Greensboro, NC 27401
| • | an annual reduction for fund management fees and expenses, and |
| • | a policy level mortality and expense charge applied on a daily equivalent basis, but |
| • | no deductions for additional policy expenses (i.e., Premium Loads, Administrative Fees, and Cost of Insurance Charges), which, if included, would have resulted in lower performance. |
| a) | calculating the change in unit value for the base period (the 7-day period ended December 31, of the previous year); then |
| b) | dividing this figure by the unit value at the beginning of the period; then |
| c) | annualizing this result by the factor of 365/7. |
| Where: | P = a hypothetical initial purchase payment of $1,000 |
| T = average annual total return for the period in question | |
| n = number of years | |
| ERV = ending redeemable value (as of the end of the period in question) of a hypothetical $1,000 purchase payment made at the beginning of the 1-year, 3-year, 5-year, or 10-year period in question (or fractional period thereof) |
| (1) | all recurring fees have been charged to the Owner’s accounts; and |
| (2) | there will be a complete redemption upon the anniversary of the 1-year, 3-year, 5-year, or 10-year period in question. |
The Lincoln National Life Insurance Company
Consolidated Financial Statements
December 31, 2018 and 2017
Report of Independent Registered Public Accounting Firm
To the Stockholder and the Board of Directors of
The Lincoln National Life Insurance Company
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of The Lincoln National Life Insurance Company (the Company) as of December 31, 2018 and 2017, the related consolidated statements of comprehensive income (loss), stockholder’s equity and cash flows for each of the three years in the period ended December 31, 2018, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2018 and 2017, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2018, in conformity with U.S. generally accepted accounting principles.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/ Ernst & Young LLP
We have served as the Company’s auditor since 1966.
Philadelphia, Pennsylvania
March 13, 2019
1
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
CONSOLIDATED BALANCE SHEETS
(in millions, except share data)
|
As of December 31, |
||||||||
|
|
2018 |
2017 |
||||||
|
ASSETS |
||||||||
|
Investments: |
||||||||
|
Available-for-sale securities, at fair value: |
||||||||
|
Fixed maturity securities (amortized cost: 2018 – $91,219; 2017 – $85,802) |
$ |
92,787 |
$ |
93,340 | ||||
|
Equity securities (cost: 2017 – $247) |
- |
246 | ||||||
|
Trading securities |
1,869 | 1,533 | ||||||
|
Equity securities |
99 |
- |
||||||
|
Mortgage loans on real estate |
13,190 | 10,662 | ||||||
|
Real estate |
11 | 11 | ||||||
|
Policy loans |
2,491 | 2,379 | ||||||
|
Derivative investments |
1,081 | 845 | ||||||
|
Other investments |
1,951 | 2,006 | ||||||
|
Total investments |
113,479 | 111,022 | ||||||
|
Cash and invested cash |
1,848 | 947 | ||||||
|
Deferred acquisition costs and value of business acquired |
10,308 | 8,408 | ||||||
|
Premiums and fees receivable |
568 | 394 | ||||||
|
Accrued investment income |
1,087 | 1,052 | ||||||
|
Reinsurance recoverables |
19,826 | 6,515 | ||||||
|
Reinsurance related embedded derivatives |
188 |
- |
||||||
|
Funds withheld reinsurance assets |
563 | 598 | ||||||
|
Goodwill |
1,782 | 1,368 | ||||||
|
Other assets |
16,663 | 7,349 | ||||||
|
Separate account assets |
132,833 | 144,219 | ||||||
|
Total assets |
$ |
299,145 |
$ |
281,872 | ||||
|
|
||||||||
|
LIABILITIES AND STOCKHOLDER’S EQUITY |
||||||||
|
Liabilities |
||||||||
|
Future contract benefits |
$ |
33,884 |
$ |
22,063 | ||||
|
Other contract holder funds |
90,573 | 79,481 | ||||||
|
Short-term debt |
288 | 10 | ||||||
|
Long-term debt |
2,401 | 2,374 | ||||||
|
Reinsurance related embedded derivatives |
- |
51 | ||||||
|
Funds withheld reinsurance liabilities |
4,860 | 4,348 | ||||||
|
Payables for collateral on investments |
4,786 | 4,354 | ||||||
|
Other liabilities |
13,201 | 6,527 | ||||||
|
Separate account liabilities |
132,833 | 144,219 | ||||||
|
Total liabilities |
282,826 | 263,427 | ||||||
|
|
||||||||
|
Contingencies and Commitments (See Note 14) |
||||||||
|
|
||||||||
|
Stockholder’s Equity |
||||||||
|
Common stock – 10,000,000 shares authorized, issued and outstanding |
11,237 | 10,713 | ||||||
|
Retained earnings |
4,423 | 4,405 | ||||||
|
Accumulated other comprehensive income (loss) |
659 | 3,327 | ||||||
|
Total stockholder’s equity |
16,319 | 18,445 | ||||||
|
Total liabilities and stockholder’s equity |
$ |
299,145 |
$ |
281,872 | ||||
See accompanying Notes to Consolidated Financial Statements
2
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(in millions)
|
|
|||||||||
|
|
For the Years Ended December 31, |
||||||||
|
2018 |
2017 |
2016 |
|||||||
|
Revenues |
|||||||||
|
Insurance premiums |
$ |
4,362 |
$ |
3,018 |
$ |
2,579 | |||
|
Fee income |
5,733 | 5,369 | 5,171 | ||||||
|
Net investment income |
4,844 | 4,760 | 4,631 | ||||||
|
Realized gain (loss): |
|||||||||
|
Total other-than-temporary impairment losses on securities |
(7 |
) |
(18 |
) |
(141 |
) |
|||
|
Portion of loss recognized in other comprehensive income |
- |
- |
41 | ||||||
|
Net other-than-temporary impairment losses on securities recognized in earnings |
(7 |
) |
(18 |
) |
(100 |
) |
|||
|
Realized gain (loss), excluding other-than-temporary impairment losses on securities |
(85 |
) |
(438 |
) |
(410 |
) |
|||
|
Total realized gain (loss) |
(92 |
) |
(456 |
) |
(510 |
) |
|||
|
Amortization of deferred gain on business sold through reinsurance |
4 | 18 | 69 | ||||||
|
Other revenues |
507 | 439 | 403 | ||||||
|
Total revenues |
15,358 | 13,148 | 12,343 | ||||||
|
Expenses |
|||||||||
|
Interest credited |
2,589 | 2,558 | 2,527 | ||||||
|
Benefits |
6,144 | 4,818 | 4,247 | ||||||
|
Commissions and other expenses |
4,583 | 3,967 | 4,005 | ||||||
|
Interest and debt expense |
136 | 126 | 116 | ||||||
|
Strategic digitization expense |
76 | 43 | 8 | ||||||
|
Impairment of intangibles |
- |
905 |
- |
||||||
|
Total expenses |
13,528 | 12,417 | 10,903 | ||||||
|
Income (loss) before taxes |
1,830 | 731 | 1,440 | ||||||
|
Federal income tax expense (benefit) |
257 | (1,287 |
) |
267 | |||||
|
Net income (loss) |
1,573 | 2,018 | 1,173 | ||||||
|
Other comprehensive income (loss), net of tax: |
|||||||||
|
Unrealized investment gains (losses) |
(3,314 |
) |
1,547 | 692 | |||||
|
Funded status of employee benefit plans |
2 | (2 |
) |
(1 |
) |
||||
|
Total other comprehensive income (loss), net of tax |
(3,312 |
) |
1,545 | 691 | |||||
|
Comprehensive income (loss) |
$ |
(1,739 |
) |
$ |
3,563 |
$ |
1,864 | ||
|
|
|||||||||
See accompanying Notes to Consolidated Financial Statements
3
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
CONSOLIDATED STATEMENTS OF STOCKHOLDER’S EQUITY
(in millions)
|
|
|||||||||
|
|
For the Years Ended December 31, |
||||||||
|
|
2018 |
2017 |
2016 |
||||||
|
Common Stock |
|||||||||
|
Balance as of beginning-of-year |
$ |
10,713 |
$ |
10,696 |
$ |
10,677 | |||
|
Capital contributions from Lincoln National Corporation |
500 |
- |
- |
||||||
|
Stock compensation/issued for benefit plans |
24 | 17 | 19 | ||||||
|
Balance as of end-of-year |
11,237 | 10,713 | 10,696 | ||||||
|
|
|||||||||
|
Retained Earnings |
|||||||||
|
Balance as of beginning-of-year |
4,405 | 3,342 | 3,118 | ||||||
|
Cumulative effect from adoption of new accounting standards |
(644 |
) |
- |
- |
|||||
|
Net income (loss) |
1,573 | 2,018 | 1,173 | ||||||
|
Dividends declared |
(911 |
) |
(955 |
) |
(949 |
) |
|||
|
Balance as of end-of-year |
4,423 | 4,405 | 3,342 | ||||||
|
|
|||||||||
|
Accumulated Other Comprehensive Income (Loss) |
|||||||||
|
Balance as of beginning-of-year |
3,327 | 1,782 | 1,091 | ||||||
|
Cumulative effect from adoption of new accounting standards |
644 |
- |
- |
||||||
|
Other comprehensive income (loss), net of tax |
(3,312 |
) |
1,545 | 691 | |||||
|
Balance as of end-of-year |
659 | 3,327 | 1,782 | ||||||
|
Total stockholder’s equity as of end-of-year |
$ |
16,319 |
$ |
18,445 |
$ |
15,820 | |||
See accompanying Notes to Consolidated Financial Statements
4
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
|
|
For the Years Ended December 31, |
||||||||
|
|
2018 |
2017 |
2016 |
||||||
|
Cash Flows from Operating Activities |
|||||||||
|
Net income (loss) |
$ |
1,573 |
$ |
2,018 |
$ |
1,173 | |||
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |
|||||||||
|
Deferred acquisition costs, value of business acquired, deferred sales inducements |
|||||||||
|
and deferred front-end loads deferrals and interest, net of amortization |
(108 |
) |
(17 |
) |
55 | ||||
|
Trading securities purchases, sales and maturities, net |
(120 |
) |
120 | 165 | |||||
|
Change in premiums and fees receivable |
(87 |
) |
34 | (49 |
) |
||||
|
Change in accrued investment income |
(6 |
) |
19 | 8 | |||||
|
Change in future contract benefits and other contract holder funds |
1,105 | (2,062 |
) |
(2,036 |
) |
||||
|
Change in reinsurance related assets and liabilities |
(1,233 |
) |
1,001 | 542 | |||||
|
Change in accrued expenses |
(99 |
) |
86 | 26 | |||||
|
Change in federal income tax accruals |
65 | (1,502 |
) |
146 | |||||
|
Realized (gain) loss |
92 | 456 | 511 | ||||||
|
Amortization of deferred (gain) loss on business sold through reinsurance |
(4 |
) |
(18 |
) |
(69 |
) |
|||
|
Change in cash management agreement |
329 | (277 |
) |
(66 |
) |
||||
|
Impairment of intangibles |
- |
905 |
- |
||||||
|
Other |
88 | 91 | 236 | ||||||
|
Net cash provided by (used in) operating activities |
1,595 | 854 | 642 | ||||||
|
|
|||||||||
|
Cash Flows from Investing Activities |
|||||||||
|
Purchases of available-for-sale securities and equity securities |
(12,406 |
) |
(9,887 |
) |
(10,791 |
) |
|||
|
Sales of available-for-sale securities and equity securities |
3,191 | 1,773 | 3,076 | ||||||
|
Maturities of available-for-sale securities |
6,348 | 5,790 | 5,290 | ||||||
|
Purchase of common stock in acquisition, net of cash acquired |
(1,410 |
) |
- |
- |
|||||
|
Sale of business, net |
(12 |
) |
- |
- |
|||||
|
Purchases of alternative investments |
(314 |
) |
(357 |
) |
(302 |
) |
|||
|
Sales and repayments of alternative investments |
178 | 184 | 238 | ||||||
|
Proceeds from affiliate transfer of alternative investments |
- |
66 |
- |
||||||
|
Issuance of mortgage loans on real estate |
(2,920 |
) |
(2,047 |
) |
(2,127 |
) |
|||
|
Repayment and maturities of mortgage loans on real estate |
1,048 | 1,145 | 877 | ||||||
|
Issuance and repayment of policy loans, net |
20 | 49 | 91 | ||||||
|
Net change in collateral on investments, derivatives and related settlements |
654 | (374 |
) |
435 | |||||
|
Other |
(191 |
) |
(123 |
) |
(99 |
) |
|||
|
Net cash provided by (used in) investing activities |
(5,814 |
) |
(3,781 |
) |
(3,312 |
) |
|||
|
|
|||||||||
|
Cash Flows from Financing Activities |
|||||||||
|
Capital contributions from Lincoln National Corporation |
500 |
- |
- |
||||||
|
Payment of long-term debt, including current maturities |
(13 |
) |
(290 |
) |
(250 |
) |
|||
|
Issuance of long-term debt, net of issuance costs |
13 | 75 |
- |
||||||
|
Issuance (payment) of short-term debt |
278 | (270 |
) |
190 | |||||
|
Proceeds from sales leaseback transaction |
88 | 62 | 85 | ||||||
|
Deposits of fixed account values, including the fixed portion of variable |
13,616 | 10,775 | 10,030 | ||||||
|
Withdrawals of fixed account values, including the fixed portion of variable |
(5,957 |
) |
(5,764 |
) |
(5,449 |
) |
|||
|
Transfers to and from separate accounts, net |
(2,469 |
) |
(1,787 |
) |
(1,308 |
) |
|||
|
Common stock issued for benefit plans |
(25 |
) |
(29 |
) |
(22 |
) |
|||
|
Dividends paid |
(911 |
) |
(955 |
) |
(949 |
) |
|||
|
Net cash provided by (used in) financing activities |
5,120 | 1,817 | 2,327 | ||||||
|
|
|||||||||
|
Net increase (decrease) in cash, invested cash and restricted cash |
901 | (1,110 |
) |
(343 |
) |
||||
|
Cash, invested cash and restricted cash as of beginning-of-year |
947 | 2,057 | 2,400 | ||||||
|
Cash, invested cash and restricted cash as of end-of-year |
$ |
1,848 |
$ |
947 |
$ |
2,057 | |||
See accompanying Notes to Consolidated Financial Statements
5
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Nature of Operations, Basis of Presentation and Summary of Significant Accounting Policies
Nature of Operations
The Lincoln National Life Insurance Company (“LNL” or the “Company,” which also may be referred to as “we,” “our” or “us”), a wholly-owned subsidiary of Lincoln National Corporation (“LNC” or the “Parent Company”), is domiciled in the state of Indiana. We own 100% of the outstanding common stock of two insurance company subsidiaries, Lincoln Life & Annuity Company of New York (“LLANY”) and Liberty Life Assurance Company of Boston (“Liberty Life” or “LLACB”). We also own several non-insurance companies, including Lincoln Financial Distributors, our wholesale distributor, and Lincoln Financial Advisors Corporation, part of LNC’s retail distributor, Lincoln Financial Network. LNL’s principal businesses consist of underwriting annuities, deposit-type contracts and life insurance through multiple distribution channels. LNL is licensed and sells its products throughout the U.S. and several U.S. territories. See Note 21 for additional information.
Basis of Presentation
The accompanying consolidated financial statements are prepared in accordance with United States of America generally accepted accounting principles (“GAAP”). Certain GAAP policies, which significantly affect the determination of financial condition, results of operations and cash flows, are summarized below.
Summary of Significant Accounting Policies
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of LNL and all other entities in which we have a controlling financial interest and any variable interest entities (“VIEs”) in which we are the primary beneficiary. As discussed in Note 3, on May 1, 2018, LNC and LNL completed the acquisition of LLACB. We use the equity method of accounting to recognize all of our investments in limited liability partnerships. All material inter-company accounts and transactions have been eliminated in consolidation.
Our involvement with VIEs is primarily to invest in assets that allow us to gain exposure to a broadly diversified portfolio of asset classes. A VIE is an entity that does not have sufficient equity to finance its own activities without additional financial support or where investors lack certain characteristics of a controlling financial interest. We assess our contractual, ownership or other interests in a VIE to determine if our interest participates in the variability the VIE was designed to absorb and pass onto variable interest holders. We perform an ongoing qualitative assessment of our variable interests in VIEs to determine whether we have a controlling financial interest and would therefore be considered the primary beneficiary of the VIE. If we determine we are the primary beneficiary of a VIE, we consolidate the assets and liabilities of the VIE in our consolidated financial statements.
Accounting Estimates and Assumptions
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions affecting the reported amounts of assets and liabilities and the disclosures of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses for the reporting period. Those estimates are inherently subject to change and actual results could differ from those estimates. Included among the material (or potentially material) reported amounts and disclosures that require extensive use of estimates are: fair value of certain invested assets and derivatives, other-than-temporary impairment (“OTTI”) and asset valuation allowances, deferred acquisition costs (“DAC”), value of business acquired (“VOBA”), deferred sales inducements (“DSI”), goodwill, future contract benefits, other contract holder funds including deferred front-end loads (“DFEL”), pension plans, stock-based incentive compensation, income taxes and the potential effects of resolving litigated matters.
Business Combinations
We use the acquisition method of accounting for all business combination transactions, and accordingly, recognize the fair values of assets acquired, liabilities assumed and any noncontrolling interests in our consolidated financial statements. The allocation of fair values may be subject to adjustment after the initial allocation for up to a one-year period as more information becomes available relative to the fair values as of the acquisition date. The consolidated financial statements include the results of operations of any acquired company since the acquisition date.
Fair Value Measurement
Our measurement of fair value is based on assumptions used by market participants in pricing the asset or liability, which may include inherent risk, restrictions on the sale or use of an asset or non-performance risk (“NPR”), which would include our own credit risk. Our estimate of an exchange price is the price in an orderly transaction between market participants to sell the asset or transfer the liability (“exit price”) in the principal market, or the most advantageous market in the absence of a principal market, for that asset or liability, as
6
opposed to the price that would be paid to acquire the asset or receive a liability (“entry price”). Pursuant to the Fair Value Measurements and Disclosures Topic of the Financial Accounting Standards Board (“FASB”) Accounting Standards CodificationTM (“ASC”),
we categorize our financial instruments carried at fair value into a three-level fair value hierarchy, based on the priority of inputs to the respective valuation technique. The three-level hierarchy for fair value measurement is defined as follows:
|
· |
Level 1 – inputs to the valuation methodology are quoted prices available in active markets for identical investments as of the reporting date, except for large holdings subject to “blockage discounts” that are excluded; |
|
· |
Level 2 – inputs to the valuation methodology are other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date, and fair value can be determined through the use of models or other valuation methodologies; and |
|
· |
Level 3 – inputs to the valuation methodology are unobservable inputs in situations where there is little or no market activity for the asset or liability, and we make estimates and assumptions related to the pricing of the asset or liability, including assumptions regarding risk. |
In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the investment.
When a determination is made to classify an asset or liability within Level 3 of the fair value hierarchy, the determination is based upon the significance of the unobservable inputs to the overall fair value measurement. Because certain securities trade in less liquid or illiquid markets with limited or no pricing information, the determination of fair value for these securities is inherently more difficult. However, Level 3 fair value investments may include, in addition to the unobservable or Level 3 inputs, observable components, which are components that are actively quoted or can be validated to market-based sources.
Available-For-Sale Securities – Fair Valuation Methodologies and Associated Inputs
Securities classified as available-for-sale (“AFS”) consist of fixed maturity securities and are stated at fair value with unrealized gains and losses included within accumulated other comprehensive income (loss) (“AOCI”), net of associated DAC, VOBA, DSI, future contract benefits, other contract holder funds and deferred income taxes.
We measure the fair value of our securities classified as AFS based on assumptions used by market participants in pricing the security. The most appropriate valuation methodology is selected based on the specific characteristics of the fixed maturity security, and we consistently apply the valuation methodology to measure the security’s fair value. Our fair value measurement is based on a market approach that utilizes prices and other relevant information generated by market transactions involving identical or comparable securities. Sources of inputs to the market approach primarily include third-party pricing services, independent broker quotations or pricing matrices. We do not adjust prices received from third parties; however, we do analyze the third-party pricing services’ valuation methodologies and related inputs and perform additional evaluation to determine the appropriate level within the fair value hierarchy.
The observable and unobservable inputs to our valuation methodologies are based on a set of standard inputs that we generally use to evaluate all of our AFS securities. Observable inputs include benchmark yields, reported trades, broker-dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data. In addition, market indicators, industry and economic events are monitored, and further market data is acquired if certain triggers are met. For certain security types, additional inputs may be used, or some of the inputs described above may not be applicable. For private placement securities, we use pricing matrices that utilize observable pricing inputs of similar public securities and Treasury yields as inputs to the fair value measurement. Depending on the type of security or the daily market activity, standard inputs may be prioritized differently or may not be available for all AFS securities on any given day. For broker-quoted only securities, non-binding quotes from market makers or broker-dealers are obtained from sources recognized as market participants. For securities trading in less liquid or illiquid markets with limited or no pricing information, we use unobservable inputs to measure fair value.
7
The following summarizes our fair valuation methodologies and associated inputs, which are particular to the specified security type and are in addition to the defined standard inputs to our valuation methodologies for all of our AFS securities discussed above:
|
· |
Corporate bonds and U.S. government bonds – We also use Trade Reporting and Compliance EngineTM reported tables for our corporate bonds and vendor trading platform data for our U.S. government bonds. |
|
· |
Mortgage- and asset-backed securities (“ABS”) – We also utilize additional inputs, which include new issues data, monthly payment information and monthly collateral performance, including prepayments, severity, delinquencies, step-down features and over collateralization features for each of our mortgage-backed securities (“MBS”), which include collateralized mortgage obligations and mortgage pass through securities backed by residential mortgages (“RMBS”), commercial mortgage-backed securities (“CMBS”), collateralized loan obligations (“CLOs”) and collateralized debt obligations (“CDOs”). |
|
· |
State and municipal bonds – We also use additional inputs that include information from the Municipal Securities Rule Making Board, as well as material event notices, new issue data, issuer financial statements and Municipal Market Data benchmark yields for our state and municipal bonds. |
|
· |
Hybrid and redeemable preferred securities – We also utilize additional inputs of exchange prices (underlying and common stock of the same issuer) for our hybrid and redeemable preferred securities. |
In order to validate the pricing information and broker-dealer quotes, we employ, where possible, procedures that include comparisons with similar observable positions, comparisons with subsequent sales and observations of general market movements for those security classes. We have policies and procedures in place to review the process that is utilized by our third-party pricing service and the output that is provided to us by the pricing service. On a periodic basis, we test the pricing for a sample of securities to evaluate the inputs and assumptions used by the pricing service, and we perform a comparison of the pricing service output to an alternative pricing source. We also evaluate prices provided by our primary pricing service to ensure that they are not stale or unreasonable by reviewing the prices for unusual changes from period to period based on certain parameters or for lack of change from one period to the next.
AFS Securities – Evaluation for Recovery of Amortized Cost
We regularly review our fixed maturity AFS securities (also referred to as “debt securities”) for declines in fair value that we determine to be other-than-temporary.
For our debt securities, we generally consider the following to determine whether our debt securities with unrealized losses are other-than-temporarily impaired:
|
· |
The estimated range and average period until recovery; |
|
· |
The estimated range and average holding period to maturity; |
|
· |
Remaining payment terms of the security; |
|
· |
Current delinquencies and nonperforming assets of underlying collateral; |
|
· |
Expected future default rates; |
|
· |
Collateral value by vintage, geographic region, industry concentration or property type; |
|
· |
Subordination levels or other credit enhancements as of the balance sheet date as compared to origination; and |
|
· |
Contractual and regulatory cash obligations. |
For a debt security, if we intend to sell a security, or it is more likely than not we will be required to sell a debt security before recovery of its amortized cost basis and the fair value of the debt security is below amortized cost, we conclude that an OTTI has occurred and the amortized cost is written down to current fair value, with a corresponding charge to realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss). If we do not intend to sell a debt security, or it is not more likely than not we will be required to sell a debt security before recovery of its amortized cost basis but the present value of the cash flows expected to be collected is less than the amortized cost of the debt security (referred to as the credit loss), we conclude that an OTTI has occurred and the amortized cost is written down to the estimated recovery value with a corresponding charge to realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss), as this amount is deemed the credit portion of the OTTI. The remainder of the decline to fair value is recorded in other comprehensive income (“OCI”) to unrealized OTTI on AFS securities on our Consolidated Statements of Stockholder’s Equity, as this amount is considered a noncredit (i.e., recoverable) impairment.
8
When assessing our intent to sell a debt security, or if it is more likely than not we will be required to sell a debt security before recovery of its cost basis, we evaluate facts and circumstances such as, but not limited to, decisions to reposition our security portfolio, sales of securities to meet cash flow needs and sales of securities to capitalize on favorable pricing. Management considers the following as part of the evaluation:
|
· |
The current economic environment and market conditions; |
|
· |
Our business strategy and current business plans; |
|
· |
The nature and type of security, including expected maturities and exposure to general credit, liquidity, market and interest rate risk; |
|
· |
Our analysis of data from financial models and other internal and industry sources to evaluate the current effectiveness of our hedging and overall risk management strategies; |
|
· |
The current and expected timing of contractual maturities of our assets and liabilities, expectations of prepayments on investments and expectations for surrenders and withdrawals of life insurance policies and annuity contracts; |
|
· |
The capital risk limits approved by management; and |
|
· |
Our current financial condition and liquidity demands. |
In order to determine the amount of the credit loss for a debt security, we calculate the recovery value by performing a discounted cash flow analysis based on the current cash flows and future cash flows we expect to recover. The discount rate is the effective interest rate implicit in the underlying debt security. The effective interest rate is the original yield, or the coupon if the debt security was previously impaired. See the discussion below for additional information on the methodology and significant inputs, by security type, that we use to determine the amount of a credit loss.
To determine the recovery period of a debt security, we consider the facts and circumstances surrounding the underlying issuer including, but not limited to, the following:
|
· |
Historical and implied volatility of the security; |
|
· |
Length of time and extent to which the fair value has been less than amortized cost; |
|
· |
Adverse conditions specifically related to the security or to specific conditions in an industry or geographic area; |
|
· |
Failure, if any, of the issuer of the security to make scheduled payments; and |
|
· |
Recoveries or additional declines in fair value subsequent to the balance sheet date. |
In periods subsequent to the recognition of an OTTI, the AFS security is accounted for as if it had been purchased on the measurement date of the OTTI. Therefore, for the fixed maturity AFS security, the original discount or reduced premium is reflected in net investment income over the contractual term of the investment in a manner that produces a constant effective yield.
To determine recovery value of a corporate bond, CLO or CDO, we perform additional analysis related to the underlying issuer including, but not limited to, the following:
|
· |
Fundamentals of the issuer to determine what we would recover if they were to file bankruptcy versus the price at which the market is trading; |
|
· |
Fundamentals of the industry in which the issuer operates; |
|
· |
Earnings multiples for the given industry or sector of an industry that the underlying issuer operates within, divided by the outstanding debt to determine an expected recovery value of the security in the case of a liquidation; |
|
· |
Expected cash flows of the issuer (e.g., whether the issuer has cash flows in excess of what is required to fund its operations); |
|
· |
Expectations regarding defaults and recovery rates; |
|
· |
Changes to the rating of the security by a rating agency; and |
|
· |
Additional market information (e.g., if there has been a replacement of the corporate debt security). |
Each quarter, we review the cash flows for the MBS to determine whether or not they are sufficient to provide for the recovery of our amortized cost. We revise our cash flow projections only for those securities that are at most risk for impairment based on current credit enhancement and trends in the underlying collateral performance. To determine recovery value of a MBS, we perform additional analysis related to the underlying issuer including, but not limited to, the following:
|
· |
Discounted cash flow analysis based on the current cash flows and future cash flows we expect to recover; |
|
· |
Level of creditworthiness of the home equity loans or residential mortgages that back an RMBS or commercial mortgages that back a CMBS; |
|
· |
Susceptibility to fair value fluctuations for changes in the interest rate environment; |
|
· |
Susceptibility to reinvestment risks, in cases where market yields are lower than the securities’ book yield earned; |
|
· |
Susceptibility to reinvestment risks, in cases where market yields are higher than the book yields earned on a security; |
|
· |
Expectations of sale of such a security where market yields are higher than the book yields earned on a security; and |
|
· |
Susceptibility to variability of prepayments. |
9
When evaluating MBS and mortgage-related ABS, we consider a number of pool-specific factors as well as market level factors when determining whether or not the impairment on the security is temporary or other-than-temporary. The most important factor is the performance of the underlying collateral in the security and the trends of that performance in the prior periods. We use this information about the collateral to forecast the timing and rate of mortgage loan defaults, including making projections for loans that are already delinquent and for those loans that are currently performing but may become delinquent in the future. Other factors used in this analysis include the credit characteristics of borrowers, geographic distribution of underlying loans and timing of liquidations by state. Once default rates and timing assumptions are determined, we then make assumptions regarding the severity of a default if it were to occur. Factors that impact the severity assumption include expectations for future home price appreciation or depreciation, loan size, first lien versus second lien, existence of loan level private mortgage insurance, type of occupancy and geographic distribution of loans. Once default and severity assumptions are determined for the security in question, cash flows for the underlying collateral are projected including expected defaults and prepayments. These cash flows on the collateral are then translated to cash flows on our tranche based on the cash flow waterfall of the entire capital security structure. If this analysis indicates the entire principal on a particular security will not be returned, the security is reviewed for OTTI by comparing the expected cash flows to amortized cost. To the extent that the security has already been impaired or was purchased at a discount, such that the amortized cost of the security is less than or equal to the present value of cash flows expected to be collected, no impairment is required. Otherwise, if the amortized cost of the security is greater than the present value of the cash flows expected to be collected, and the security was not purchased at a discount greater than the expected principal loss, then impairment is recognized.
We further monitor the cash flows of all of our AFS securities backed by mortgages on an ongoing basis. We also perform detailed analysis on all of our subprime, Alt-A, non-agency residential MBS and on a significant percentage of our AFS securities backed by pools of commercial mortgages. The detailed analysis includes revising projected cash flows by updating the cash flows for actual cash received and applying assumptions with respect to expected defaults, foreclosures and recoveries in the future. These revised projected cash flows are then compared to the amount of credit enhancement (subordination) in the structure to determine whether the amortized cost of the security is recoverable. If it is not recoverable, we record an impairment of the security.
Trading Securities
Trading securities consist of fixed maturity securities in designated portfolios, some of which support modified coinsurance (“Modco”) and coinsurance with funds withheld (“CFW”) reinsurance arrangements. Investment results for the portfolios that support Modco and CFW reinsurance arrangements, including gains and losses from sales, are passed directly to the reinsurers pursuant to contractual terms of the reinsurance arrangements. Trading securities are carried at fair value, and changes in fair value and changes in the fair value of embedded derivative liabilities associated with the underlying reinsurance arrangements are recorded in realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss) as they occur.
Equity Securities
As of January 1, 2018, equity securities are carried at fair value, and changes in fair value are recorded in realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss) as they occur. Equity securities consist primarily of common stock of publicly-traded companies, privately placed securities and mutual fund shares. We measure the fair value of our equity securities based on assumptions used by market participants in pricing the security. The most appropriate valuation methodology is selected based on the specific characteristics of the equity security. Fair values of publicly-traded equity securities are determined using quoted prices in active markets for identical or comparable securities. When quoted prices are not available, we use valuation methodologies most appropriate for the specific asset. Fair values for private placement securities are determined using discounted cash flow, earnings multiple and other valuation models. The fair values of mutual fund shares that transact regularly are based on transaction prices of identical fund shares.
Alternative Investments
Alternative investments, which consist primarily of investments in limited partnerships (“LPs”), are included in other investments on our Consolidated Balance Sheets. We account for our investments in LPs using the equity method to determine the carrying value. Recognition of alternative investment income is delayed due to the availability of the related financial statements, which are generally obtained from the partnerships’ general partners. As a result, our private equity investments are generally on a three-month delay and our hedge funds are on a one-month delay. In addition, the impact of audit adjustments related to completion of calendar-year financial statement audits of the investees are typically received during the second quarter of each calendar year. Accordingly, our investment income from alternative investments for any calendar-year period may not include the complete impact of the change in the underlying net assets for the partnership for that calendar-year period.
Payables for Collateral on Investments
When we enter into collateralized financing transactions on our investments, a liability is recorded equal to the cash or non-cash collateral received. This liability is included within payables for collateral on investments on our Consolidated Balance Sheets. Income and expenses associated with these transactions are recorded as investment income and investment expenses within net investment income on our Consolidated Statements of Comprehensive Income (Loss). Changes in payables for collateral on investments are reflected within cash flows from investing activities on our Consolidated Statements of Cash Flows.
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Mortgage Loans on Real Estate
Mortgage loans on real estate consist of commercial and residential mortgage loans and are carried at unpaid principal balances adjusted for amortization of premiums and accretion of discounts and are net of valuation allowances. Interest income is accrued on the principal balance of the loan based on the loan’s contractual interest rate. Premiums and discounts are amortized using the effective yield method over the life of the loan. Interest income and amortization of premiums and discounts are reported in net investment income on our Consolidated Statements of Comprehensive Income (Loss) along with mortgage loan fees, which are recorded as they are incurred.
Our policy is to report loans that are 60 or more days past due, which equates to two or more payments missed, as delinquent. We do not accrue interest on loans 90 days past due, and any interest received on these loans is either applied to the principal or recorded in net investment income on our Consolidated Statements of Comprehensive Income (Loss) when received, depending on the assessment of the collectability of the loan. We resume accruing interest once a loan complies with all of its original terms or restructured terms. Mortgage loans deemed uncollectible are charged against the valuation allowance, and subsequent recoveries, if any, are credited to the valuation allowance.
We establish a valuation allowance to provide for the risk of credit losses inherent in our portfolio. The valuation allowance includes specific valuation allowances for loans that are deemed to be impaired as well as general valuation allowances for pools of loans with similar risk characteristics where a property risk or market specific risk has not been identified but for which we anticipate a loss may occur. Loans are considered impaired when it is probable that, based upon current information and events, we will be unable to collect all amounts due under the contractual terms of the loan agreement. When we determine that a loan is impaired, a specific valuation allowance is established for the excess carrying value of the loan over its estimated value. The loan’s estimated value is based on: the present value of expected future cash flows discounted at the loan’s effective interest rate; the loan’s observable market price; or the fair value of the loan’s collateral. Changes in valuation allowances are reported in realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss). General valuation allowances are primarily based on loss history adjusted for current conditions.
Valuation allowances are maintained at a level we believe is adequate to absorb estimated probable credit losses. Our periodic evaluation of the adequacy of the valuation allowances is based on historical loss experience, known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay (including the timing of future payments), the estimated value of the underlying collateral, composition of the loan portfolio, current economic conditions and other relevant factors.
Our commercial loan portfolio is primarily comprised of long-term loans secured by existing commercial real estate. We believe all of the commercial loans in our portfolio share three primary risks: borrower credit worthiness; sustainability of the cash flow of the property; and market risk; therefore, our methods of monitoring and assessing credit risk are consistent for our entire portfolio.
For our commercial mortgage loan portfolio, trends in market vacancy and rental rates are incorporated into the analysis that we perform for monitored loans and may contribute to the establishment of (or an increase or decrease in) a valuation allowance. In addition, we review each loan individually in our commercial mortgage loan portfolio on an annual basis to identify emerging risks. We focus on properties that experienced a reduction in debt-service coverage or that have significant exposure to tenants with deteriorating credit profiles. Where warranted, we establish or increase a valuation allowance for a specific loan based upon this analysis.
We measure and assess the credit quality of our commercial mortgage loans by using loan-to-value and debt-service coverage ratios. The loan-to-value ratio compares the principal amount of the loan to the fair value at origination of the underlying property collateralizing the loan and is commonly expressed as a percentage. Loan-to-value ratios greater than 100% indicate that the principal amount is greater than the collateral value. Therefore, all else being equal, a lower loan-to-value ratio generally indicates a higher quality loan. The debt-service coverage ratio compares a property’s net operating income to its debt-service payments. Debt-service coverage ratios of less than 1.0 indicate that property operations do not generate enough income to cover its current debt payments. Therefore, all else being equal, a higher debt-service coverage ratio generally indicates a higher quality loan.
Our residential loan portfolio is primarily comprised of first lien mortgages secured by existing residential real estate. In contrast to the commercial mortgage loan portfolio, residential mortgage loans are primarily smaller-balance homogenous loans that share similar risk characteristics. Therefore, these pools of loans are collectively evaluated for inherent credit losses. Such evaluations consider numerous factors, including, but not limited to borrower credit scores, collateral values, loss forecasts, geographic location, delinquency rates and economic trends. These evaluations and assessments are revised as conditions change and new information becomes available, which can cause the valuation allowances to increase or decrease over time as such evaluations are revised. Residential mortgage loan pools exclude loans that have been impaired as those loans are evaluated individually using the evaluation framework for specific valuation allowances described above.
For residential mortgage loans, our primary credit quality indicator is whether the loan is performing or nonperforming. We generally define nonperforming residential mortgage loans as those that are 60 or more days past due and/or in nonaccrual status. There is generally a higher risk of experiencing credit losses when a residential mortgage loan is nonperforming.
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Policy Loans
Policy loans represent loans we issue to contract holders that use the cash surrender value of their life insurance policy as collateral. Policy loans are carried at unpaid principal balances.
Real Estate
Real estate includes both real estate held for the production of income and real estate held-for-sale. Real estate held for the production of income is carried at cost less accumulated depreciation. Depreciation is calculated on a straight-line basis over the estimated useful life of the asset. We periodically review properties held for the production of income for impairment. Properties whose carrying values are greater than their projected undiscounted cash flows are written down to estimated fair value, with impairment losses reported in realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss). The estimated fair value of real estate is generally computed using the present value of expected future cash flows from the real estate discounted at a rate commensurate with the underlying risks. Real estate classified as held-for-sale is stated at the lower of depreciated cost or fair value less expected disposition costs at the time classified as held-for-sale. Real estate is not depreciated while it is classified as held-for-sale. Also, valuation allowances are established, as appropriate, for real estate held-for-sale and any changes to the valuation allowances are reported in realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss). Real estate acquired through foreclosure proceedings is recorded at fair value at the settlement date.
Derivative Instruments
We hedge certain portions of our exposure to interest rate risk, foreign currency exchange risk, equity market risk and credit risk by entering into derivative transactions. All of our derivative instruments are recognized as either assets or liabilities on our Consolidated Balance Sheets at estimated fair value. We categorized derivatives into a three-level hierarchy, based on the priority of the inputs to the respective valuation technique as discussed above in “Fair Value Measurement.” The accounting for changes in the estimated fair value of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship, and further, on the type of hedging relationship. For those derivative instruments that are designated and qualify as hedging instruments, we designate the hedging instrument based upon the exposure being hedged: as a cash flow hedge or a fair value hedge.
For derivative instruments that are designated and qualify as a cash flow hedge, the effective portion of the gain or loss on the derivative instrument is reported as a component of AOCI and reclassified into net income in the same period or periods during which the hedged transaction affects net income. The remaining gain or loss on the derivative instrument in excess of the cumulative change in the present value of designated future cash flows of the hedged item (hedge ineffectiveness), if any, is recognized in net income during the period of change. For derivative instruments that are designated and qualify as a fair value hedge, the gain or loss on the derivative instrument, as well as the offsetting gain or loss on the hedged item attributable to the hedged risk are recognized in net income during the period of change in estimated fair values. For derivative instruments not designated as hedging instruments, but that are economic hedges, the gain or loss is recognized in net income.
We purchase and issue financial instruments and products that contain embedded derivative instruments. When it is determined that the embedded derivative possesses economic characteristics that are not clearly and closely related to the economic characteristics of the host contract, and a separate instrument with the same terms would qualify as a derivative instrument, the embedded derivative is bifurcated from the host for measurement purposes. The embedded derivative is carried at fair value with changes in fair value recognized in net income during the period of change.
We employ several different methods for determining the fair value of our derivative instruments. The fair value of our derivative contracts are measured based on current settlement values, which are based on quoted market prices, industry standard models that are commercially available and broker quotes. These techniques project cash flows of the derivatives using current and implied future market conditions. We calculate the present value of the cash flows to measure the current fair market value of the derivative.
Cash and Invested Cash
Cash and invested cash is carried at cost and includes all highly liquid debt instruments purchased with an original maturity of three months or less.
DAC, VOBA, DSI and DFEL
Acquisition costs directly related to successful contract acquisitions or renewals of universal life insurance (“UL”), variable universal life insurance (“VUL”), traditional life insurance, annuities and other investment contracts have been deferred (i.e., DAC) to the extent recoverable. VOBA is an intangible asset that reflects the estimated fair value of in-force contracts in a life insurance company acquisition and represents the portion of the purchase price that is allocated to the value of the right to receive future cash flows from the business in force at the acquisition date. Bonus credits and excess interest for dollar cost averaging contracts are considered DSI. Contract sales charges that are collected in the early years of an insurance contract are deferred (i.e., DFEL), and the unamortized balance is reported in other contract holder funds on our Consolidated Balance Sheets.
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Both DAC and VOBA amortization, excluding amounts reported in realized gain (loss), is reported within commissions and other expenses on our Consolidated Statements of Comprehensive Income (Loss). DSI amortization, excluding amounts reported in realized gain (loss), is reported in interest credited on our Consolidated Statements of Comprehensive Income (Loss). The amortization of DFEL, excluding amounts reported in realized gain (loss), is reported within fee income on our Consolidated Statements of Comprehensive Income (Loss). The methodology for determining the amortization of DAC, VOBA, DSI and DFEL varies by product type. For all insurance contracts, amortization is based on assumptions consistent with those used in the development of the underlying contract adjusted for emerging experience and expected trends.
Acquisition costs for UL and VUL insurance and investment-type products, which include fixed and variable deferred annuities, are generally amortized over the lives of the policies in relation to the incidence of estimated gross profits (“EGPs”) from surrender charges, investment, mortality net of reinsurance ceded and expense margins and actual realized gain (loss) on investments. Contract lives for UL and VUL policies are estimated to be 40 years based on the expected lives of the contracts. Contract lives for fixed and variable deferred annuities are generally between 15 and 30 years, while some of our fixed multi-year guarantee products have amortization periods equal to the guarantee period. The front-end load annuity product has an assumed life of 25 years. Longer lives are assigned to those blocks that have demonstrated lower lapse experience.
Acquisition costs for all traditional contracts, including traditional life insurance contracts, such as individual whole life, group business and term life insurance, are amortized over the expected premium-paying period that generally results in amortization less than 30 years. Acquisition costs are either amortized on a straight-line basis or as a level percent of premium of the related policies depending on the block of business. There is currently no DAC, VOBA, DSI or DFEL balance or related amortization for fixed and variable payout annuities.
We account for modifications of insurance contracts that result in a substantially unchanged contract as a continuation of the replaced contract. We account for modifications of insurance contracts that result in a substantially changed contract as an extinguishment of the replaced contract.
The carrying amounts of DAC, VOBA, DSI and DFEL are adjusted for the effects of realized and unrealized gains and losses on securities classified as AFS and certain derivatives and embedded derivatives. Amortization expense of DAC, VOBA, DSI and DFEL reflects an assumption for an expected level of credit-related investment losses. When actual credit-related investment losses are realized, we recognize a true-up to our DAC, VOBA, DSI and DFEL amortization within realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss) reflecting the incremental effect of actual versus expected credit-related investment losses. These actual to expected amortization adjustments can create volatility from period to period in realized gain (loss).
During the third quarter of each year, we conduct our annual comprehensive review of the assumptions and the projection models used for our estimates of future gross profits underlying the amortization of DAC, VOBA, DSI and DFEL and the calculations of the embedded derivatives and reserves for life insurance and annuity products. These assumptions include, but are not limited to, capital markets, investment margins, mortality, retention, rider utilization and maintenance expenses (costs associated with maintaining records relating to insurance and individual and group annuity contracts, and with the processing of premium collections, deposits, withdrawals and commissions). Based on our review, the cumulative balances of DAC, VOBA, DSI and DFEL included on our Consolidated Balance Sheets are adjusted with an offsetting benefit or charge to revenue or amortization expense to reflect such change related to our expectations of future EGPs (“unlocking”). We may have unlocking in other quarters as we become aware of information that warrants updating assumptions outside of our annual comprehensive review. We may also identify and implement actuarial modeling refinements that result in increases or decreases to the carrying values of DAC, VOBA, DSI, DFEL, embedded derivatives and reserves for life insurance and annuity products with living benefit and death benefit guarantees.
DAC, VOBA, DSI and DFEL are reviewed to ensure that the unamortized portion does not exceed the expected recoverable amounts.
Reinsurance
We and our insurance subsidiaries enter into reinsurance agreements in the normal course of business to limit our exposure to the risk of loss and to enhance our capital management.
In order for a reinsurance agreement to qualify for reinsurance accounting, the agreement must satisfy certain risk transfer conditions that include, among other items, a reasonable possibility of a significant loss for the assuming entity. When we apply reinsurance accounting, premiums, benefits and DAC amortization are reported net of insurance ceded on our Consolidated Statements of Comprehensive Income (Loss). Amounts currently recoverable, such as ceded reserves, are reported in reinsurance recoverables and amounts currently payable to the reinsurers, such as premiums, are included in other liabilities on our Consolidated Balance Sheets. Assets and liabilities and premiums and benefits from certain reinsurance contracts that grant statutory surplus relief to our insurance companies are netted on our Consolidated Balance Sheets and Consolidated Statements of Comprehensive Income (Loss), respectively, if there is a contractual right of offset.
We use deposit accounting to recognize reinsurance agreements that do not transfer significant insurance risk. This accounting treatment results in amounts paid or received by our insurance subsidiaries to be considered on deposit with the reinsurer and such amounts are reported in other assets and other liabilities, respectively, on our Consolidated Balance Sheets. As amounts are paid or received, consistent with the underlying contracts, deposit assets or liabilities are adjusted.
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Goodwill
We recognize the excess of the purchase price, plus the fair value of any noncontrolling interest in the acquiree, over the fair value of identifiable net assets acquired as goodwill. Goodwill is not amortized, but is reviewed for impairment annually as of October 1 and more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value.
We perform a quantitative goodwill impairment test where the fair value of the reporting unit is determined and compared to the carrying value of the reporting unit. If the fair value of the reporting unit is greater than the reporting unit’s carrying value, then the carrying value of the reporting unit is deemed to be recoverable. If the carrying value of the reporting unit is greater than the reporting unit’s fair value, goodwill is impaired and written down to the reporting unit’s fair value; and a charge is reported in impairment of intangibles on our Consolidated Statements of Comprehensive Income (Loss). The results of one goodwill impairment test on one reporting unit cannot subsidize the results of another reporting unit.
Other Assets and Other Liabilities
Other assets consist primarily of DSI, specifically identifiable intangible assets, property and equipment owned by the Company, balances associated with corporate-owned and bank-owned life insurance, certain reinsurance assets, receivables resulting from sales of securities that had not yet settled as of the balance sheet date, debt issuance costs associated with line-of-credit arrangements, assets under capital leases, guaranteed living benefit (“GLB”) reserves embedded derivatives, deferred losses on business sold through reinsurance and other prepaid expenses. Other liabilities consist primarily of current and deferred taxes, pension and other employee benefit liabilities, derivative instrument liabilities, certain reinsurance payables, payables resulting from purchases of securities that had not yet settled as of the balance sheet date, interest on borrowed funds, obligations under capital leases, deferred gain on business sold through reinsurance and other accrued expenses.
Other assets and other liabilities on our Consolidated Balance Sheets include GLB features and remaining guaranteed interest and similar contracts that are carried at fair value, which may be reported in either other assets or other liabilities. The fair value of these items represents approximate exit price including an estimate for our NPR. Certain of these features have elements of both insurance benefits and embedded derivatives. Through our hybrid accounting approach, for reserve calculation purposes we assign product cash flows to the embedded derivative or insurance portion of the reserves based on the life-contingent nature of the benefits. We classify these GLB reserves embedded derivatives in Level 3 within the hierarchy levels described above in “Fair Value Measurement.” We report the insurance portion of the reserves in future contract benefits.
The carrying values of specifically identifiable intangible assets are reviewed at least annually for indicators of impairment in value that are other-than-temporary, including unexpected or adverse changes in the following: the economic or competitive environments in which the company operates; profitability analyses; cash flow analyses; and the fair value of the relevant business operation. If there was an indication of impairment, then the discounted cash flow method would be used to measure the impairment, and the carrying value would be adjusted as necessary and reported in impairment of intangibles on our Consolidated Statements of Comprehensive Income (Loss). Sales force intangibles are attributable to the value of the new business distribution system acquired through business combinations. These assets are amortized on a straight-line basis over their useful life of 25 years. Specifically identifiable intangible assets also includes the value of customer relationships acquired (“VOCRA”) and the value of distribution agreements (“VODA”) that were acquired through our business combination during 2018. See Note 3 for more information regarding specifically identifiable intangible assets acquired.
Property and equipment owned for company use is carried at cost less allowances for depreciation. Provisions for depreciation of investment real estate and property and equipment owned for company use are computed principally on the straight-line method over the estimated useful lives of the assets, which include buildings, computer hardware and software and other property and equipment. Certain assets on our Consolidated Balance Sheets are related to capital leases. These assets under capital leases are depreciated in a manner consistent with our current depreciation policy for owned assets. We periodically review the carrying value of our long-lived assets, including property and equipment, for impairment whenever events or circumstances indicate that the carrying amount of such assets may not be fully recoverable. For long-lived assets to be held and used, impairments are recognized when the carrying amount of a long-lived asset is not recoverable and exceeds its fair value. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. An impairment loss is measured as the amount by which the carrying amount of a long-lived asset exceeds its fair value.
Long-lived assets to be disposed of by abandonment or in an exchange for a similar productive long-lived asset are classified as held-for-use until they are disposed. Long-lived assets to be sold are classified as held-for-sale and are no longer depreciated. Certain criteria have to be met in order for the long-lived asset to be classified as held-for-sale, including that a sale is probable and expected to occur within one year. Long-lived assets classified as held-for-sale are recorded at the lower of their carrying amount or fair value less cost to sell.
Other assets includes deferred losses on business sold through reinsurance attributable to our 2012 and 2014 reinsurance transactions where we ceded closed blocks of UL contracts with secondary guarantees to Lincoln National Reinsurance Company (Barbados) Limited (“LNBAR”), a wholly-owned subsidiary of LNC. We are recognizing the losses related to these transactions over a period of 30 years.
Other liabilities includes a deferred gain on business sold through reinsurance attributable to our annuity reinsurance agreement with Athene Holding Ltd. (“Athene”) effective October 1, 2018. We are recognizing the gain related to this transaction over the period over
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which the majority of account values are expected to run off, or 20 years. During 2012 and 2013, we completed reinsurance transactions whereby we ceded a closed block of UL contracts with secondary guarantees to LNBAR. We are recognizing the gains related to these transactions over a period of 30 years. During 2009, we completed a reinsurance transaction whereby we assumed a closed block of term contracts from First Penn-Pacific Life Insurance Company, a wholly-owned subsidiary of LNC. We are recognizing the gain related to this transaction over a period of 15 years.
Separate Account Assets and Liabilities
We maintain separate account assets, which are reported at fair value. The related liabilities are reported at an amount equivalent to the separate account assets. Investment risks associated with market value changes are borne by the contract holders, except to the extent of minimum guarantees made by the Company with respect to certain accounts.
We issue variable annuity contracts through our separate accounts for which investment income and investment gains and losses accrue directly to, and investment risk is borne by, the contract holder (traditional variable annuities). We also issue variable annuity and life contracts through separate accounts that may include various types of guaranteed death benefit (“GDB”), guaranteed withdrawal benefit (“GWB”) and guaranteed income benefit (“GIB”) features. The GDB features include those where we contractually guarantee to the contract holder either: return of no less than total deposits made to the contract less any partial withdrawals (“return of net deposits”); total deposits made to the contract less any partial withdrawals plus a minimum return (“minimum return”); or the highest contract value on any contract anniversary date through age 80. The highest contract value is increased by purchase payments and is decreased by withdrawals subsequent to that anniversary date in the same proportion that withdrawals reduce the contract value.
As discussed in Note 6, certain features of these guarantees are accounted for as embedded derivative reserves, whereas other guarantees are accounted for as benefit reserves. Other guarantees contain characteristics of both and are accounted for under an approach that calculates the value of the embedded derivative reserve and the benefit reserve based on the specific characteristics of each GLB feature. We use derivative instruments to hedge our exposure to the risks and earnings volatility that result from the embedded derivatives for living benefits in certain of our variable annuity products. The change in fair value of these instruments tends to move in the opposite direction of the change in the value of the associated reserves. The net impact of these changes is reported as a component of realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss).
The “market consistent scenarios” used in the determination of the fair value of the GLB liability are similar to those used by an investment bank to value derivatives for which the pricing is not transparent and the aftermarket is nonexistent or illiquid. We use risk-neutral Monte Carlo simulations in our calculation to value the entire block of guarantees, which involve 100 unique scenarios per policy or approximately 49 million scenarios. The market consistent scenario assumptions, as of each valuation date, are those we view to be appropriate for a hypothetical market participant. The market consistent inputs include, but are not limited to, assumptions for capital markets (e.g., implied volatilities, correlation among indices, risk-free swap curve, etc.), policyholder behavior (e.g., policy lapse, rider utilization, etc.), mortality, risk margins, maintenance expenses and a margin for profit. 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. It is possible that different valuation techniques and assumptions could produce a materially different estimate of fair value.
Future Contract Benefits and Other Contract Holder Funds
Future contract benefits represent liability reserves that we have established and carry based on estimates of how much we will need to pay for future benefits and claims. Other contract holder funds represent liabilities for fixed account values, including the fixed portion of variable, dividends payable, premium deposit funds, undistributed earnings on participating business and other contract holder funds as well as the carrying value of DFEL discussed above.
The liabilities for future contract benefits and claim reserves for UL and VUL insurance policies consist of contract account balances that accrue to the benefit of the contract holders, excluding surrender charges. The liabilities for future insurance contract benefits and claim reserves for traditional life policies are computed using assumptions for investment yields, mortality and withdrawals based principally on generally accepted actuarial methods and assumptions at the time of contract issue. Investment yield assumptions for traditional direct individual life reserves for all contracts range from 2.25% to 7.75% depending on the time of contract issue. The investment yield assumptions for immediate and deferred paid-up annuities range from 1.25% to 12.75%. These investment yield assumptions are intended to represent an estimation of the interest rate experience for the period that these contract benefits are payable.
The liabilities for future claim reserves for variable annuity products containing GDB features are calculated by estimating 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 (“benefit ratio”) multiplied by the cumulative assessments recorded from the contract inception through the balance sheet date less the cumulative GDB payments plus interest on the liability. The change in the liability for a period is the benefit ratio multiplied by the assessments recorded for the period less GDB claims paid in the period plus interest. As experience or assumption changes result in a change in expected benefit payments or assessments, the benefit ratio is unlocked, that is, recalculated using the updated expected benefit payments and assessments over the life of the contract since inception. The revised benefit ratio is then applied to the liability calculation described above, with the resulting change in liability reported in benefits on our Consolidated Statements of Comprehensive Income (Loss).
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The liability for future claim reserves for long-term disability contracts for incurred and reported claims are calculated based on assumptions as to interest, claim resolution rates and offsets for other insurance including social security. Claim resolution rate assumptions and social security offsets are based on our actual experience. The interest rate assumptions used for discounting claim reserves are based on projected portfolio yield rates, after consideration for defaults and investment expenses, for assets supporting the liabilities. The incurred but not reported claim reserves are based on our experiences as to the reporting lags and ultimate loss experience. Claim reserves are subject to revision as current claim experience and projections of future factors affecting claim experience change. Claim reserves do not include a provision for adverse deviation.
With respect to our future contract benefits and other contract holder funds, we continually review overall reserve position, reserving techniques and reinsurance arrangements. As experience develops and new information becomes known, liabilities are adjusted as deemed necessary. The effects of changes in estimates are included in the operating results for the period in which such changes occur.
The business written or assumed by us includes participating life insurance contracts, under which the contract holder is entitled to share in the earnings of such contracts via receipt of dividends. The dividend scale for participating policies is reviewed annually and may be adjusted to reflect recent experience and future expectations. As of December 31, 2018 and 2017, participating policies comprised less than 1% of the face amount of business in force, and dividend expenses were $56 million, $57 million and $59 million for the years ended December 31, 2018, 2017 and 2016, respectively.
Liabilities for the secondary guarantees on UL-type products are calculated by multiplying the benefit ratio by the cumulative assessments recorded from contract inception through the balance sheet date less the cumulative secondary guarantee benefit payments plus interest. If experience or assumption changes result in a new benefit ratio, the reserves are adjusted to reflect the changes in a manner similar to the unlocking of DAC, VOBA, DFEL and DSI. The accounting for secondary guarantee benefits impacts, and is impacted by, EGPs used to calculate amortization of DAC, VOBA, DFEL and DSI.
Certain of our variable annuity contracts reported within future contract benefits contain GLB reserves embedded derivatives, a portion of which may be reported in either other assets or other liabilities, and include guaranteed interest and similar contracts, that are carried at fair value on our Consolidated Balance Sheets, which represents approximate exit price including an estimate for our NPR. Certain of these features have elements of both insurance benefits and embedded derivatives. Through our hybrid accounting approach, for reserve calculation purposes we assign product cash flows to the embedded derivative or insurance portion of the reserves based on the life-contingent nature of the benefits. We classify these GLB reserves embedded derivatives items in Level 3 within the hierarchy levels described above in “Fair Value Measurement.” We report the insurance portion of the reserves in future contract benefits.
The fair value of our indexed annuity contracts is based on their approximate surrender values.
Borrowed Funds
LNL’s short-term borrowings are defined as borrowings with contractual or expected maturities of one year or less. Long-term borrowings have contractual or expected maturities greater than one year.
Contingencies and Commitments
Contingencies arising from environmental remediation costs, regulatory judgments, claims, assessments, guarantees, litigation, recourse reserves, fines, penalties and other sources are recorded when deemed probable and reasonably estimable.
Fee Income
Fee income for investment and interest-sensitive life insurance contracts consists of asset-based fees, percent of premium charges, contract administration charges and surrender charges that are assessed against contract holder account balances. Investment products consist primarily of individual and group variable and fixed deferred annuities. Interest-sensitive life insurance products include UL insurance, VUL insurance and other interest-sensitive life insurance policies. These products include life insurance sold to individuals, corporate-owned life insurance and bank-owned life insurance.
In bifurcating the embedded derivative of our GLB features on our variable annuity products, we attribute to the embedded derivative the portion of total fees collected from the contract holder that relate to the GLB riders (the “attributed fees”), which are not reported within fee income on our Consolidated Statements of Comprehensive Income (Loss). These attributed fees represent the present value of future claims expected to be paid for the GLB at the inception of the contract plus a margin that a theoretical market participant would include for risk/profit and are reported within realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss).
The timing of revenue recognition as it relates to fees assessed on investment contracts is determined based on the nature of such fees. Asset-based fees, cost of insurance and contract administration charges are assessed on a daily or monthly basis and recognized as revenue as performance obligations are met, over the period underlying customer assets are owned or advisory services are provided. Percent of premium charges are assessed at the time of premium payment and recognized as revenue when assessed and earned. Certain amounts assessed that represent compensation for services to be provided in future periods are reported as unearned revenue and recognized in income over the periods benefited. Surrender charges are recognized upon surrender of a contract by the contract holder in accordance with contractual terms.
16
For investment and interest-sensitive life insurance contracts, the amounts collected from contract holders are considered deposits and are not included in revenue.
Insurance Premiums
Our insurance premiums for traditional life insurance and group insurance products are recognized as revenue when due from the contract holder. Our traditional life insurance products include those products with fixed and guaranteed premiums and benefits and consist primarily of whole life insurance, limited-payment life insurance, term life insurance and certain annuities with life contingencies. Our group insurance products consist primarily of term life, disability and dental.
Net Investment Income
Dividends and interest income, recorded in net investment income, are recognized when earned. Amortization of premiums and accretion of discounts on investments in debt securities are reflected in net investment income over the contractual terms of the investments in a manner that produces a constant effective yield.
For CLOs and MBS, included in the trading and AFS fixed maturity securities portfolios, we recognize income using a constant effective yield based on anticipated prepayments and the estimated economic life of the securities. When actual prepayments differ significantly from originally anticipated prepayments, the retrospective effective yield is recalculated to reflect actual payments to date and a catch up adjustment is recorded in the current period. In addition, the new effective yield, which reflects anticipated future payments, is used prospectively. Any adjustments resulting from changes in effective yield are reflected in net investment income on our Consolidated Statements of Comprehensive Income (Loss).
Realized Gain (Loss)
Realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss) includes realized gains and losses from the sale of investments, write-downs for other-than-temporary impairments of investments, changes in fair value of equity securities, certain derivative and embedded derivative gains and losses, gains and losses on the sale of subsidiaries and businesses and net gains and losses on reinsurance embedded derivatives and trading securities. Realized gains and losses on the sale of investments are determined using the specific identification method. Realized gain (loss) is recognized in net income, net of associated amortization of DAC, VOBA, DSI and DFEL. Realized gain (loss) is also net of allocations of investment gains and losses to certain contract holders and certain funds withheld on reinsurance arrangements for which we have a contractual obligation.
Other Revenues
Other revenues consists primarily of fees attributable to broker-dealer services recorded as performance obligations are met, either at the time of sale or over time based on a contractual percentage of customer account values, changes in the market value of our seed capital investments, and proceeds from reinsurance recaptures. Other revenues earned by our Group Protection segment consist of fees from administrative services performed, which are recognized as performance obligations are met over the terms of the underlying agreements.
Interest Credited
Interest credited includes interest credited to contract holder account balances. Interest crediting rates associated with funds invested in our general account during 2016 through 2018 ranged from 1% to 10%.
Benefits
Benefits for UL and other interest-sensitive life insurance products include benefit claims incurred during the period in excess of contract account balances. Benefits also include the change in reserves for life insurance products with secondary guarantee benefits, annuity products with guaranteed death and living benefits and certain annuities with life contingencies. For traditional life, group health and disability income products, benefits are recognized when incurred in a manner consistent with the related premium recognition policies.
Strategic Digitization Expense
Strategic digitization expense consists primarily of costs related to our enterprise-wide digitization initiative.
Pension and Other Postretirement Benefit Plans
Pursuant to the accounting rules for our obligations to employees and agents under our various pension and other postretirement benefit plans, we are required to make a number of assumptions to estimate related liabilities and expenses. The mortality assumption is based on actual and anticipated plan experience, determined using acceptable actuarial methods. We use assumptions for the weighted-average discount rate and expected return on plan assets to estimate pension expense. The discount rate assumptions are determined using an analysis of current market information and the projected benefit flows associated with these plans. The expected long-term rate of return on plan assets is based on historical and projected future rates of return on the funds invested in the plan. The calculation of our
17
accumulated postretirement benefit obligation also uses an assumption of weighted-average annual rate of increase in the per capita cost of covered benefits, which reflects a health care cost trend rate.
Stock-Based Compensation
In general, we expense the fair value of stock awards included in our incentive compensation plans. As of the date LNC’s Board of Directors approves stock awards, the fair value of stock options is determined using a Black-Scholes options valuation methodology, and the fair value of other stock awards is based upon the market value of the stock. The fair value of the awards is expensed over the performance or service period, which generally corresponds to the vesting period, and is recognized as an increase to common stock in stockholder’s equity. We apply an estimated forfeiture rate to our accrual of compensation cost. We classify certain stock awards as liabilities. For these awards, the settlement value is classified as a liability on our Consolidated Balance Sheets, and the liability is marked-to-market through net income at the end of each reporting period. Stock-based compensation expense is reflected in commissions and other expenses on our Consolidated Statements of Comprehensive Income (Loss).
Interest and Debt Expense
Interest expense on our short-term and long-term debt is recognized as due and any associated premiums, discounts and costs are amortized (accreted) over the term of the related borrowing utilizing the effective interest method. In addition, gains or losses related to certain derivative instruments associated with debt are recognized in interest and debt expense during the period of the change.
Income Taxes
LNC files a U.S. consolidated income tax return that includes us and LNC’s other eligible subsidiaries. Ineligible subsidiaries file separate individual corporate tax returns. Deferred income taxes are recognized, based on enacted rates, when assets and liabilities have different values for financial statement and tax reporting purposes. A valuation allowance is recorded to the extent required. Considerable judgment and the use of estimates are required in determining whether a valuation allowance is necessary and, if so, the amount of such valuation allowance. In evaluating the need for a valuation allowance, we consider many factors, including: the nature and character of the deferred tax assets and liabilities; taxable income in prior carryback years; future reversals of temporary differences; the length of time carryovers can be utilized; and any tax planning strategies we would employ to avoid a tax benefit from expiring unused.
18
Adoption of New Accounting Standards
The following table provides a description of our adoption of new Accounting Standards Updates (“ASUs”) issued by the FASB and the impact of the adoption on our financial statements. ASUs not listed below were assessed and determined to be either not applicable or insignificant in presentation or amount.
|
Standard |
Description |
Date of Adoption |
Effect on Financial Statements or Other Significant Matters |
|
ASU 2014-09, Revenue from Contracts with Customers and all related amendments |
This standard establishes the core principle of recognizing revenue to depict the transfer of promised goods and services and defines a five-step process that systematically identifies the various components of the revenue recognition process, culminating with the recognition of revenue upon satisfaction of an entity’s performance obligation. Although the standard and all related amendments supersede nearly all existing revenue recognition guidance under GAAP, the guidance does not amend the accounting for insurance and investment contracts recognized in accordance with ASC Topic 944, Financial Services – Insurance, leases, financial instruments and guarantees. |
January 1, 2018 |
We adopted the standard and all related amendments using the modified retrospective method. Our primary sources of revenue are recognized in accordance with ASC Topic 944, Financial Services – Insurance; as such, revenue within the scope of the new standard primarily includes commissions and advisory fees earned by our broker-dealer operation, as well as group protection administrative service fees. The adoption did not have a material impact on our consolidated financial condition, results of operations, stockholder’s equity or cash flows. There were no material changes in the timing or measurement of revenues based upon the guidance. As a result, there is no cumulative effect on retained earnings. For more information, see Note 21. |
|
ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities |
These amendments require, among other things, the fair value measurement of investments in equity securities and certain other ownership interests that do not result in consolidation and are not accounted for under the equity method of accounting. The change in fair value of the impacted investments in equity securities must be recognized in net income in the period of the change in fair value. In addition, the amendments include certain enhancements to the presentation and disclosure requirements for financial assets and financial liabilities. The guidance does not apply to Federal Home Loan Bank (“FHLB”) stock. Early adoption of the ASU is generally not permitted, except as defined in the ASU. |
January 1, 2018 |
At the time of adoption, we had equity securities classified as AFS with a total carrying value of $246 million. We classified, prospectively, $110 million of equity securities within the scope of this ASU in a separate line on our Consolidated Balance Sheets. The remaining securities, consisting of $136 million of FHLB stock, are classified in other investments on our Consolidated Balance Sheets and carried at cost. The cumulative effect adjustment of adopting this ASU did not have a material impact on our consolidated financial condition or results of operations. |
|
ASU 2018-02, Reclassification of Certain Tax Effects From Accumulated Other Comprehensive Income |
These amendments require a reclassification from AOCI to retained earnings for stranded tax effects associated with the change in the federal corporate income tax rate in the Tax Cuts and Jobs Act (“Tax Act”) of 2017. The amount of the reclassification is equal to the impact of the change in deferred taxes related to amounts recorded in AOCI resulting from the change in the statutory corporate tax rate from 35% to 21%. Early adoption is permitted and retrospective application is required. |
January 1, 2018 |
We retrospectively reclassified $644 million of stranded tax effects from AOCI to retained earnings in the period of adoption. |
19
Future Adoption of New Accounting Standards
The following table provides a description of future adoptions of new accounting standards that may have an impact on our financial statements when adopted:
|
Standard |
Description |
Projected Date of Adoption |
Effect on Financial Statements or Other Significant Matters |
|
ASU 2016-02, Leases and all related amendments |
This standard establishes a new accounting model for leases. Lessees will recognize most leases on the balance sheet as a right-of-use asset and a related lease liability. The lease liability is measured as the present value of the lease payments over the lease term with the right-of-use asset measured at the lease liability amount and including adjustments for certain lease incentives and initial direct costs. Lease expense recognition will continue to differentiate between finance leases and operating leases resulting in a similar pattern of lease expense recognition as under current GAAP. This ASU permits a modified retrospective adoption approach that includes a number of optional practical expedients that entities may elect upon adoption. Early adoption is permitted. |
January 1, 2019 |
The adoption of this standard and related amendments will result in the recognition of approximately $200 million in right-of-use assets and lease liabilities on our Consolidated Balance Sheets as of January 1, 2019. Comparative periods will continue to be measured and presented under historical guidance, and only the period of adoption will be subject to this ASU. Additionally, there is not a significant difference in our pattern of lease expense recognition under this ASU, and there is no impact on cash flows. |
|
ASU 2017-08, Premium Amortization on Purchased Callable Debt Securities |
These amendments require an entity to shorten the amortization period for certain callable debt securities held at a premium so that the premium is amortized to the earliest call date. Early adoption is permitted, and the ASU requires adoption under a modified retrospective basis through a cumulative effect adjustment to the beginning balance of retained earnings. |
January 1, 2019 |
We do not expect the adoption of this guidance to have a material impact on our consolidated financial condition and results of operations. |
|
ASU 2017-12, Targeted Improvements to Accounting for Hedging Activities |
These amendments change both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. These amendments retain the threshold of highly effective for hedging relationships, remove the requirement to bifurcate between the portions of the hedging relationship that are effective and ineffective, record hedge item and hedging instrument results in the same financial statement line item, require quantitative assessment initially for all hedging relationships unless the hedging relationship meets the definition of either the shortcut method or critical terms match method and allow the contractual specified index rate to be designated as the hedged risk in a cash flow hedge of interest rate risk of a variable rate financial instrument. These amendments also eliminate the benchmark interest rate concept for variable rate instruments. Early adoption is permitted. |
January 1, 2019 |
We do not expect the adoption of this guidance to have a material impact on our consolidated financial condition and results of operations. |
|
|
20
|
Standard |
Description |
Projected Date of Adoption |
Effect on Financial Statements or Other Significant Matters |
|
ASU 2016-13, Measurement of Credit Losses on Financial Instruments |
These amendments adopt a new model to measure and recognize credit losses for most financial assets. The method used to measure estimated credit losses for AFS debt securities will be unchanged from current GAAP; however, the amendments require credit losses to be recognized through an allowance rather than as a reduction to the amortized cost of those debt securities. The amendments will permit entities to recognize improvements in credit loss estimates on AFS debt securities by reducing the allowance account immediately through earnings. The amendments will be adopted through a cumulative effect adjustment to the beginning balance of retained earnings as of the first reporting period in which the amendments are effective. Early adoption is permitted for annual periods beginning after December 15, 2018, and interim periods therein. |
January 1, 2020 |
We are currently evaluating the impact of adopting this ASU on our consolidated financial condition and results of operations, with a primary focus on our fixed maturity securities, mortgage loans and reinsurance recoverables. |
|
ASU 2018-12, Targeted Improvements to the Accounting for Long-Duration Contracts |
These amendments make changes to the accounting and reporting for long-duration contracts issued by an insurance entity that will significantly change how insurers account for long-duration contracts, including how they measure, recognize and make disclosures about insurance liabilities and DAC. Under this ASU, insurers will be required to review cash flow assumptions at least annually and update them if necessary. They also will have to make quarterly updates to the discount rate assumptions they use to measure the liability for future policyholder benefits. The ASU creates a new category of market risk benefits (i.e., features that protect the contract holder from capital market risk and expose the insurer to that risk) that insurers will have to measure at fair value. The ASU provides various transition methods by topic that entities may elect upon adoption. Early adoption is permitted. |
January 1, 2021 |
We are currently evaluating the impact of adopting this ASU on our consolidated financial condition and results of operations. |
3. Acquisition
As previously announced, on May 1, 2018, we completed the acquisition of 100% of the capital stock of Liberty Life, which operates a group benefits business (“Liberty Group Business”) and individual life and individual and group annuity business (the “Liberty Life Business”), from Liberty Mutual Insurance Company in a transaction accounted for under the acquisition method of accounting pursuant to Business Combinations Topic 805 (“Topic 805”). The acquisition enables us to increase our market share within the group protection marketplace.
In connection with the acquisition and pursuant to the Master Transaction Agreement (“MTA”), dated January 18, 2018, which was attached as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on January 22, 2018, Liberty Life sold the Liberty Life Business on May 1, 2018, by entering into reinsurance agreements and related ancillary documents (including administrative services agreements and transition services agreements) with Protective Life Insurance Company and its wholly-owned subsidiary, Protective Life and Annuity Insurance Company (together with Protective Life Insurance Company, “Protective”), providing for the reinsurance and administration of the Liberty Life Business.
Liberty Life’s excess capital of $1.8 billion was paid to Liberty Mutual Insurance Company through an extraordinary dividend at the acquisition date. We paid $1.5 billion of cash to Liberty Mutual Insurance Company to acquire the Liberty Group Business.
21
We recognized $85 million of acquisition-related costs, pre-tax, for the year ended December 31, 2018. These costs are included in commissions and other expenses on our Consolidated Statements of Comprehensive Income (Loss).
The acquisition date fair values of certain assets and liabilities, including future contract benefits, intangible assets and related weighted average expected lives, commercial mortgage loans, reinsurance recoverables and deferred income taxes, are provisional and subject to revision within one year of the acquisition date. Since the May 1, 2018 acquisition date, we have adjusted provisional assets acquired by $(5) million and provisional liabilities acquired by $27 million for an increase in provisional goodwill of $32 million. Under the terms of the MTA, a final balance sheet will be agreed upon at a later date. As such, our estimates of fair values are pending finalization, which may result in adjustments to goodwill. The following table presents the preliminary fair values (in millions) of the net assets acquired related to the Liberty Group Business as of December 31, 2018:
|
|
|||
|
|
Preliminary |
||
|
|
Fair Value |
||
|
Assets |
|||
|
Investments |
$ |
2,493 | |
|
Mortgage loans on real estate |
658 | ||
|
Cash and invested cash |
107 | ||
|
Reinsurance recoverables |
76 | ||
|
Premiums and fees receivable |
83 | ||
|
Accrued investment income |
24 | ||
|
Other intangible assets acquired |
640 | ||
|
Other assets acquired |
142 | ||
|
Separate account assets |
99 | ||
|
Total assets acquired |
$ |
4,322 | |
|
|
|||
|
Liabilities |
|||
|
Future contract benefits |
$ |
2,930 | |
|
Other contract holder funds |
46 | ||
|
Other liabilities acquired |
144 | ||
|
Separate account liabilities |
99 | ||
|
Total liabilities assumed |
$ |
3,219 | |
|
|
|||
|
Net identifiable assets acquired |
$ |
1,103 | |
|
Goodwill |
414 | ||
|
Net assets acquired |
$ |
1,517 | |
Identifiable Intangible Assets
The following table presents the fair value of identifiable intangible assets acquired (dollars in millions):
|
|
|||||
|
|
Weighted- |
||||
|
|
Average |
||||
|
|
Amortization |
||||
|
|
Fair Value |
Period |
|||
|
VOCRA |
$ |
576 | 20 | ||
|
VODA |
31 | 13 | |||
|
VOBA |
30 | 3 | |||
|
Insurance licenses |
3 |
N/A |
|||
|
Total identifiable intangible assets |
$ |
640 | |||
VOCRA and VODA are included in other assets on our Consolidated Balance Sheets and reflect the estimated fair value of these intangible assets related to the Liberty Group Business as of May 1, 2018. The value of the identifiable intangible assets was estimated using a discounted cash flow method. Significant inputs to the valuation models include estimates of expected premiums, persistency rates, investment returns, claim costs, expenses and discount rates based on a weighted average cost of capital. The carrying values of VOCRA and VODA are amortized using a straight-line method and reviewed at least annually for indicators of impairment in value that are other-than-temporary.
For information on VOBA, see Notes 1 and 8.
22
The value of insurance licenses acquired was estimated using the comparable transaction method under the market approach based on arms-length transactions in which certificate authority companies with life and health insurance licenses were purchased. The value of insurance licenses has an indefinite useful life.
Goodwill
Goodwill is calculated as the excess of the consideration transferred over the net assets recognized and represents the future economic benefits arising from assets acquired and liabilities assumed that could not be individually identified. The goodwill recorded as part of the acquisition is attributable to expected synergies and other benefits that management believes will result from the acquisition, including an increase in distribution strength. The goodwill resulting from the acquisition was allocated to the Group Protection segment. The goodwill is not expected to be deductible for income tax purposes. For more information on goodwill, see Notes 1 and 10.
Future Contract Benefits
Unpaid claims acquired reflected within future contract benefits were recorded at estimated fair value. The reserve discount rate was based on the investment yield of the assets acquired with adjustments for risk margin. The actuarial classifications and methodologies were adjusted to be consistent with our accounting policies and reserve methodologies.
Financial Information
Since the acquisition date of May 1, 2018, the revenues and net income of the business acquired have been included in our Consolidated Statements of Comprehensive Income (Loss) in the Group Protection segment and were $1.5 billion and $36 million, respectively, for the period ended December 31, 2018.
The following unaudited pro forma condensed consolidated results of operations of the Company assume that the acquisition of Liberty Life was completed on January 1, 2017 (in millions):
|
|
||||||
|
|
For the Years Ended |
|||||
|
|
December 31, |
|||||
|
|
2018 |
2017 |
||||
|
Revenue |
$ |
16,097 |
$ |
15,080 | ||
|
|
||||||
|
Net income |
1,642 | 2,034 | ||||
Pro forma adjustments include the revenue and net income of the acquired business for each period as well as amortization of identifiable intangible assets acquired and the fair value adjustment to acquired insurance reserves and investments. Other pro forma adjustments include the impact of reflecting acquisition and integration costs and investment expenses directly attributable to the business combination in 2017 instead of in 2018. Pro forma adjustments do not include retrospective adjustments to defer and amortize acquisition costs as would be recorded under our accounting policy.
Reinsurance
Pursuant to the reinsurance agreements, the Liberty Life Business was sold to Protective for a ceding commission of $423 million. Our amounts recoverable from reinsurers increased significantly to $19.8 billion as of December 31, 2018, from $6.5 billion as of December 31, 2017, primarily as a result of this reinsurance transaction. As such, Protective now represents our largest reinsurance exposure. As we are not relieved of our liability, the liabilities and obligations associated with the reinsured policies remain on our Consolidated Balance Sheets with a corresponding reinsurance recoverable from Protective. To support its obligations under the reinsurance agreements, Protective has established trust accounts for our benefit that fully collateralize the related reinsurance recoverable. We recorded a deferred tax asset attributed to a tax loss carryforward arising from the reinsurance transaction with Protective.
23
4. Variable Interest Entities
Unconsolidated VIEs
Reinsurance Related Notes
Effective October 1, 2017, our captive reinsurance subsidiary, the Lincoln Reinsurance Company of Vermont VI, restructured the $275 million, long-term surplus note which was originally issued to a non-affiliated VIE in October 2015 in exchange for two corporate bond AFS securities of like principal and duration. The activities of the VIE are primarily to acquire, hold and issue notes and loans and to pay and collect interest on the notes and loans. The outstanding principal balance of the long-term surplus note is variable in nature; moving concurrently with any variability in the face amount of the corporate bond AFS securities. We have concluded that we are not the primary beneficiary of the non-affiliated VIE because we do not have power over the activities that most significantly affect its economic performance. As of December 31, 2018, the principal balance of the long-term surplus note was zero and we do not currently have any exposure to this VIE.
Structured Securities
Through our investment activities, we make passive investments in structured securities issued by VIEs for which we are not the manager. These structured securities include our RMBS, CMBS, CLOs and CDOs. We have not provided financial or other support with respect to these VIEs other than our original investment. We have determined that we are not the primary beneficiary of these VIEs due to the relative size of our investment in comparison to the principal amount of the structured securities issued by the VIEs and the level of credit subordination that reduces our obligation to absorb losses or right to receive benefits. Our maximum exposure to loss on these structured securities is limited to the amortized cost for these investments. We recognize our variable interest in these VIEs at fair value on our Consolidated Balance Sheets. For information about these structured securities, see Note 5.
Limited Partnerships and Limited Liability Companies
We invest in certain LPs and limited liability companies (“LLCs”), including qualified affordable housing projects, that we have concluded are VIEs. We do not hold any substantive kick-out or participation rights in the LPs and LLCs, and we do not receive any performance fees or decision maker fees from the LPs and LLCs. Based on our analysis of the LPs and LLCs, we are not the primary beneficiary of the VIEs as we do not have the power to direct the most significant activities of the LPs and LLCs.
The carrying amounts of our investments in the LPs and LLCs are recognized in other investments on our Consolidated Balance Sheets and were $1.7 billion and $1.4 billion as of December 31, 2018 and 2017, respectively. Included in these carrying amounts are our investments in qualified affordable housing projects, which were $20 million and $31 million as of December 31, 2018 and 2017, respectively. We do not have any contingent commitments to provide additional capital funding to these qualified affordable housing projects. We receive returns from these qualified affordable housing projects in the form of income tax credits and other tax benefits, which are recognized in federal income tax expense (benefit) on our Consolidated Statements of Comprehensive Income (Loss) and were $1 million and $3 million for the years ended December 31, 2018 and 2017, respectively.
Our exposure to loss is limited to the capital we invest in the LPs and LLCs, and there have been no indicators of impairment that would require us to recognize an impairment loss related to the LPs and LLCs as of December 31, 2018.
5. Investments
AFS Securities
In 2018, we adopted ASU 2016-01, which resulted in a new classification and measurement of our equity securities. See Note 2 for additional information.
24
The amortized cost, gross unrealized gains, losses and OTTI and fair value of AFS securities (in millions) were as follows:
|
|
|||||||||||||||
|
|
As of December 31, 2018 |
||||||||||||||
|
|
Amortized |
Gross Unrealized |
Fair |
||||||||||||
|
|
Cost |
Gains |
Losses |
OTTI (1) |
Value |
||||||||||
|
Fixed maturity AFS securities: |
|||||||||||||||
|
Corporate bonds |
$ |
78,837 |
$ |
2,871 |
$ |
2,167 |
$ |
(8 |
) |
$ |
79,549 | ||||
|
ABS |
898 | 42 | 6 | (14 |
) |
948 | |||||||||
|
U.S. government bonds |
361 | 27 | 2 |
- |
386 | ||||||||||
|
Foreign government bonds |
402 | 42 |
- |
- |
444 | ||||||||||
|
RMBS |
3,099 | 113 | 61 | (13 |
) |
3,164 | |||||||||
|
CMBS |
810 | 6 | 16 | (3 |
) |
803 | |||||||||
|
CLOs |
1,746 | 3 | 24 | (5 |
) |
1,730 | |||||||||
|
State and municipal bonds |
4,498 | 703 | 17 |
- |
5,184 | ||||||||||
|
Hybrid and redeemable preferred securities |
568 | 44 | 33 |
- |
579 | ||||||||||
|
Total AFS securities |
$ |
91,219 |
$ |
3,851 |
$ |
2,326 |
$ |
(43 |
) |
$ |
92,787 | ||||
|
|
|||||||||||||||
|
|
As of December 31, 2017 |
||||||||||||||
|
|
Amortized |
Gross Unrealized |
Fair |
||||||||||||
|
|
Cost |
Gains |
Losses |
OTTI (1) |
Value |
||||||||||
|
Fixed maturity AFS securities: |
|||||||||||||||
|
Corporate bonds |
$ |
74,921 |
$ |
6,573 |
$ |
341 |
$ |
(7 |
) |
$ |
81,160 | ||||
|
ABS |
882 | 51 | 6 | (26 |
) |
953 | |||||||||
|
U.S. government bonds |
497 | 37 | 1 |
- |
533 | ||||||||||
|
Foreign government bonds |
391 | 55 |
- |
- |
446 | ||||||||||
|
RMBS |
3,125 | 148 | 36 | (21 |
) |
3,258 | |||||||||
|
CMBS |
589 | 10 | 2 | (2 |
) |
599 | |||||||||
|
CLOs |
803 | 2 | 2 | (5 |
) |
808 | |||||||||
|
State and municipal bonds |
4,033 | 932 | 6 |
- |
4,959 | ||||||||||
|
Hybrid and redeemable preferred securities |
561 | 85 | 22 |
- |
624 | ||||||||||
|
Total fixed maturity securities |
85,802 | 7,893 | 416 | (61 |
) |
93,340 | |||||||||
|
Equity AFS securities |
247 | 16 | 17 |
- |
246 | ||||||||||
|
Total AFS securities |
$ |
86,049 |
$ |
7,909 |
$ |
433 |
$ |
(61 |
) |
$ |
93,586 | ||||
|
(1) |
Includes unrealized (gains) and losses on credit-impaired securities related to changes in the fair value of such securities subsequent to the impairment measurement date. |
The amortized cost and fair value of fixed maturity AFS securities by contractual maturities (in millions) as of December 31, 2018, were as follows:
|
|
||||||
|
|
Amortized |
Fair |
||||
|
|
Cost |
Value |
||||
|
Due in one year or less |
$ |
3,607 |
$ |
3,636 | ||
|
Due after one year through five years |
16,429 | 16,449 | ||||
|
Due after five years through ten years |
18,366 | 18,271 | ||||
|
Due after ten years |
46,264 | 47,786 | ||||
|
Subtotal |
84,666 | 86,142 | ||||
|
Structured securities (ABS, MBS, CLOs) |
6,553 | 6,645 | ||||
|
Total fixed maturity AFS securities |
$ |
91,219 |
$ |
92,787 | ||
Actual maturities may differ from contractual maturities because issuers may have the right to call or pre-pay obligations.
25
The fair value and gross unrealized losses, including the portion of OTTI recognized in OCI, of AFS securities (dollars in millions), aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, were as follows:
|
|
|||||||||||||||||||
|
|
As of December 31, 2018 |
||||||||||||||||||
|
Less Than or Equal |
Greater Than |
||||||||||||||||||
|
|
to Twelve Months |
Twelve Months |
Total |
||||||||||||||||
|
|
Gross |
Gross |
Gross |
||||||||||||||||
|
Unrealized |
Unrealized |
Unrealized |
|||||||||||||||||
|
|
Fair |
Losses and |
Fair |
Losses and |
Fair |
Losses and |
|||||||||||||
|
|
Value |
OTTI |
Value |
OTTI |
Value |
OTTI |
|||||||||||||
|
Fixed maturity AFS securities: |
|||||||||||||||||||
|
Corporate bonds |
$ |
30,947 |
$ |
1,464 |
$ |
7,023 |
$ |
704 |
$ |
37,970 |
$ |
2,168 | |||||||
|
ABS |
113 | 2 | 136 | 13 | 249 | 15 | |||||||||||||
|
U.S. government bonds |
70 | 1 | 23 | 1 | 93 | 2 | |||||||||||||
|
RMBS |
436 | 9 | 796 | 55 | 1,232 | 64 | |||||||||||||
|
CMBS |
470 | 11 | 82 | 5 | 552 | 16 | |||||||||||||
|
CLOs |
1,124 | 21 | 103 | 3 | 1,227 | 24 | |||||||||||||
|
State and municipal bonds |
376 | 7 | 92 | 10 | 468 | 17 | |||||||||||||
|
Hybrid and redeemable |
|||||||||||||||||||
|
preferred securities |
94 | 6 | 131 | 27 | 225 | 33 | |||||||||||||
|
Total AFS securities |
$ |
33,630 |
$ |
1,521 |
$ |
8,386 |
$ |
818 |
$ |
42,016 |
$ |
2,339 | |||||||
|
|
|||||||||||||||||||
|
Total number of AFS securities in an unrealized loss position |
3,360 | ||||||||||||||||||
|
|
|||||||||||||||||||
|
|
As of December 31, 2017 |
||||||||||||||||||
|
Less Than or Equal |
Greater Than |
||||||||||||||||||
|
|
to Twelve Months |
Twelve Months |
Total |
||||||||||||||||
|
|
Gross |
Gross |
Gross |
||||||||||||||||
|
Unrealized |
Unrealized |
Unrealized |
|||||||||||||||||
|
|
Fair |
Losses and |
Fair |
Losses and |
Fair |
Losses and |
|||||||||||||
|
|
Value |
OTTI |
Value |
OTTI |
Value |
OTTI |
|||||||||||||
|
Fixed maturity AFS securities: |
|||||||||||||||||||
|
Corporate bonds |
$ |
4,726 |
$ |
67 |
$ |
4,706 |
$ |
276 |
$ |
9,432 |
$ |
343 | |||||||
|
ABS |
56 |
- |
143 | 15 | 199 | 15 | |||||||||||||
|
U.S. government bonds |
156 |
- |
19 | 1 | 175 | 1 | |||||||||||||
|
RMBS |
277 | 4 | 599 | 33 | 876 | 37 | |||||||||||||
|
CMBS |
113 |
- |
60 | 3 | 173 | 3 | |||||||||||||
|
CLOs |
281 | 2 | 72 |
- |
353 | 2 | |||||||||||||
|
State and municipal bonds |
33 |
- |
89 | 5 | 122 | 5 | |||||||||||||
|
Hybrid and redeemable |
|||||||||||||||||||
|
preferred securities |
20 |
- |
124 | 22 | 144 | 22 | |||||||||||||
|
Total fixed maturity securities |
5,662 | 73 | 5,812 | 355 | 11,474 | 428 | |||||||||||||
|
Equity AFS securities |
22 | 14 | 8 | 3 | 30 | 17 | |||||||||||||
|
Total AFS securities |
$ |
5,684 |
$ |
87 |
$ |
5,820 |
$ |
358 |
$ |
11,504 |
$ |
445 | |||||||
|
|
|||||||||||||||||||
|
Total number of AFS securities in an unrealized loss position |
1,095 | ||||||||||||||||||
26
The fair value, gross unrealized losses, the portion of OTTI recognized in OCI (in millions) and number of AFS securities where the fair value had declined and remained below amortized cost by greater than 20% were as follows:
|
|
|||||||||||||
|
|
As of December 31, 2018 |
||||||||||||
|
|
Number |
||||||||||||
|
|
Fair |
Gross Unrealized |
of |
||||||||||
|
|
Value |
Losses |
OTTI |
Securities (1) |
|||||||||
|
Less than six months |
$ |
389 |
$ |
122 |
$ |
1 | 44 | ||||||
|
Six months or greater, but less than nine months |
96 | 49 |
- |
11 | |||||||||
|
Nine months or greater, but less than twelve months |
11 | 8 |
- |
2 | |||||||||
|
Twelve months or greater |
138 | 70 | 8 | 32 | |||||||||
|
Total |
$ |
634 |
$ |
249 |
$ |
9 | 89 | ||||||
|
|
|||||||||||||
|
|
As of December 31, 2017 |
||||||||||||
|
|
Number |
||||||||||||
|
|
Fair |
Gross Unrealized |
of |
||||||||||
|
|
Value |
Losses |
OTTI |
Securities (1) |
|||||||||
|
Less than six months |
$ |
156 |
$ |
57 |
$ |
1 | 26 | ||||||
|
Six months or greater, but less than nine months |
2 | 1 |
- |
4 | |||||||||
|
Nine months or greater, but less than twelve months |
12 | 6 |
- |
7 | |||||||||
|
Twelve months or greater |
209 | 77 | 10 | 49 | |||||||||
|
Total |
$ |
379 |
$ |
141 |
$ |
11 | 86 | ||||||
|
(1) |
We may reflect a security in more than one aging category based on various purchase dates. |
We regularly review our investment holdings for OTTI. Our gross unrealized losses, including the portion of OTTI recognized in OCI, on fixed maturity AFS securities increased by $1.9 billion for the year ended December 31, 2018. As discussed further below, we believe the unrealized loss position as of December 31, 2018, did not represent OTTI as (i) we did not intend to sell these fixed maturity AFS securities; (ii) it is not more likely than not that we will be required to sell the fixed maturity AFS securities before recovery of their amortized cost basis; and (iii) the estimated future cash flows were equal to or greater than the amortized cost basis of the debt securities.
Based upon this evaluation as of December 31, 2018, management believes we have the ability to generate adequate amounts of cash from our normal operations (e.g., insurance premiums and fees and investment income) to meet cash requirements with a prudent margin of safety without requiring the sale of our temporarily-impaired securities.
As of December 31, 2018, the unrealized losses associated with our corporate bond securities were attributable primarily to widening credit spreads and rising interest rates since purchase. We performed a detailed analysis of the financial performance of the underlying issuers and determined that we expected to recover the entire amortized cost for each temporarily-impaired security.
As of December 31, 2018, the unrealized losses associated with our MBS and ABS were attributable primarily to widening credit spreads and rising interest rates since purchase. We assessed for credit impairment using a cash flow model that incorporates key assumptions including default rates, severities and prepayment rates. We estimated losses for a security by forecasting the underlying loans in each transaction. The forecasted loan performance was used to project cash flows to the various tranches in the structure, as applicable. Our forecasted cash flows also considered, as applicable, independent industry analyst reports and forecasts and other independent market data. Based upon our assessment of the expected credit losses of the security given the performance of the underlying collateral compared to our subordination or other credit enhancement, we expected to recover the entire amortized cost of each temporarily-impaired security.
As of December 31, 2018, the unrealized losses associated with our hybrid and redeemable preferred securities were attributable primarily to wider credit spreads caused by illiquidity in the market and subordination within the capital structure, as well as credit risk of underlying issuers. For our hybrid and redeemable preferred securities, we evaluated the financial performance of the underlying issuers based upon credit performance and investment ratings and determined that we expected to recover the entire amortized cost of each temporarily-impaired security.
27
Changes in the amount of credit loss of income (loss) where the portion related to other factors was recognized in OCI (in millions) on fixed maturity AFS securities were as follows:
|
|
|||||||||
|
|
For the Years Ended December 31, |
||||||||
|
|
2018 |
2017 |
2016 |
||||||
|
Balance as of beginning-of-year |
$ |
358 |
$ |
411 |
$ |
363 | |||
|
Increases attributable to: |
|||||||||
|
Credit losses on securities for which an |
|||||||||
|
OTTI was not previously recognized |
5 | 13 | 83 | ||||||
|
Credit losses on securities for which an |
|||||||||
|
OTTI was previously recognized |
2 | 7 | 16 | ||||||
|
Decreases attributable to: |
|||||||||
|
Securities sold, paid down or matured |
(28 |
) |
(73 |
) |
(51 |
) |
|||
|
Balance as of end-of-year |
$ |
337 |
$ |
358 |
$ |
411 | |||
During 2018, 2017 and 2016, we recorded credit losses on securities for which an OTTI was not previously recognized as we determined the cash flows expected to be collected would not be sufficient to recover the entire amortized cost basis of the debt security. The credit losses we recorded on securities for which an OTTI was not previously recognized were attributable primarily to one or a combination of the following reasons:
|
· |
Failure of the issuer of the security to make scheduled payments; |
|
· |
Deterioration of creditworthiness of the issuer; |
|
· |
Deterioration of conditions specifically related to the security; |
|
· |
Deterioration of fundamentals of the industry in which the issuer operates; and |
|
· |
Deterioration of the rating of the security by a rating agency. |
We recognize the OTTI attributed to the noncredit portion as a separate component in OCI referred to as unrealized OTTI on fixed maturity AFS securities.
Determination of Credit Losses on Corporate Bonds
As of December 31, 2018 and 2017, we reviewed our corporate bond portfolio for potential shortfalls in contractual principal and interest based on numerous subjective and objective inputs. The factors used to determine the amount of credit loss for each individual security, include, but are not limited to, near-term risk, substantial discrepancy between book and market value, sector or company-specific volatility, negative operating trends and trading levels wider than peers.
Credit ratings express opinions about the credit quality of a security. Securities rated investment grade, that is those rated BBB- or higher by Standard & Poor’s (“S&P”) Rating Services or Baa3 or higher by Moody’s Investors Service (“Moody’s”), are generally considered by the rating agencies and market participants to be low credit risk. As of December 31, 2018 and 2017, 96% of the fair value of our corporate bond portfolio was rated investment grade. As of December 31, 2018 and 2017, the portion of our corporate bond portfolio rated below investment grade had an amortized cost of $3.1 billion and $3.4 billion, respectively, and a fair value of $2.9 billion and $3.4 billion, respectively. Based upon the analysis discussed above, we believed as of December 31, 2018 and 2017, that we would recover the amortized cost of each corporate bond.
Determination of Credit Losses on MBS and ABS
As of December 31, 2018 and 2017, default rates were projected by considering underlying MBS and ABS loan performance and collateral type. Projected default rates on existing delinquencies vary depending on loan type and severity of delinquency status. In addition, we estimate the potential contributions of currently performing loans that may become delinquent in the future based on the change in delinquencies and loan liquidations experienced in the recent history. Finally, we develop a default rate timing curve by aggregating the defaults for all loans in the pool (delinquent loans, foreclosure and real estate owned and new delinquencies from currently performing loans) and the associated loan-level loss severities.
We use certain available loan characteristics such as lien status, loan sizes and occupancy to estimate the loss severity of loans. Second lien loans are assigned 100% severity, if defaulted. For first lien loans, we assume a minimum of 30% severity, with higher severity assumed for investor properties and further adjusted by housing price assumptions. With the default rate timing curve and loan-level loss severity, we derive the future expected credit losses.
28
Trading Securities
Trading securities at fair value (in millions) consisted of the following:
|
|
||||||
|
|
As of December 31, |
|||||
|
|
2018 |
2017 |
||||
|
Fixed maturity securities: |
||||||
|
Corporate bonds |
$ |
1,559 |
$ |
1,250 | ||
|
ABS |
17 | 15 | ||||
|
U.S. government bonds |
43 | 115 | ||||
|
Foreign government bonds |
23 | 23 | ||||
|
RMBS |
78 | 85 | ||||
|
CMBS |
7 | 2 | ||||
|
CLOs |
104 | 3 | ||||
|
State and municipal bonds |
16 | 17 | ||||
|
Hybrid and redeemable preferred securities |
22 | 23 | ||||
|
Total trading securities |
$ |
1,869 |
$ |
1,533 | ||
The portion of the market adjustment for trading gains and losses recognized in realized gain (loss) that relate to trading securities still held as of December 31, 2018, 2017 and 2016, was $(55) million, $8 million and $(3) million, respectively.
Mortgage Loans on Real Estate
The following provides the current and past due composition of our mortgage loans on real estate (in millions):
|
|
||||||||||||||||||
|
|
As of December 31, 2018 |
As of December 31, 2017 |
||||||||||||||||
|
|
Commercial |
Residential |
Total |
Commercial |
Residential |
Total |
||||||||||||
|
Current |
$ |
12,959 |
$ |
239 |
$ |
13,198 |
$ |
10,662 |
$ |
- |
$ |
10,662 | ||||||
|
60 to 90 days past due |
- |
1 | 1 |
- |
- |
- |
||||||||||||
|
Greater than 90 days past due |
- |
- |
- |
3 |
- |
3 | ||||||||||||
|
Valuation allowance |
- |
- |
- |
(3 |
) |
- |
(3 |
) |
||||||||||
|
Unamortized premium (discount) |
(17 |
) |
8 | (9 |
) |
- |
- |
- |
||||||||||
|
Total carrying value |
$ |
12,942 |
$ |
248 |
$ |
13,190 |
$ |
10,662 |
$ |
- |
$ |
10,662 | ||||||
We establish a valuation allowance to provide for the risk of credit losses inherent in our portfolio. The valuation allowance includes specific valuation allowances for loans that are deemed to be impaired as well as general valuation allowances for pools of loans with similar risk characteristics where a property risk or market specific risk has not been identified but for which we anticipate a loss has occurred.
For our commercial mortgage loans, no specifically identified loans were impaired as of December 31, 2018. Three mortgage loans were impaired as of December 31, 2017, with an aggregate principal balance of $11 million for which a specific valuation allowance of $3 million was established resulting in a net carrying value of $8 million.
For our residential mortgage loans, no specifically identified loans were impaired as of December 31, 2018 or 2017. The general allowance established on residential mortgage loans as of December 31, 2018, was less than $1 million.
The changes in the valuation allowance associated with impaired commercial mortgage loans on real estate (in millions) were as follows:
|
|
|||||||||
|
|
For the Years Ended December 31, |
||||||||
|
|
2018 |
2017 |
2016 |
||||||
|
Balance as of beginning-of-year |
$ |
3 |
$ |
2 |
$ |
2 | |||
|
Additions |
- |
1 |
- |
||||||
|
Charge-offs, net of recoveries |
(3 |
) |
- |
- |
|||||
|
Balance as of end-of-year |
$ |
- |
$ |
3 |
$ |
2 | |||
29
The average carrying value for impaired commercial mortgage loans on real estate (in millions) was as follows:
|
|
For the Years Ended December 31, |
||||||||
|
|
2018 |
2017 |
2016 |
||||||
|
Average carrying value for impaired |
|||||||||
|
mortgage loans on real estate |
$ |
5 |
$ |
6 |
$ |
6 | |||
|
Interest income recognized on impaired |
|||||||||
|
mortgage loans on real estate |
1 |
- |
- |
||||||
|
Interest income collected on impaired |
|||||||||
|
mortgage loans on real estate |
1 |
- |
- |
||||||
As described in Note 1, we use the loan-to-value and debt-service coverage ratios as credit quality indicators for our commercial mortgage loans on real estate (dollars in millions) as follows:
|
|
||||||||||||||
|
|
As of December 31, 2018 |
As of December 31, 2017 |
||||||||||||
|
|
Debt- |
Debt- |
||||||||||||
|
|
Service |
Service |
||||||||||||
|
|
Carrying |
% of |
Coverage |
Carrying |
% of |
Coverage |
||||||||
|
Loan-to-Value Ratio |
Value |
Total |
Ratio |
Value |
Total |
Ratio |
||||||||
|
Less than 65% |
$ |
11,656 | 90.1% |
2.30 |
$ |
9,563 | 89.7% |
2.27 |
||||||
|
65% to 74% |
1,234 | 9.5% |
1.76 |
1,000 | 9.4% |
1.94 |
||||||||
|
75% to 100% |
52 | 0.4% |
1.03 |
91 | 0.8% |
0.97 |
||||||||
|
Greater than 100% |
- |
0.0% |
0.00 |
8 | 0.1% |
0.82 |
||||||||
|
Total |
$ |
12,942 | 100.0% |
$ |
10,662 | 100.0% | ||||||||
As described in Note 1, we use loan performance status as the primary credit quality indicator for our residential mortgage loans on real estate (dollars in millions) as follows:
|
|
||||||||||
|
|
As of December 31, 2018 |
As of December 31, 2017 |
||||||||
|
|
Carrying |
% of |
Carrying |
% of |
||||||
|
Performance Indicator |
Value |
Total |
Value |
Total |
||||||
|
Performing |
$ |
247 | 99.6% |
$ |
- |
0.0% | ||||
|
Nonperforming |
1 | 0.4% |
- |
0.0% | ||||||
|
Total |
$ |
248 | 100.0% |
$ |
- |
0.0% | ||||
Our commercial mortgage loan portfolio is geographically diversified throughout the U.S. with the largest concentrations in California, which accounted for 23% and 21% of commercial mortgage loans on real estate as of December 31, 2018 and 2017, respectively, and Texas, which accounted for 12% of commercial mortgage loans on real estate as of December 31, 2018 and 2017.
Our residential mortgage loan portfolio is geographically diversified throughout the U.S. with the largest concentrations in California and Florida, which accounted for 34% and 19%, respectively, of residential mortgage loans on real estate as of December 31, 2018. We did not have residential mortgage loan exposure as of December 31, 2017.
Alternative Investments
As of December 31, 2018 and 2017, alternative investments included investments in 234 and 221 different partnerships, respectively, and the portfolios represented approximately 1% of our overall invested assets.
30
Net Investment Income
The major categories of net investment income (in millions) on our Consolidated Statements of Comprehensive Income (Loss) were as follows:
|
|
|||||||||
|
|
For the Years Ended December 31, |
||||||||
|
|
2018 |
2017 |
2016 |
||||||
|
Fixed maturity AFS securities |
$ |
4,129 |
$ |
4,048 |
$ |
4,019 | |||
|
Equity AFS securities |
- |
12 | 11 | ||||||
|
Trading securities |
79 | 88 | 94 | ||||||
|
Equity securities |
4 |
- |
- |
||||||
|
Mortgage loans on real estate |
492 | 433 | 413 | ||||||
|
Real estate |
1 | 1 | 1 | ||||||
|
Policy loans |
122 | 134 | 139 | ||||||
|
Invested cash |
23 | 11 | 12 | ||||||
|
Commercial mortgage loan prepayment |
|||||||||
|
and bond make-whole premiums |
78 | 138 | 115 | ||||||
|
Alternative investments |
222 | 165 | 75 | ||||||
|
Consent fees |
4 | 6 | 5 | ||||||
|
Other investments |
24 | 5 | 4 | ||||||
|
Investment income |
5,178 | 5,041 | 4,888 | ||||||
|
Investment expense |
(334 |
) |
(281 |
) |
(257 |
) |
|||
|
Net investment income |
$ |
4,844 |
$ |
4,760 |
$ |
4,631 | |||
31
Realized Gain (Loss)
Details underlying realized gain (loss) (in millions) reported on our Consolidated Statements of Comprehensive Income (Loss) were as follows:
|
|
For the Years Ended December 31, |
||||||||
|
|
2018 |
2017 |
2016 |
||||||
|
Fixed maturity AFS securities: (1) |
|||||||||
|
Gross gains |
$ |
36 |
$ |
17 |
$ |
65 | |||
|
Gross losses |
(80 |
) |
(43 |
) |
(128 |
) |
|||
|
Gross OTTI |
(7 |
) |
(20 |
) |
(99 |
) |
|||
|
Equity AFS securities: |
|||||||||
|
Gross gains |
- |
6 | 8 | ||||||
|
Gross OTTI |
- |
- |
(1 |
) |
|||||
|
Gain (loss) on other investments (2) |
(15 |
) |
(10 |
) |
(62 |
) |
|||
|
Associated amortization of DAC, VOBA, DSI and DFEL |
|||||||||
|
and changes in other contract holder funds |
(22 |
) |
(21 |
) |
(24 |
) |
|||
|
Total realized gain (loss) related to certain investments |
(88 |
) |
(71 |
) |
(241 |
) |
|||
|
Realized gain (loss) on the mark-to-market on certain instruments (3) |
251 | (155 |
) |
(66 |
) |
||||
|
Indexed annuity and IUL contracts net derivatives results: (4) |
|||||||||
|
Gross gain (loss) |
(51 |
) |
(22 |
) |
(1 |
) |
|||
|
Associated amortization of DAC, VOBA, DSI and DFEL |
12 | (2 |
) |
(4 |
) |
||||
|
GLB fees ceded to LNBAR and attributed fees: |
|||||||||
|
Gross gain (loss) |
(184 |
) |
(174 |
) |
(166 |
) |
|||
|
Associated amortization of DAC, VOBA, DSI and DFEL |
(32 |
) |
(32 |
) |
(32 |
) |
|||
|
Total realized gain (loss) |
$ |
(92 |
) |
$ |
(456 |
) |
$ |
(510 |
) |
|
(1) |
These amounts are represented net of related fair value hedging activity. See Note 6 for more information. |
|
(2) |
Includes market adjustments on equity securities still held of $(17) million for the year ended December 31, 2018. |
|
(3) |
Represents changes in the fair values of certain derivative investments (not including those associated with our variable and indexed annuity and indexed universal life insurance (“IUL”) contracts net derivatives results), reinsurance related embedded derivatives and trading securities. |
|
(4) |
Represents the net difference between the change in fair value of the S&P 500 Index® (“S&P 500”) call options that we hold and the change in the fair value of the embedded derivative liabilities of our indexed annuity and IUL contracts along with changes in the fair value of embedded derivative liabilities related to index call options we may purchase in the future to hedge contract holder index allocations applicable to future reset periods for our indexed annuity products. |
Details underlying write-downs taken as a result of OTTI (in millions) were as follows:
|
|
|||||||||
|
|
For the Years Ended December 31, |
||||||||
|
|
2018 |
2017 |
2016 |
||||||
|
OTTI Recognized in Net Income (Loss) |
|||||||||
|
Fixed maturity AFS securities: |
|||||||||
|
Corporate bonds |
$ |
(5 |
) |
$ |
(13 |
) |
$ |
(80 |
) |
|
ABS |
(1 |
) |
(2 |
) |
(5 |
) |
|||
|
RMBS |
(1 |
) |
(2 |
) |
(10 |
) |
|||
|
CMBS |
- |
(2 |
) |
(1 |
) |
||||
|
State and municipal bonds |
- |
(1 |
) |
(3 |
) |
||||
|
Total fixed maturity AFS securities |
(7 |
) |
(20 |
) |
(99 |
) |
|||
|
Equity AFS securities |
- |
- |
(1 |
) |
|||||
|
Gross OTTI recognized in net income (loss) |
(7 |
) |
(20 |
) |
(100 |
) |
|||
|
Associated amortization of DAC, VOBA, DSI and DFEL |
- |
2 |
- |
||||||
|
Net OTTI recognized in net income (loss) |
$ |
(7 |
) |
$ |
(18 |
) |
$ |
(100 |
) |
We recognized less than $1 million of OTTI in OCI for the years ended December 31, 2018 and 2017. We recognized $53 million of gross OTTI in OCI, offset by $12 million for the change in DAC, VOBA, DSI and DFEL, for the year ended December 31, 2016.
32
Payables for Collateral on Investments
The carrying value of the payables for collateral on investments included on our Consolidated Balance Sheets and the fair value of the related investments or collateral (in millions) consisted of the following:
|
|
||||||||||||
|
|
As of December 31, 2018 |
As of December 31, 2017 |
||||||||||
|
|
Carrying |
Fair |
Carrying |
Fair |
||||||||
|
|
Value |
Value |
Value |
Value |
||||||||
|
Collateral payable for derivative investments (1) |
$ |
616 |
$ |
616 |
$ |
701 |
$ |
701 | ||||
|
Securities pledged under securities lending agreements (2) |
88 | 85 | 222 | 213 | ||||||||
|
Securities pledged under repurchase agreements (3) |
152 | 157 | 531 | 554 | ||||||||
|
Investments pledged for Federal Home Loan Bank of |
||||||||||||
|
Indianapolis (“FHLBI”) (4) |
3,930 | 5,923 | 2,900 | 4,235 | ||||||||
|
Total payables for collateral on investments |
$ |
4,786 |
$ |
6,781 |
$ |
4,354 |
$ |
5,703 | ||||
|
(1) |
We obtain collateral based upon contractual provisions with our counterparties. These agreements take into consideration the counterparties’ credit rating as compared to ours, the fair value of the derivative investments and specified thresholds that if exceeded result in the receipt of cash that is typically invested in cash and invested cash. See Note 6 for additional information. |
|
(2) |
Our pledged securities under securities lending agreements are included in fixed maturity AFS securities on our Consolidated Balance Sheets. We generally obtain collateral in an amount equal to 102% and 105% of the fair value of the domestic and foreign securities, respectively. We value collateral daily and obtain additional collateral when deemed appropriate. The cash received in our securities lending program is typically invested in cash and invested cash or fixed maturity AFS securities. |
|
(3) |
Our pledged securities under repurchase agreements are included in fixed maturity AFS securities on our Consolidated Balance Sheets. We obtain collateral in an amount equal to 95% of the fair value of the securities, and our agreements with third parties contain contractual provisions to allow for additional collateral to be obtained when necessary. The cash received in our repurchase program is typically invested in fixed maturity AFS securities. |
|
(4) |
Our pledged investments for FHLBI are included in fixed maturity AFS securities and mortgage loans on real estate on our Consolidated Balance Sheets. The collateral requirements are generally 105% to 115% of the fair value for fixed maturity AFS securities and 155% to 175% of the fair value for mortgage loans on real estate. The cash received in these transactions is primarily invested in cash and invested cash or fixed maturity AFS securities. |
Increase (decrease) in payables for collateral on investments (in millions) consisted of the following:
|
|
|||||||||
|
|
For the Years Ended December 31, |
||||||||
|
|
2018 |
2017 |
2016 |
||||||
|
Collateral payable for derivative investments |
$ |
(85 |
) |
$ |
(112 |
) |
$ |
(481 |
) |
|
Securities pledged under securities lending agreements |
(134 |
) |
5 | (25 |
) |
||||
|
Securities pledged under repurchase agreements |
(379 |
) |
1 | (144 |
) |
||||
|
Investments pledged for FHLBI |
1,030 | (450 |
) |
995 | |||||
|
Total increase (decrease) in payables for collateral on investments |
$ |
432 |
$ |
(556 |
) |
$ |
345 | ||
33
We have elected not to offset our repurchase agreements and securities lending transactions in our financial statements. The remaining contractual maturities of repurchase agreements and securities lending transactions accounted for as secured borrowings (in millions) were as follows:
|
|
|||||||||||||||
|
|
|||||||||||||||
|
|
As of December 31, 2018 |
||||||||||||||
|
|
Overnight and Continuous |
Up to 30 Days |
30 – 90 Days |
Greater Than 90 Days |
Total |
||||||||||
|
Repurchase Agreements |
|||||||||||||||
|
Corporate bonds |
$ |
- |
$ |
- |
$ |
- |
$ |
152 |
$ |
152 | |||||
|
Securities Lending |
|||||||||||||||
|
Corporate bonds |
88 |
- |
- |
- |
88 | ||||||||||
|
Total gross secured borrowings |
$ |
88 |
$ |
- |
$ |
- |
$ |
152 |
$ |
240 | |||||
|
|
|||||||||||||||
|
|
|||||||||||||||
|
|
As of December 31, 2017 |
||||||||||||||
|
|
Overnight and Continuous |
Up to 30 Days |
30 – 90 Days |
Greater Than 90 Days |
Total |
||||||||||
|
Repurchase Agreements |
|||||||||||||||
|
Corporate bonds |
$ |
- |
$ |
100 |
$ |
281 |
$ |
150 |
$ |
531 | |||||
|
Securities Lending |
|||||||||||||||
|
Corporate bonds |
222 |
- |
- |
- |
222 | ||||||||||
|
Total gross secured borrowings |
$ |
222 |
$ |
100 |
$ |
281 |
$ |
150 |
$ |
753 | |||||
We accept collateral in the form of securities in connection with repurchase agreements. In instances where we are permitted to sell or re-pledge the securities received, we report the fair value of the collateral received and a related obligation to return the collateral in the financial statements. In addition, we receive securities in connection with securities borrowing agreements which we are permitted to sell or re-pledge. As of December 31, 2018, the fair value of all collateral received that we are permitted to sell or re-pledge was $537 million. As of December 31, 2018, we have re-pledged $378 million of this collateral to cover initial margin on certain derivative investments.
Investment Commitments
As of December 31, 2018, our investment commitments were $2.1 billion, which included $843 million of LPs, $804 million of mortgage loans on real estate and $476 million of private placement securities.
Concentrations of Financial Instruments
As of December 31, 2018 and 2017, our most significant investments in one issuer were our investments in securities issued by the Federal Home Loan Mortgage Corporation with a fair value of $1.4 billion and $1.2 billion, respectively, or 1% of our invested assets portfolio, and our investments in securities issued by the Federal National Mortgage Association with a fair value of $1.2 billion and $930 million, respectively, or 1% of our invested assets portfolio. These concentrations include fixed maturity AFS, trading and equity securities.
As of December 31, 2018, our most significant investments in one industry were our investments in securities in the financial services industry and the consumer non-cyclical industry with a fair value of $16.0 billion and $13.8 billion, respectively, or 14% and 12%, respectively, of our invested assets portfolio. As of December 31, 2017, our most significant investments in one industry were our investments in securities in the consumer non-cyclical industry and the utilities industry with a fair value of $14.3 billion and $13.8 billion, respectively, or 13% and 12%, respectively, of our invested assets portfolio. These concentrations include fixed maturity AFS, trading and equity securities.
6. Derivative Instruments
We maintain an overall risk management strategy that incorporates the use of derivative instruments to minimize significant unplanned fluctuations in earnings that are caused by interest rate risk, foreign currency exchange risk, equity market risk, basis risk and credit risk. We assess these risks by continually identifying and monitoring changes in our exposures that may adversely affect expected future cash flows and by evaluating hedging opportunities.
Derivative activities are monitored by various management committees. The committees are responsible for overseeing the implementation of various hedging strategies that are developed through the analysis of financial simulation models and other internal and industry sources. The resulting hedging strategies are incorporated into our overall risk management strategies.
34
See Note 1 for a detailed discussion of the accounting treatment for derivative instruments. See Note 20 for additional disclosures related to the fair value of our derivative instruments and Note 4 for derivative instruments related to our consolidated VIEs.
Interest Rate Contracts
We use derivative instruments as part of our interest rate risk management strategy. These instruments are economic hedges unless otherwise noted and include:
Forward-Starting Interest Rate Swaps
We use forward-starting interest rate swaps designated and qualifying as cash flow hedges to hedge our exposure to interest rate fluctuations related to the forecasted purchases of certain assets.
We also use forward-starting interest rate swaps to hedge the interest rate exposure within our life products related to the forecasted purchases of certain assets.
Interest Rate Cap Corridors
We use interest rate cap corridors to provide a level of protection from the effect of rising interest rates for certain life insurance products and annuity contracts. Interest rate cap corridors involve purchasing an interest rate cap at a specific cap rate and selling an interest rate cap with a higher cap rate. For each corridor, the amount of quarterly payments, if any, is determined by the rate at which the underlying index rate resets above the original capped rate. The corridor limits the benefit the purchaser can receive as the related interest rate index rises above the higher capped rate. There is no additional liability to us other than the purchase price associated with the interest rate cap corridor.
Interest Rate Futures
We use interest rate futures contracts to hedge the liability exposure on certain options in variable annuity products. These futures contracts require payment between our counterparty and us on a daily basis for changes in the futures index price.
Interest Rate Swap Agreements
We use interest rate swap agreements to hedge the liability exposure on certain options in variable annuity products.
We also use interest rate swap agreements designated and qualifying as cash flow hedges to hedge the interest rate risk of floating-rate bond coupon payments by replicating a fixed-rate bond.
Finally, we use interest rate swap agreements designated and qualifying as fair value hedges to hedge against changes in the fair value of certain fixed maturity securities due to interest rate risks.
Reverse Treasury Locks
We use reverse treasury locks designated and qualifying as cash flow hedges to hedge the interest rate exposure related to the anticipated purchase of fixed-rate securities. These derivatives are primarily structured to hedge interest rate risk inherent in the assumptions used to price certain liabilities.
Foreign Currency Contracts
We use derivative instruments as part of our foreign currency risk management strategy. These instruments are economic hedges unless otherwise noted and include:
Currency Futures
We use currency futures to hedge foreign exchange risk associated with certain options in variable annuity products. Currency futures exchange one currency for another at a specified date in the future at a specified exchange rate.
Foreign Currency Swaps
We use foreign currency swaps designated and qualifying as cash flow hedges, to hedge foreign exchange risk of investments in fixed maturity securities denominated in foreign currencies. A foreign currency swap is a contractual agreement to exchange one currency for another at specified dates in the future at a specified exchange rate.
35
Equity Market Contracts
We use derivative instruments as part of our equity market risk management strategy that are economic hedges and include:
Call Options Based on the S&P 500
Our indexed annuity and IUL contracts permit the holder to elect an interest rate return or an equity market component, where interest credited to the contracts is linked to the performance of the S&P 500. Contract holders may elect to rebalance index options at renewal dates, either annually or biannually. As of each renewal date, we have the opportunity to re-price the indexed component by establishing participation rates, caps, spreads and specified rates, subject to contractual guarantees. We purchase call options that are highly correlated to the portfolio allocation decisions of our contract holders, such that we are economically hedged with respect to equity returns for the current reset period.
Consumer Price Index Swaps
We use consumer price index swaps to hedge the liability exposure on certain options in fixed annuity products. Consumer price index swaps are contracts entered into at no cost and whose payoff is the difference between the consumer price index inflation rate and the fixed-rate determined as of inception.
Equity Futures
We use equity futures contracts to hedge the liability exposure on certain options in variable annuity products. These futures contracts require payment between our counterparty and us on a daily basis for changes in the futures index price.
Put Options
We use put options to hedge the liability exposure on certain options in variable annuity products. Put options are contracts that require counterparties to pay us at a specified future date the amount, if any, by which a specified equity index is less than the strike rate stated in the agreement, applied to a notional amount.
Total Return Swaps
We use total return swaps to hedge the liability exposure on certain options in variable annuity products.
In addition, we use total return swaps to hedge a portion of the liability related to our deferred compensation plans. We receive the total return on a portfolio of indexes and pay a floating-rate of interest.
Variance Swaps
We use variance swaps to hedge the liability exposure on certain options in variable annuity products. Variance swaps are contracts entered into at no cost whose payoff is the difference between the realized variance rate of an underlying index and the fixed variance rate determined as of inception of the contract.
Credit Contracts
We use derivative instruments as part of our credit risk management strategy that are economic hedges and include:
Credit Default Swaps – Buying Protection
We use credit default swaps to hedge the liability exposure on certain options in variable annuity products.
We buy credit default swaps to hedge against a drop in bond prices due to credit concerns of certain bond issuers. A credit default swap allows us to put the bond back to the counterparty at par upon a default event by the bond issuer. A default event is defined as bankruptcy, failure to pay, obligation acceleration or restructuring.
Credit Default Swaps – Selling Protection
We use credit default swaps to hedge the liability exposure on certain options in variable annuity products.
We sell credit default swaps to offer credit protection to contract holders and investors. The credit default swaps hedge the contract holders and investors against a drop in bond prices due to credit concerns of certain bond issuers. A credit default swap allows the investor to put the bond back to us at par upon a default event by the bond issuer. A default event is defined as bankruptcy, failure to pay, obligation acceleration or restructuring.
36
Embedded Derivatives
We have embedded derivatives that include:
GLB Reserves Embedded Derivatives
We are exposed to risk and income statement volatility caused by changes in the equity markets, interest rates and volatility associated with GLBs offered in our variable annuity products, including products with GWB and GIB features. These GLB features are reinsured among various reinsurance counterparties on either a Modco or coinsurance basis. We cede a portion of the GLB features to LNBAR on a funds withheld modified coinsurance basis. The funds withheld arrangement includes a dynamic hedging strategy designed to mitigate selected risks. Changes in the value of the hedge contracts due to changes in equity markets, interest rates and implied volatilities hedge the changes in embedded derivative GLB reserves assumed by LNBAR caused by those same factors. The hedge positions are rebalanced based upon changes in these factors as needed. While we actively manage the hedge positions, these hedge positions may not be totally effective in offsetting changes in the embedded derivative reserve assumed by LNBAR due to, among other things, differences in timing between when a market exposure changes and corresponding changes to the hedge positions, extreme swings in the equity markets and interest rates, market volatility, contract holder behavior, divergence between the performance of the underlying funds and the hedging indices, divergence between the actual and expected performance of the hedge instruments and our ability to purchase hedging instruments at prices consistent with the desired risk and return trade-off. However, the hedging results do not impact LNL due to a funds withheld agreement with LNBAR, which causes the financial impact of the derivatives, as well as the cash flow activity, to be reflected on LNBAR.
Certain features of these guarantees have elements of both insurance benefits accounted for under the Financial Services – Insurance – Claim Costs and Liabilities for Future Policy Benefits Subtopic of the FASB ASC (“benefit reserves”) and embedded derivatives accounted for under the Derivatives and Hedging and the Fair Value Measurements and Disclosures Topics of the FASB ASC (“embedded derivative reserves”). We calculate the value of the benefit reserves and the embedded derivative reserves based on the specific characteristics of each GLB feature.
Indexed Annuity and IUL Contracts Embedded Derivatives
Our indexed annuity and IUL contracts permit the holder to elect an interest rate return or an equity market component, where interest credited to the contracts is linked to the performance of the S&P 500. Contract holders may elect to rebalance index options at renewal dates, either annually or biannually. As of each renewal date, we have the opportunity to re-price the indexed component by establishing participation rates, caps, spreads and specified rates, subject to contractual guarantees. We purchase S&P 500 call options that are highly correlated to the portfolio allocation decisions of our contract holders, such that we are economically hedged with respect to equity returns for the current reset period.
Reinsurance Related Embedded Derivatives
We have certain Modco arrangements and coinsurance with funds withheld reinsurance arrangements with embedded derivatives related to the withheld assets of the related funds. These derivatives are considered total return swaps with contractual returns that are attributable to various assets and liabilities associated with these reinsurance arrangements.
37
We have derivative instruments with off-balance-sheet risks whose notional or contract amounts exceed the related credit exposure. Outstanding derivative instruments with off-balance-sheet risks (in millions) were as follows:
|
|
||||||||||||||||||
|
|
||||||||||||||||||
|
|
As of December 31, 2018 |
As of December 31, 2017 |
||||||||||||||||
|
|
Notional |
Fair Value |
Notional |
Fair Value |
||||||||||||||
|
|
Amounts |
Asset |
Liability |
Amounts |
Asset |
Liability |
||||||||||||
|
Qualifying Hedges |
||||||||||||||||||
|
Cash flow hedges: |
||||||||||||||||||
|
Interest rate contracts (1) |
$ |
1,528 |
$ |
33 |
$ |
9 |
$ |
1,544 |
$ |
45 |
$ |
16 | ||||||
|
Foreign currency contracts (1) |
2,326 | 167 | 39 | 1,804 | 79 | 79 | ||||||||||||
|
Total cash flow hedges |
3,854 | 200 | 48 | 3,348 | 124 | 95 | ||||||||||||
|
Fair value hedges: |
||||||||||||||||||
|
Interest rate contracts (1) |
553 |
- |
137 | 563 |
- |
174 | ||||||||||||
|
Non-Qualifying Hedges |
||||||||||||||||||
|
Interest rate contracts (1) |
100,628 | 464 | 138 | 72,937 | 657 | 127 | ||||||||||||
|
Foreign currency contracts (1) |
47 |
- |
- |
22 |
- |
- |
||||||||||||
|
Equity market contracts (1) |
30,273 | 676 | 162 | 30,918 | 562 | 557 | ||||||||||||
|
Credit contracts (1) |
- |
- |
- |
52 |
- |
- |
||||||||||||
|
Embedded derivatives: |
||||||||||||||||||
|
GLB direct (2) |
- |
123 |
- |
- |
903 |
- |
||||||||||||
|
GLB ceded (2) (3) |
- |
72 | 196 |
- |
51 | 954 | ||||||||||||
|
Reinsurance related (4) |
- |
188 |
- |
- |
- |
51 | ||||||||||||
|
Indexed annuity and IUL contracts (2) (5) |
- |
902 | 1,305 |
- |
11 | 1,418 | ||||||||||||
|
Total derivative instruments |
$ |
135,355 |
$ |
2,625 |
$ |
1,986 |
$ |
107,840 |
$ |
2,308 |
$ |
3,376 | ||||||
|
(1) |
Reported in derivative investments and other liabilities on our Consolidated Balance Sheets. |
|
(2) |
Reported in other assets on our Consolidated Balance Sheets. |
|
(3) |
Reported in other liabilities on our Consolidated Balance Sheets. |
|
(4) |
Reported in reinsurance related embedded derivatives on our Consolidated Balance Sheets. |
|
(5) |
Reported in future contract benefits on our Consolidated Balance Sheets. |
Beginning in the first quarter 2017, consistent with changes enacted by the Chicago Mercantile Exchange (“CME”), the Company offset the variation margin payments with the derivative balances that are cleared through CME.
The maturity of the notional amounts of derivative instruments (in millions) was as follows:
|
|
||||||||||||||||||
|
|
||||||||||||||||||
|
|
Remaining Life as of December 31, 2018 |
|||||||||||||||||
|
|
Less Than |
1 – 5 |
6 – 10 |
11 – 30 |
Over 30 |
|||||||||||||
|
|
1 Year |
Years |
Years |
Years |
Years |
Total |
||||||||||||
|
Interest rate contracts (1) |
$ |
12,968 |
$ |
16,828 |
$ |
49,713 |
$ |
23,000 |
$ |
200 |
$ |
102,709 | ||||||
|
Foreign currency contracts (2) |
102 | 268 | 728 | 1,166 | 109 | 2,373 | ||||||||||||
|
Equity market contracts |
20,876 | 5,011 | 1,236 | 14 | 3,136 | 30,273 | ||||||||||||
|
Total derivative instruments |
||||||||||||||||||
|
with notional amounts |
$ |
33,946 |
$ |
22,107 |
$ |
51,677 |
$ |
24,180 |
$ |
3,445 |
$ |
135,355 | ||||||
|
(1) |
As of December 31, 2018, the latest maturity date for which we were hedging our exposure to the variability in future cash flows for these instruments was March 2027. |
|
(2) |
As of December 31, 2018, the latest maturity date for which we were hedging our exposure to the variability in future cash flows for these instruments was September 2049. |
38
The change in our unrealized gain (loss) on derivative instruments in AOCI (in millions) was as follows:
|
|
|||||||||
|
|
For the Years Ended December 31, |
||||||||
|
|
2018 |
2017 |
2016 |
||||||
|
Unrealized Gain (Loss) on Derivative Instruments |
|||||||||
|
Balance as of beginning-of-year |
$ |
27 |
$ |
93 |
$ |
157 | |||
|
Other comprehensive income (loss): |
|||||||||
|
Unrealized holding gains (losses) arising during the period: |
|||||||||
|
Cumulative effect from adoption of |
|||||||||
|
new accounting standard |
6 |
- |
- |
||||||
|
Cash flow hedges: |
|||||||||
|
Interest rate contracts |
(4 |
) |
43 | (165 |
) |
||||
|
Foreign currency contracts |
44 | 20 | (10 |
) |
|||||
|
Change in foreign currency exchange rate adjustment |
111 | (137 |
) |
96 | |||||
|
Change in DAC, VOBA, DSI and DFEL |
(14 |
) |
1 | 2 | |||||
|
Income tax benefit (expense) |
(29 |
) |
26 | 27 | |||||
|
Less: |
|||||||||
|
Reclassification adjustment for gains (losses) |
|||||||||
|
included in net income (loss): |
|||||||||
|
Cash flow hedges: |
|||||||||
|
Interest rate contracts (1) |
4 | 4 | 5 | ||||||
|
Interest rate contracts (2) |
- |
- |
1 | ||||||
|
Foreign currency contracts (1) |
27 | 18 | 11 | ||||||
|
Foreign currency contracts (2) |
- |
9 | 7 | ||||||
|
Associated amortization of DAC, VOBA, DSI and DFEL |
(3 |
) |
(2 |
) |
(2 |
) |
|||
|
Income tax benefit (expense) |
(6 |
) |
(10 |
) |
(8 |
) |
|||
|
Balance as of end-of-year |
$ |
119 |
$ |
27 |
$ |
93 | |||
|
(1) |
The OCI offset is reported within net investment income on our Consolidated Statements of Comprehensive Income (Loss). |
|
(2) |
The OCI offset is reported within realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss). |
39
The gains (losses) on derivative instruments (in millions) recorded within income (loss) from continuing operations on our Consolidated Statements of Comprehensive Income (Loss) were as follows:
|
|
||||||||||
|
|
For the Years Ended December 31, |
|||||||||
|
|
2018 |
2017 |
2016 |
|||||||
|
Qualifying Hedges |
||||||||||
|
Cash flow hedges: |
||||||||||
|
Interest rate contracts (1) |
$ |
4 |
$ |
4 |
$ |
5 | ||||
|
Interest rate contracts (2) |
- |
- |
1 | |||||||
|
Foreign currency contracts (1) |
27 | 18 | 11 | |||||||
|
Foreign currency contracts (2) |
- |
9 | 7 | |||||||
|
Total cash flow hedges |
31 | 31 | 24 | |||||||
|
Fair value hedges: |
||||||||||
|
Interest rate contracts (1) |
(14 |
) |
(23 |
) |
(28 |
) |
||||
|
Interest rate contracts (2) |
37 | 7 | 16 | |||||||
|
Total fair value hedges |
23 | (16 |
) |
(12 |
) |
|||||
|
Non-Qualifying Hedges |
||||||||||
|
Interest rate contracts (2) |
(149 |
) |
103 | 181 | ||||||
|
Foreign currency contracts (2) |
5 |
- |
(14 |
) |
||||||
|
Equity market contracts (2) |
445 | (1,427 |
) |
(1,253 |
) |
|||||
|
Equity market contracts (3) |
(17 |
) |
28 | 12 | ||||||
|
Credit contracts (3) |
- |
1 | (5 |
) |
||||||
|
Embedded derivatives: |
||||||||||
|
GLB(2) |
(1 |
) |
- |
- |
||||||
|
Reinsurance related (2) |
292 | (141 |
) |
(57 |
) |
|||||
|
Indexed annuity and IUL contracts (2) |
81 | (400 |
) |
(120 |
) |
|||||
|
Total derivative instruments |
$ |
710 |
$ |
(1,821 |
) |
$ |
(1,244 |
) |
||
|
(1) |
Reported in net investment income on our Consolidated Statements of Comprehensive Income (Loss). |
|
(2) |
Reported in realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss). |
|
(3) |
Reported in commissions and other expenses on our Consolidated Statements of Comprehensive Income (Loss). |
Gains (losses) recognized as a component of OCI (in millions) on derivative instruments designated and qualifying as cash flow hedges were as follows:
|
|
||||||||||
|
|
For the Years Ended December 31, |
|||||||||
|
|
2018 |
2017 |
2016 |
|||||||
|
Offset to net investment income |
$ |
4 | 22 | 16 | ||||||
|
Offset to realized gain (loss) |
27 | 9 | 8 | |||||||
|
|
||||||||||
As of December 31, 2018, $38 million of the deferred net gains (losses) on derivative instruments in AOCI were expected to be reclassified to earnings during the next 12 months. This reclassification would be due primarily to interest rate variances related to our interest rate swap agreements.
For the years ended December 31, 2018 and 2017, there were no material reclassifications to earnings due to hedged firm commitments no longer deemed probable or due to hedged forecasted transactions that had not occurred by the end of the originally specified time period.
As of December 31, 2018, we did not have any exposure related to credit default swaps for which we are the seller.
40
As of December 31, 2017, information related to our credit default swaps for which we are the seller (dollars in millions) was as follows:
|
|
|||||||||||||||||
|
|
|||||||||||||||||
|
|
Credit |
||||||||||||||||
|
|
Reason |
Nature |
Rating of |
Number |
Maximum |
||||||||||||
|
|
for |
of |
Underlying |
of |
Fair |
Potential |
|||||||||||
|
Credit Contract Type |
Maturity |
Entering |
Recourse |
Obligation (1) |
Instruments |
Value (2) |
Payout |
||||||||||
|
Basket credit default swaps |
12/20/2022 |
(3) |
(4) |
BBB+ |
1 |
$ |
1 |
$ |
52 | ||||||||
|
(1) |
Represents average credit ratings based on the midpoint of the applicable ratings among Moody’s, S&P and Fitch Ratings, as scaled to the corresponding S&P ratings. |
|
(2) |
Broker quotes are used to determine the market value of our credit default swaps. |
|
(3) |
Credit default swaps were entered into in order to hedge the liability exposure on certain variable annuity products. |
|
(4) |
Sellers do not have the right to demand indemnification or compensation from third parties in case of a loss (payment) on the contract. |
Details underlying the associated collateral of our credit default swaps for which we are the seller if credit risk-related contingent features were triggered (in millions) were as follows:
|
|
|||||||||
|
|
As of |
As of |
|||||||
|
|
December 31, |
December 31, |
|||||||
|
|
2018 |
2017 |
|||||||
|
Maximum potential payout |
$ |
- |
$ |
52 | |||||
|
Less: Counterparty thresholds |
- |
- |
|||||||
|
Maximum collateral potentially required to post |
$ |
- |
$ |
52 | |||||
Certain of our credit default swap agreements contain contractual provisions that allow for the netting of collateral with our counterparties related to all of our collateralized financing transactions that we have outstanding. If these netting agreements were not in place, we would have been required to post collateral if the market value was less than zero.
Credit Risk
We are exposed to credit losses in the event of non-performance by our counterparties on various derivative contracts and reflect assumptions regarding the credit or NPR. The NPR is based upon assumptions for each counterparty’s credit spread over the estimated weighted average life of the counterparty exposure, less collateral held. As of December 31, 2018, the NPR adjustment was less than $1 million. The credit risk associated with such agreements is minimized by entering into agreements with financial institutions with long-standing, superior performance records. Additionally, we maintain a policy of requiring derivative contracts to be governed by an International Swaps and Derivatives Association (“ISDA”) Master Agreement. We are required to maintain minimum ratings as a matter of routine practice in negotiating ISDA agreements. Under some ISDA agreements, we and LLANY have agreed to maintain certain financial strength or claims-paying ratings. A downgrade below these levels could result in termination of derivative contracts, at which time any amounts payable by us would be dependent on the market value of the underlying derivative contracts. In certain transactions, we and the counterparty have entered into a credit support annex requiring either party to post collateral when net exposures exceed pre-determined thresholds. These thresholds vary by counterparty and credit rating. The amount of such exposure is essentially the net replacement cost or market value less collateral held for such agreements with each counterparty if the net market value is in our favor. We did not have any exposure as of December 31, 2018 or 2017.
41
The amounts recognized (in millions) by S&P credit rating of counterparty, for which we had the right to reclaim cash collateral or were obligated to return cash collateral, were as follows:
|
|
|||||||||||||
|
|
As of December 31, 2018 |
As of December 31, 2017 |
|||||||||||
|
|
Collateral |
Collateral |
Collateral |
Collateral |
|||||||||
|
|
Posted by |
Posted by |
Posted by |
Posted by |
|||||||||
|
S&P |
Counter- |
LNL |
Counter- |
LNL |
|||||||||
|
Credit |
Party |
(Held by |
Party |
(Held by |
|||||||||
|
Rating of |
(Held by |
Counter- |
(Held by |
Counter- |
|||||||||
|
Counterparty |
LNL) |
Party) |
LNL) |
Party) |
|||||||||
|
|
|||||||||||||
|
AA- |
$ |
33 |
$ |
(4 |
) |
$ |
116 |
$ |
(1 |
) |
|||
|
A+ |
296 | (26 |
) |
178 | (453 |
) |
|||||||
|
A |
106 | (36 |
) |
170 | (48 |
) |
|||||||
|
A- |
4 |
- |
237 |
- |
|||||||||
|
BBB+ |
177 |
- |
- |
(4 |
) |
||||||||
|
|
$ |
616 |
$ |
(66 |
) |
$ |
701 |
$ |
(506 |
) |
|||
Balance Sheet Offsetting
Information related to the effects of offsetting on our Consolidated Balance Sheets (in millions) was as follows:
|
|
||||||||||||
|
|
As of December 31, 2018 |
|||||||||||
|
|
Embedded |
|||||||||||
|
|
Derivative |
Derivative |
||||||||||
|
|
Instruments |
Instruments |
Total |
|||||||||
|
|
||||||||||||
|
Financial Assets |
||||||||||||
|
Gross amount of recognized assets |
$ |
1,282 |
$ |
1,285 |
$ |
2,567 | ||||||
|
Gross amounts offset |
(201 |
) |
- |
(201 |
) |
|||||||
|
Net amount of assets |
1,081 | 1,285 | 2,366 | |||||||||
|
Gross amounts not offset: |
||||||||||||
|
Cash collateral |
(616 |
) |
- |
(616 |
) |
|||||||
|
Non-cash collateral |
(58 |
) |
- |
(58 |
) |
|||||||
|
Net amount |
$ |
407 |
$ |
1,285 |
$ |
1,692 | ||||||
|
|
||||||||||||
|
Financial Liabilities |
||||||||||||
|
Gross amount of recognized liabilities |
$ |
806 |
$ |
1,501 |
$ |
2,307 | ||||||
|
Gross amounts offset |
(59 |
) |
- |
(59 |
) |
|||||||
|
Net amount of liabilities |
747 | 1,501 | 2,248 | |||||||||
|
Gross amounts not offset: |
||||||||||||
|
Cash collateral |
(66 |
) |
- |
(66 |
) |
|||||||
|
Non-cash collateral |
(190 |
) |
- |
(190 |
) |
|||||||
|
Net amount |
$ |
491 |
$ |
1,501 |
$ |
1,992 | ||||||
42
|
|
||||||||||||
|
|
As of December 31, 2017 |
|||||||||||
|
|
Embedded |
|||||||||||
|
|
Derivative |
Derivative |
||||||||||
|
|
Instruments |
Instruments |
Total |
|||||||||
|
|
||||||||||||
|
Financial Assets |
||||||||||||
|
Gross amount of recognized assets |
$ |
1,082 |
$ |
965 |
$ |
2,047 | ||||||
|
Gross amounts offset |
(237 |
) |
- |
(237 |
) |
|||||||
|
Net amount of assets |
845 | 965 | 1,810 | |||||||||
|
Gross amounts not offset: |
||||||||||||
|
Cash collateral |
(701 |
) |
- |
(701 |
) |
|||||||
|
Net amount |
$ |
144 |
$ |
965 |
$ |
1,109 | ||||||
|
|
||||||||||||
|
Financial Liabilities |
||||||||||||
|
Gross amount of recognized liabilities |
$ |
1,037 |
$ |
2,423 |
$ |
3,460 | ||||||
|
Gross amounts offset |
(261 |
) |
- |
(261 |
) |
|||||||
|
Net amount of liabilities |
776 | 2,423 | 3,199 | |||||||||
|
Gross amounts not offset: |
||||||||||||
|
Cash collateral |
(506 |
) |
- |
(506 |
) |
|||||||
|
Net amount |
$ |
270 |
$ |
2,423 |
$ |
2,693 | ||||||
7. Federal Income Taxes
The federal income tax expense (benefit) on continuing operations (in millions) was as follows:
|
|
|||||||||
|
|
|||||||||
|
|
For the Years Ended December 31, |
||||||||
|
|
2018 |
2017 |
2016 |
||||||
|
Current |
$ |
179 |
$ |
118 |
$ |
25 | |||
|
Deferred |
78 | (1,405 |
) |
242 | |||||
|
Federal income tax expense (benefit) |
$ |
257 |
$ |
(1,287 |
) |
$ |
267 | ||
A reconciliation of the effective tax rate differences (in millions) was as follows:
|
|
|||||||||
|
|
For the Years Ended December 31, |
||||||||
|
|
2018 |
2017 |
2016 |
||||||
|
Tax rate times pre-tax income |
$ |
384 |
$ |
256 |
$ |
504 | |||
|
Effect of: |
|||||||||
|
Tax-preferred investment income |
(87 |
) |
(280 |
) |
(196 |
) |
|||
|
Tax credits |
(39 |
) |
(29 |
) |
(28 |
) |
|||
|
Change in uncertain tax positions |
1 | (17 |
) |
(11 |
) |
||||
|
Excess tax benefits from share-based |
|||||||||
|
compensation |
(3 |
) |
(8 |
) |
(4 |
) |
|||
|
Goodwill impairment |
- |
316 |
- |
||||||
|
Deferred tax impact from the Tax Cuts |
|||||||||
|
and Jobs Act |
3 | (1,526 |
) |
- |
|||||
|
Other items |
(2 |
) |
1 | 2 | |||||
|
Federal income tax expense (benefit) |
$ |
257 |
$ |
(1,287 |
) |
$ |
267 | ||
|
Effective tax rate |
14% |
-176% |
19% | ||||||
The effective tax rate is the ratio of tax expense (benefit) over pre-tax income (loss). Tax-preferred investment income as reflected above relates primarily to the separate account dividends-received deduction, which generated a total tax benefit of $84 million, $264 million and $175 million for the years ended December 31, 2018, 2017 and 2016, respectively. As a result of the Tax Act, the recorded tax benefit for the separate account dividends-received deduction was substantially less in our 2018 income tax provision as compared to prior years.
As a result of the enactment of the Tax Act on December 22, 2017, we remeasured our existing deferred tax balances at the 21% marginal corporate income tax rate and recognized a $1.5 billion tax benefit in 2017. The SEC previously issued rules that allow for a one-year measurement period after the enactment of the Tax Act to finalize calculations and recording of the related tax impacts. Subsequent to the enactment date, we completed our review of the provisions of the Tax Act, including the impact of the reduction in the U.S. federal corporate income tax rate and the impact of specific life insurance provisions on our financial statements.
43
We file with a consolidated group; however, we calculate our tax expense (benefit) on a separate company basis.
The federal income tax asset (liability) (in millions) was as follows:
|
|
||||||
|
|
As of December 31, |
|||||
|
|
2018 |
2017 |
||||
|
Current |
$ |
205 |
$ |
206 | ||
|
Deferred |
(1,421 |
) |
(2,391 |
) |
||
|
Total federal income tax asset (liability) |
$ |
(1,216 |
) |
$ |
(2,185 |
) |
Significant components of our deferred tax assets and liabilities (in millions) were as follows:
|
|
||||||
|
|
As of December 31, |
|||||
|
|
2018 |
2017 |
||||
|
Deferred Tax Assets |
||||||
|
Future contract benefits and other contract holder funds |
$ |
549 |
$ |
580 | ||
|
Reinsurance related embedded derivative liability |
- |
11 | ||||
|
Compensation and benefit plans |
120 | 123 | ||||
|
Intangibles |
40 |
- |
||||
|
Tax credits |
- |
76 | ||||
|
Net operating losses |
264 |
- |
||||
|
Other |
59 | 8 | ||||
|
Total deferred tax assets |
$ |
1,032 |
$ |
798 | ||
|
Deferred Tax Liabilities |
||||||
|
DAC |
$ |
1,380 |
$ |
1,112 | ||
|
VOBA |
302 | 105 | ||||
|
Net unrealized gain on AFS securities |
333 | 1,579 | ||||
|
Net unrealized gain on trading securities |
25 | 39 | ||||
|
Intangibles |
- |
9 | ||||
|
Investment activity |
334 | 118 | ||||
|
Reinsurance related embedded derivative asset |
39 |
- |
||||
|
Deferred gain on business sold through reinsurance |
34 | 35 | ||||
|
Other |
6 | 192 | ||||
|
Total deferred tax liabilities |
$ |
2,453 |
$ |
3,189 | ||
|
Net deferred tax asset (liability) |
$ |
(1,421 |
) |
$ |
(2,391 |
) |
As of December 31, 2018, we had no remaining deferred tax assets related to tax credits; however, we have $1.3 billion of net operating losses to carry forward to future years. Although realization is not assured, management believes that it is more likely than not that we will realize the benefits of our deferred tax assets, and, accordingly, no valuation allowance has been recorded.
As of December 31, 2018 and 2017, $12 million and $11 million, respectively, of our unrecognized tax benefits presented below, if recognized, would have affected our federal income tax expense (benefit) and our effective tax rate. We are not aware of any events for which it is likely that unrecognized tax benefits will significantly increase or decrease within the next year. A reconciliation of the unrecognized tax benefits (in millions) was as follows:
|
|
||||||
|
|
For the Years Ended |
|||||
|
|
December 31, |
|||||
|
|
2018 |
2017 |
||||
|
Balance as of beginning-of-year |
$ |
11 |
$ |
1 | ||
|
Increases for prior year tax positions |
- |
9 | ||||
|
Increases for current year tax positions |
1 | 1 | ||||
|
Balance as of end-of-year |
$ |
12 |
$ |
11 | ||
We recognize interest and penalties accrued, if any, related to unrecognized tax benefits as a component of tax expense. For the years ended December 31, 2018, 2017 and 2016, we recognized interest and penalty expense (benefit) related to uncertain tax positions of zero, zero and $(2) million, respectively. There was no accrued interest and penalty expense related to the unrecognized tax benefits as of December 31, 2018 and 2017.
We are subject to examination by U.S. federal, state, local and non-U.S. income authorities. We are currently not under examination by the Internal Revenue Service; however, tax years 2015 and forward remain open under the applicable statute of limitations. We are
44
currently under examination by several state and local taxing jurisdictions; however, we do not expect these examinations will materially impact our results.
8. DAC, VOBA, DSI and DFEL
Changes in DAC (in millions) were as follows:
|
|
|||||||||
|
|
For the Years Ended December 31, |
||||||||
|
|
2018 |
2017 |
2016 |
||||||
|
Balance as of beginning-of-year |
$ |
7,909 |
$ |
8,269 |
$ |
8,620 | |||
|
Business acquired (sold) through reinsurance |
(246 |
) |
- |
- |
|||||
|
Deferrals |
1,596 | 1,345 | 1,339 | ||||||
|
Amortization, net of interest: |
|||||||||
|
Amortization, excluding unlocking, net of interest |
(913 |
) |
(922 |
) |
(879 |
) |
|||
|
Unlocking |
(115 |
) |
61 | (276 |
) |
||||
|
Adjustment related to realized gains (losses) |
(42 |
) |
(55 |
) |
(51 |
) |
|||
|
Adjustment related to unrealized gains (losses) |
1,320 | (789 |
) |
(484 |
) |
||||
|
Balance as of end-of-year |
$ |
9,509 |
$ |
7,909 |
$ |
8,269 | |||
Changes in VOBA (in millions) were as follows:
|
|
|||||||||
|
|
For the Years Ended December 31, |
||||||||
|
|
2018 |
2017 |
2016 |
||||||
|
Balance as of beginning-of-year |
$ |
499 |
$ |
874 |
$ |
873 | |||
|
Business acquired (sold) through reinsurance |
(11 |
) |
- |
- |
|||||
|
Business acquired |
30 |
- |
- |
||||||
|
Deferrals |
7 | 7 | 3 | ||||||
|
Amortization: |
|||||||||
|
Amortization, excluding unlocking |
(127 |
) |
(105 |
) |
(105 |
) |
|||
|
Unlocking |
(60 |
) |
(48 |
) |
36 | ||||
|
Accretion of interest (1) |
48 | 52 | 52 | ||||||
|
Adjustment related to realized gains (losses) |
(2 |
) |
(1 |
) |
(2 |
) |
|||
|
Adjustment related to unrealized gains (losses) |
415 | (280 |
) |
17 | |||||
|
Balance as of end-of-year |
$ |
799 |
$ |
499 |
$ |
874 | |||
|
(1) |
The interest accrual rates utilized to calculate the accretion of interest ranged from 4.2% to 6.9%. |
Estimated future amortization of VOBA, net of interest (in millions), as of December 31, 2018, was as follows:
|
|
|||
|
2019 |
$ |
81 | |
|
2020 |
77 | ||
|
2021 |
73 | ||
|
2022 |
67 | ||
|
2023 |
64 |
45
Changes in DSI (in millions) were as follows:
|
|
|||||||||
|
|
For the Years Ended December 31, |
||||||||
|
|
2018 |
2017 |
2016 |
||||||
|
Balance as of beginning-of-year |
$ |
287 |
$ |
293 |
$ |
301 | |||
|
Business acquired (sold) through reinsurance |
(21 |
) |
- |
- |
|||||
|
Deferrals |
48 | 29 | 25 | ||||||
|
Amortization, net of interest: |
|||||||||
|
Amortization, excluding unlocking, net of interest |
(28 |
) |
(30 |
) |
(28 |
) |
|||
|
Unlocking |
- |
(4 |
) |
(2 |
) |
||||
|
Adjustment related to realized gains (losses) |
(1 |
) |
(2 |
) |
(2 |
) |
|||
|
Adjustment related to unrealized gains (losses) |
13 | 1 | (1 |
) |
|||||
|
Balance as of end-of-year |
$ |
298 |
$ |
287 |
$ |
293 | |||
Changes in DFEL (in millions) were as follows:
|
|
|||||||||
|
|
For the Years Ended December 31, |
||||||||
|
|
2018 |
2017 |
2016 |
||||||
|
Balance as of beginning-of-year |
$ |
1,429 |
$ |
1,855 |
$ |
1,923 | |||
|
Deferrals |
874 | 753 | 628 | ||||||
|
Amortization, net of interest: |
|||||||||
|
Amortization, excluding unlocking, net of interest |
(474 |
) |
(383 |
) |
(345 |
) |
|||
|
Unlocking |
(52 |
) |
(3 |
) |
(63 |
) |
|||
|
Adjustment related to realized (gains) losses |
(19 |
) |
(18 |
) |
(11 |
) |
|||
|
Adjustment related to unrealized (gains) losses |
1,005 | (775 |
) |
(277 |
) |
||||
|
Balance as of end-of-year |
$ |
2,763 |
$ |
1,429 |
$ |
1,855 | |||
9. Reinsurance
The following summarizes reinsurance amounts (in millions) recorded on our Consolidated Statements of Comprehensive Income (Loss), excluding amounts attributable to the indemnity reinsurance transaction with Swiss Re:
|
|
|||||||||
|
|
For the Years Ended December 31, |
||||||||
|
|
2018 |
2017 |
2016 |
||||||
|
Direct insurance premiums and fee income |
$ |
11,882 |
$ |
10,103 |
$ |
9,373 | |||
|
Reinsurance assumed |
96 | 101 | 105 | ||||||
|
Reinsurance ceded |
(1,883 |
) |
(1,817 |
) |
(1,728 |
) |
|||
|
Total insurance premiums and fee income |
$ |
10,095 |
$ |
8,387 |
$ |
7,750 | |||
|
|
|||||||||
|
Direct insurance benefits |
$ |
8,513 |
$ |
6,669 |
$ |
6,112 | |||
|
Reinsurance recoveries netted against benefits |
(2,369 |
) |
(1,851 |
) |
(1,865 |
) |
|||
|
Total benefits |
$ |
6,144 |
$ |
4,818 |
$ |
4,247 | |||
We and our insurance subsidiaries cede insurance to other companies. The portion of our life insurance and annuity risks exceeding our retention limit is reinsured with other insurers. We seek reinsurance coverage to limit our exposure to mortality losses and to enhance our capital management. As discussed in Note 24, a portion of this reinsurance activity is with affiliated companies.
As of December 31, 2018, the policy for our reinsurance program was to retain up to $20 million on a single insured life. As the amount we retain varies by policy, we reinsured approximately 25% of the mortality risk on newly issued life insurance contracts in 2018. Approximately 44% and 35% of our total individual life in-force amount was reinsured as of December 31, 2018 and 2017, respectively.
We focus on obtaining reinsurance from a diverse group of reinsurers, and we monitor concentration as well as financial strength ratings of our reinsurers. We regularly evaluate the financial condition of our reinsurers and monitor concentrations of credit risk related to reinsurance activities. Our amounts recoverable from reinsurers represent receivables from and reserves ceded to reinsurers and LNBAR. The amounts recoverable from reinsurers were $19.8 billion and $6.5 billion as of December 31, 2018 and 2017, respectively.
As disclosed in Note 3, Protective represents our largest reinsurance exposure following the sale of the Liberty Life Business that resulted in amounts recoverable from Protective of $12.1 billion as of December 31, 2018. Protective has funded trusts, of which the balance in the trusts changes as a result of ongoing reinsurance activity, to support the business ceded, which totaled $13.7 billion as of December 31, 2018.
46
Our reinsurance operations were acquired by Swiss Re in December 2001 through a series of indemnity reinsurance transactions. As such, Swiss Re reinsured certain liabilities and obligations under the indemnity reinsurance agreements. As we are not relieved of our liability to the ceding companies for this business, the liabilities and obligations associated with the reinsured policies remain on our Consolidated Balance Sheets with a corresponding reinsurance receivable from Swiss Re, which totaled $1.5 billion and $1.9 billion as of December 31, 2018 and 2017, respectively. Swiss Re has funded a trust, with a balance of $2.4 billion as of December 31, 2018, to support this business. In addition to various remedies that we would have in the event of a default by Swiss Re, we continue to hold assets in support of certain of the transferred reserves. These assets consist of those reported as trading securities and certain mortgage loans. Our liabilities for funds withheld and embedded derivatives as of December 31, 2018, included $177 million and $24 million, respectively, related to the business sold to Swiss Re. In addition, the amounts recoverable from LNBAR were $2.5 billion and $2.1 billion as of December 31, 2018 and 2017, respectively. LNBAR has funded trusts to support the business ceded of which the balance in the trusts changes as a result of ongoing reinsurance activity and totaled $1.9 billion as of December 31, 2018.
Portions of our deferred annuity business have been reinsured on either a coinsurance or a Modco basis with other companies to limit our exposure to interest rate risks. As of December 31, 2018 and 2017, the reserves associated with these reinsurance arrangements totaled $443 million and $541 million, respectively. In addition, effective October 1, 2018, we entered into a Modco agreement with Athene to reinsure fixed and fixed indexed annuity products, which resulted in a $7.5 billion deposit asset reflected within other assets on our Consolidated Balance Sheets as of December 31, 2018. The Modco account includes fixed maturity AFS securities, trading securities, commercial mortgage loans, derivative investments and cash that had carrying values of $6.5 billion, $559 million, $72 million, $60 million and $265 million, respectively, as of December 31, 2018. As described in Note 1, we recorded a deferred gain on business sold through reinsurance related to the transaction with Athene and amortized $8 million of the gain during 2018.
10. Goodwill and Specifically Identifiable Intangible Assets
The changes in the carrying amount of goodwill (in millions) by reportable segment were as follows:
|
|
|||||||||||||||||||||
|
|
For the Year Ended December 31, 2018 |
||||||||||||||||||||
|
|
Gross |
Accumulated |
|||||||||||||||||||
|
|
Goodwill |
Impairment |
Net |
||||||||||||||||||
|
|
as of |
as of |
Acquisition |
Goodwill |
|||||||||||||||||
|
|
Beginning- |
Beginning- |
Accounting |
as of End- |
|||||||||||||||||
|
|
of-Year |
of-Year |
Adjustments |
Impairment |
of-Year |
||||||||||||||||
|
Annuities |
$ |
1,040 |
$ |
(600 |
) |
$ |
- |
$ |
- |
$ |
440 | ||||||||||
|
Retirement Plan Services |
20 |
- |
- |
- |
20 | ||||||||||||||||
|
Life Insurance |
2,186 | (1,552 |
) |
- |
- |
634 | |||||||||||||||
|
Group Protection |
274 |
- |
414 |
- |
688 | ||||||||||||||||
|
Total goodwill |
$ |
3,520 |
$ |
(2,152 |
) |
$ |
414 |
$ |
- |
$ |
1,782 | ||||||||||
|
|
|||||||||||||||||||||
|
|
|||||||||||||||||||||
|
|
For the Year Ended December 31, 2017 |
||||||||||||||||||||
|
|
Gross |
Accumulated |
|||||||||||||||||||
|
|
Goodwill |
Impairment |
Net |
||||||||||||||||||
|
|
as of |
as of |
Acquisition |
Goodwill |
|||||||||||||||||
|
|
Beginning- |
Beginning- |
Accounting |
as of End- |
|||||||||||||||||
|
|
of-Year |
of-Year |
Adjustments |
Impairment |
of-Year |
||||||||||||||||
|
Annuities |
$ |
1,040 |
$ |
(600 |
) |
$ |
- |
$ |
- |
$ |
440 | ||||||||||
|
Retirement Plan Services |
20 |
- |
- |
- |
20 | ||||||||||||||||
|
Life Insurance |
2,186 | (647 |
) |
- |
(905 |
) |
634 | ||||||||||||||
|
Group Protection |
274 |
- |
- |
- |
274 | ||||||||||||||||
|
Total goodwill |
$ |
3,520 |
$ |
(1,247 |
) |
$ |
- |
$ |
(905 |
) |
$ |
1,368 | |||||||||
|
|
|||||||||||||||||||||
The fair values of our reporting units (Level 3 fair value estimates) are comprised of the value of in-force (i.e., existing) business and the value of new business. Specifically, new business is representative of cash flows and profitability associated with policies or contracts we expect to issue in the future, reflecting our forecasts of future sales volume and product mix over a 10-year period. To determine the values of in-force and new business, we use a discounted cash flows technique that applies a discount rate reflecting the market expected, weighted-average rate of return adjusted for the risk factors associated with operations to the projected future cash flows for each reporting unit.
As of October 1, 2018, we performed our annual quantitative goodwill impairment test for our reporting units, and the fair value was in excess of each reporting unit’s carrying value for Annuities, Retirement Plan Services, Life Insurance and Group Protection.
As of October 1, 2017, the date of our annual quantitative assessment of goodwill, our Annuities, Retirement Plan Services and Group Protection reporting units had fair values that exceeded the carrying value of each reporting unit. Our early adoption of ASU 2017-04,
47
“Simplifying the Test for Goodwill Impairment,” resulted in impairment of the Life Insurance reporting unit goodwill of $905 million during the fourth quarter of 2017 driven primarily from the impact of the December 22, 2017, enactment of the Tax Act that increased the carrying value of the Life Insurance reporting unit in excess of its fair value.
The gross carrying amounts and accumulated amortization (in millions) for each major specifically identifiable intangible asset class by reportable segment were as follows:
|
|
||||||||||||||||
|
|
As of December 31, 2018 |
As of December 31, 2017 |
||||||||||||||
|
|
Gross |
Gross |
||||||||||||||
|
|
Carrying |
Accumulated |
Carrying |
Accumulated |
||||||||||||
|
|
Amount |
Amortization |
Amount |
Amortization |
||||||||||||
|
Retirement Plan Services: |
||||||||||||||||
|
Mutual fund contract rights (1) |
$ |
5 |
$ |
- |
$ |
5 |
$ |
- |
||||||||
|
Life Insurance: |
||||||||||||||||
|
Sales force |
100 | 51 | 100 | 47 | ||||||||||||
|
Group Protection: |
||||||||||||||||
|
VOCRA |
576 | 5 |
- |
- |
||||||||||||
|
VODA |
31 |
- |
- |
- |
||||||||||||
|
Insurance licenses (1) |
3 |
- |
- |
- |
||||||||||||
|
Total |
$ |
715 |
$ |
56 |
$ |
105 |
$ |
47 | ||||||||
|
(1) |
No amortization recorded as the intangible asset has indefinite life. |
Future estimated amortization of specifically identifiable intangible assets (in millions) as of December 31, 2018, was as follows:
|
|
|||
|
2019 |
$ |
26 | |
|
2020 |
37 | ||
|
2021 |
37 | ||
|
2022 |
37 | ||
|
2023 |
37 | ||
|
Thereafter |
477 |
11. Guaranteed Benefit Features
Information on the GDB features outstanding (dollars in millions) was as follows:
|
|
||||||||
|
|
As of December 31, |
|||||||
|
|
2018 (1) |
2017 (1) |
||||||
|
Return of Net Deposits |
||||||||
|
Total account value |
$ |
89,783 |
$ |
96,941 | ||||
|
Net amount at risk (2) |
1,002 | 81 | ||||||
|
Average attained age of contract holders |
65 years |
64 years |
||||||
|
|
||||||||
|
Minimum Return |
||||||||
|
Total account value |
$ |
88 |
$ |
108 | ||||
|
Net amount at risk (2) |
18 | 18 | ||||||
|
Average attained age of contract holders |
77 years |
76 years |
||||||
|
Guaranteed minimum return |
5% | 5% | ||||||
|
|
||||||||
|
Anniversary Contract Value |
||||||||
|
Total account value |
$ |
23,365 |
$ |
26,596 | ||||
|
Net amount at risk (2) |
2,007 | 417 | ||||||
|
Average attained age of contract holders |
71 years |
70 years |
||||||
|
(1) |
Our variable contracts with guarantees may offer more than one type of guarantee in each contract; therefore, the amounts listed are not mutually exclusive. |
|
(2) |
Represents the amount of death benefit in excess of the account balance that is subject to market fluctuations. |
48
The determination of GDB liabilities is based on models that involve a range of scenarios and assumptions, including those regarding expected market rates of return and volatility, contract surrender rates and mortality experience. The following summarizes the balances of and changes in the liabilities for GDBs (in millions), which were recorded in future contract benefits on our Consolidated Balance Sheets:
|
|
||||||||||
|
|
For the Years Ended December 31, |
|||||||||
|
|
2018 |
2017 |
2016 |
|||||||
|
Balance as of beginning-of-year |
$ |
100 |
$ |
110 |
$ |
115 | ||||
|
Changes in reserves |
77 | 8 | 34 | |||||||
|
Benefits paid |
(16 |
) |
(18 |
) |
(39 |
) |
||||
|
Balance as of end-of-year |
$ |
161 |
$ |
100 |
$ |
110 | ||||
|
|
||||||||||
Variable Annuity Contracts
Account balances of variable annuity contracts, including those with guarantees, (in millions) were invested in separate account investment options as follows:
|
|
||||||||
|
|
As of December 31, |
|||||||
|
|
2018 |
2017 |
||||||
|
Asset Type |
||||||||
|
Domestic equity |
$ |
54,060 |
$ |
59,647 | ||||
|
International equity |
18,359 | 20,837 | ||||||
|
Fixed income |
37,942 | 40,626 | ||||||
|
Total |
$ |
110,361 |
$ |
121,110 | ||||
|
|
||||||||
|
Percent of total variable annuity separate account values |
99% | 99% | ||||||
Secondary Guarantee Products
Future contract benefits and other contract holder funds include reserves for our secondary guarantee products sold through our Life Insurance segment. Reserves on UL and VUL products with secondary guarantees represented 33% and 32% of total life insurance in-force reserves as of December 31, 2018 and 2017, respectively. UL and VUL products with secondary guarantees represented 36%, 27% and 33% of total sales for the years ended December 31, 2018, 2017 and 2016, respectively.
49
12. Liability for Unpaid Claims
Changes in the liability for unpaid claims (in millions), were as follows:
|
|
|||||||||
|
|
For the Years Ended December 31, |
||||||||
|
|
2018 |
2017 |
2016 |
||||||
|
Balance as of beginning-of-year |
$ |
2,222 |
$ |
2,242 |
$ |
2,307 | |||
|
Reinsurance recoverable |
57 | 69 | 71 | ||||||
|
Net balance as of beginning-of-year |
2,165 | 2,173 | 2,236 | ||||||
|
Business acquired (1) |
2,842 |
- |
- |
||||||
|
Incurred related to: |
|||||||||
|
Current year |
2,531 | 1,346 | 1,395 | ||||||
|
Prior years: |
|||||||||
|
Interest |
120 | 69 | 71 | ||||||
|
All other incurred (2) |
(208 |
) |
(76 |
) |
(156 |
) |
|||
|
Total incurred |
2,443 | 1,339 | 1,310 | ||||||
|
Paid related to: |
|||||||||
|
Current year |
(1,197 |
) |
(798 |
) |
(806 |
) |
|||
|
Prior years |
(1,061 |
) |
(549 |
) |
(567 |
) |
|||
|
Total paid |
(2,258 |
) |
(1,347 |
) |
(1,373 |
) |
|||
|
Net balance as of end-of-year |
5,192 | 2,165 | 2,173 | ||||||
|
Reinsurance recoverable |
143 | 57 | 69 | ||||||
|
Balance as of end-of-year |
$ |
5,335 |
$ |
2,222 |
$ |
2,242 | |||
|
(1) |
Represents Liberty group life and disability reserves, net, as of May 1, 2018, subject to finalization of acquisition date fair values. See Note 3 for additional information. |
|
(2) |
All other incurred is primarily impacted by the level of claim resolutions in the period compared to that which is expected by the reserve assumption. A negative number implies a favorable result where claim resolutions were more favorable than assumed. Our claim resolution rate assumption used in determining reserves is our expectation of the resolution rate we will experience over the long-term life of the block of claims. It will vary from actual experience in any one period, both favorably and unfavorably. |
The majority of the reserves included above are for long-term disability claims. The interest rate assumption is an important part of the reserving process due to the long benefit period for these claims. Interest accrued on prior years reserves has been calculated on the opening reserve balance less one-half of the prior year’s incurred claim payments at our average reserve discount rate.
Long-term disability benefits may extend for many years, and claim development schedules do not reflect these longer benefit periods. As a result, we use longer term retrospective runoff studies, experience studies and prospective studies to develop our liability estimates. Long-term disability reserves are discounted using rates ranging from 3.25% to 5%. The discount rates vary by year of claim incurral.
A reconciliation of future contract benefits as reported in our Consolidated Balance Sheets to the liability for unpaid claims (in millions), was as follows:
|
|
|||||||||
|
|
As of December 31, |
||||||||
|
|
2018 |
2017 |
2016 |
||||||
|
Future contract benefits |
$ |
33,884 |
$ |
22,063 |
$ |
20,681 | |||
|
Less: |
|||||||||
|
Life insurance and annuity reserves and claims due |
27,133 | 18,414 | 16,923 | ||||||
|
Accident and health life insurance reserves |
1,416 | 1,427 | 1,516 | ||||||
|
Liability for unpaid claims |
$ |
5,335 |
$ |
2,222 |
$ |
2,242 | |||
50
13. Short-Term and Long-Term Debt
Details underlying short-term and long-term debt (in millions) were as follows:
|
|
||||||
|
|
As of December 31, |
|||||
|
|
2018 |
2017 |
||||
|
Short-Term Debt |
||||||
|
Short-term debt (1) |
$ |
288 |
$ |
10 | ||
|
|
||||||
|
Long-Term Debt, Excluding Current Portion |
||||||
|
9.76% surplus note, due 2024 |
$ |
50 |
$ |
50 | ||
|
6.56% surplus note, due 2028 |
500 | 500 | ||||
|
LIBOR + 111 bps surplus note, due 2028 |
71 | 71 | ||||
|
LIBOR + 226 bps surplus note, due 2028 |
600 | 573 | ||||
|
6.03% surplus note, due 2028 |
750 | 750 | ||||
|
LIBOR + 200 bps surplus note, due 2035 |
30 | 30 | ||||
|
LIBOR + 155 bps surplus note, due 2037 |
25 | 25 | ||||
|
4.20% surplus note, due 2037 |
50 | 50 | ||||
|
LIBOR + 100 bps surplus note, due 2037 |
312 | 325 | ||||
|
4.50% surplus note, due 2038 |
13 |
- |
||||
|
Total long-term debt |
$ |
2,401 |
$ |
2,374 | ||
|
(1) |
The short-term debt represents short-term notes payable to LNC. |
On September 27, 2017, we executed the right to repay the $240 million surplus note issued on June 28, 2013, to LNC and recognized a $5 million loss on the early extinguishment of debt, pre-tax, related to unamortized issuance costs on our Consolidated Statements of Comprehensive Income (Loss).
Future principal payments due on long-term debt (in millions) as of December 31, 2018, were as follows:
|
|
|||
|
2019 |
$ |
- |
|
|
2020 |
- |
||
|
2021 |
- |
||
|
2022 |
- |
||
|
2023 |
- |
||
|
Thereafter |
2,401 | ||
|
Total |
$ |
2,401 |
We issued a surplus note of $50 million to LNC in 1994. The note calls for us to pay the principal amount of the note on or before September 30, 2024, and interest to be paid semiannually at an annual rate of 9.76%. Subject to approval by the Commissioner, we have the right to repay the note on any March 31 or September 30.
We issued a surplus note of $500 million to LNC in 1998. The note calls for us to pay the principal amount of the note on or before March 31, 2028, and interest to be paid quarterly at an annual rate of 6.56%. Subject to approval by the Commissioner, LNC has the right to redeem the note for immediate repayment in total or in part once per year on the anniversary date of the note. Any payment of interest or repayment of principal may be paid only out of our statutory earnings, only if our statutory capital surplus exceeds our statutory capital as of the date of note issuance of $2.3 billion, and subject to approval by the Commissioner.
On October 1, 2013, we issued a surplus note of $71 million to LNC. The note calls for us to pay the principal amount of the note on or before September 24, 2028, and interest to be paid quarterly at an annual rate of LIBOR + 111 bps. Subject to approval by the Commissioner, we have the right to repay the note in whole or in part prior to the maturity date, if our statutory capital surplus exceeds the sum of our surplus at closing plus any accrued but unpaid interest.
On December 17, 2013, we issued a variable surplus note to a wholly-owned subsidiary of LNC with an initial outstanding principal amount of $287 million. The outstanding principal amount as of December 31, 2018, was $600 million. The note calls for us to pay the principal amount of the note on or before October 1, 2028, and interest to be paid quarterly at an annual rate of LIBOR + 226 bps.
We issued a surplus note of $750 million to LNC in 1998. The note calls for us to pay the principal amount of the note on or before December 31, 2028, and interest to be paid quarterly at an annual rate of 6.03%. Subject to approval by the Commissioner, LNC has the right to redeem the note for immediate repayment in total or in part once per year on the anniversary date of the note. Any payment of
51
interest or repayment of principal may be paid only out of our statutory earnings, only if our statutory capital surplus exceeds our statutory capital surplus as of the date of note issuance of $2.4 billion, and subject to approval by the Commissioner.
On October 1, 2015, we issued a surplus note of $30 million to LNC. The note calls for us to pay the principal amount of the note on or before September 28, 2035, and interest to be paid quarterly at an annual rate of LIBOR + 200 bps. Subject to approval by the Commissioner, we have the right to repay the note in whole or in part prior to the maturity date, if our statutory capital surplus exceeds the sum of our surplus at closing plus any accrued but unpaid interest.
On July 1, 2017, we issued a surplus note of $25 million to LNC. The note calls for us to pay the principal amount of the note on or before June 30, 2037, and interest to be paid quarterly at an annual rate of LIBOR + 155 bps. Subject to approval by the Commissioner, we have the right to repay the note in whole or in part prior to the maturity date, if our statutory capital surplus exceeds the sum of our surplus at closing plus any accrued but unpaid interest.
On October 1, 2017, we issued a surplus note of $50 million to LNC. The note calls for us to pay the principal amount of the note on or before July 1, 2037, and interest to be paid quarterly at an annual rate of 4.20%. Subject to approval by the Commissioner, we have the right to repay the note in whole or in part prior to the maturity date, if our statutory capital surplus exceeds the sum of our surplus at closing plus any accrued but unpaid interest.
On October 9, 2007, we issued a surplus note of $375 million that LNC has held effective December 31, 2008. The note calls for us to pay the principal amount of the note on or before October 9, 2037, and interest to be paid quarterly at an annual rate of LIBOR + 100 bps. On June 15, 2017, the surplus note was amended to include repayment terms stating subject to approval by the Commissioner, we have the right to repay the note in whole or in part prior to the maturity date, if our statutory capital surplus exceeds the sum of our surplus at closing plus any accrued but unpaid interest. The outstanding principal amount as of December 31, 2018, was $312 million due to executing our right to repay the surplus note in part to LNC.
On July 1, 2018, we issued a surplus note of $13 million to LNC. The note calls for us to pay the principal amount of the note on or before June 30, 2038, and interest to be paid quarterly at an annual rate of 4.50%. Subject to approval by the Commissioner, we have the right to repay the note in whole or in part prior to the maturity date, if our statutory capital surplus exceeds the sum of our surplus at closing plus any accrued but unpaid interest.
Credit Facilities and Letters of Credit
Credit facilities, which allow for borrowing or issuances of letters of credit (“LOCs”), and LOCs (in millions) were as follows:
|
|
||||||||
|
|
As of December 31, 2018 |
|||||||
|
|
Expiration |
Maximum |
LOCs |
|||||
|
|
Date |
Available |
Issued |
|||||
|
Credit Facilities |
||||||||
|
Five-year revolving credit facility |
Jun-2021 |
$ |
2,500 |
$ |
995 | |||
|
LOC facility (1) |
Aug-2031 |
990 | 953 | |||||
|
LOC facility (1) |
Oct-2031 |
1,006 | 1,006 | |||||
|
Total |
$ |
4,496 |
$ |
2,954 | ||||
|
(1) |
Our wholly-owned subsidiaries entered into irrevocable LOC facility agreements with third-party lenders supporting inter-company reinsurance agreements. |
On June 30, 2016, the existing credit agreement was refinanced with a syndicate of banks. This agreement (the “credit facility”) allows for the borrowing and issuance of LOCs of up to $2.5 billion, $1.75 billion of which is available only to reimburse the banks for drawn LOCs. The credit facility is unsecured and has a commitment termination date of June 30, 2021. The LOCs under the facility are used primarily to satisfy reserve credit requirements of (i) LNL and LLANY for which reserve credit is provided by LNL captive reinsurance subsidiaries and LNBAR and (ii) certain ceding companies of our legacy reinsurance business.
The credit facility contains or includes:
|
· |
Customary terms and conditions, including covenants restricting our ability to incur liens, merge or consolidate with another entity where we are not the surviving entity and dispose of all or substantially all of our assets; |
|
· |
Financial covenants including maintenance of a minimum consolidated net worth (as defined in the facility) equal to the sum of $10.5 billion plus 50% of the aggregate net proceeds of equity issuances received by us in accordance with the terms of the credit facility; and a debt-to-capital ratio as defined in accordance with the credit facility not to exceed 0.35 to 1.00; and |
|
· |
Customary events of default, subject to certain materiality thresholds and grace periods for certain of those events of default. |
Upon an event of default, the credit facility provides that, among other things, the commitments may be terminated and the loans then outstanding may be declared due and payable. As of December 31, 2018, we were in compliance with all such covenants.
52
Our LOC facility agreements each contain customary terms and conditions, including early termination fees, covenants restricting the ability of the subsidiaries to incur liens, merge or consolidate with another entity and dispose of all or substantially all of their assets. Upon an event of early termination, the agreements require the immediate payment of all or a portion of the present value of the future LOC fees that would have otherwise been paid. Further, the agreements contain customary events of default, subject to certain materiality thresholds and grace periods for certain of those events of default. The events of default include payment defaults, covenant defaults, material inaccuracies in representations and warranties, bankruptcy and liquidation proceedings and other customary defaults. Upon an event of default, the agreements provide that, among other things, obligations to issue, amend or increase the amount of any LOC shall be terminated and any obligations shall become immediately due and payable. As of December 31, 2018, we were in compliance with all such covenants.
14. Contingencies and Commitments
Contingencies
Regulatory and Litigation Matters
Regulatory bodies, such as state insurance departments, the SEC, Financial Industry Regulatory Authority and other regulatory bodies regularly make inquiries and conduct examinations or investigations concerning our compliance with, among other things, insurance laws, securities laws, laws governing the activities of broker-dealers, registered investment advisers and unclaimed property laws.
LNL and its affiliates are involved in various pending or threatened legal or regulatory proceedings, including purported class actions, arising from the conduct of business both in the ordinary course and otherwise. In some of the matters, very large and/or indeterminate amounts, including punitive and treble damages, are sought. Modern pleading practice in the U.S. permits considerable variation in the assertion of monetary damages or other relief. Jurisdictions may permit claimants not to specify the monetary damages sought or may permit claimants to state only that the amount sought is sufficient to invoke the jurisdiction of the trial court. In addition, jurisdictions may permit plaintiffs to allege monetary damages in amounts well exceeding verdicts obtained in the jurisdiction for similar matters. This variability in pleadings, together with the actual experiences of LNL in litigating or resolving through settlement numerous claims over an extended period of time, demonstrates to management that the monetary relief which may be specified in a lawsuit or claim bears little relevance to its merits or disposition value.
Due to the unpredictable nature of litigation, the outcome of a litigation matter and the amount or range of potential loss at particular points in time is normally difficult to ascertain. Uncertainties can include how fact finders will evaluate documentary evidence and the credibility and effectiveness of witness testimony, and how trial and appellate courts will apply the law in the context of the pleadings or evidence presented, whether by motion practice, or at trial or on appeal. Disposition valuations are also subject to the uncertainty of how opposing parties and their counsel will themselves view the relevant evidence and applicable law.
We establish liabilities for litigation and regulatory loss contingencies when information related to the loss contingencies shows both that it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. It is possible that some matters could require us to pay damages or make other expenditures or establish accruals in amounts that could not be estimated as of December 31, 2018. While the potential future charges could be material in the particular quarterly or annual periods in which they are recorded, based on information currently known by management, management does not believe any such charges are likely to have a material adverse effect on LNL’s financial condition.
For some matters, the Company is able to estimate a reasonably possible range of loss. For such matters in which a loss is probable, an accrual has been made. For such matters where a loss is believed to be reasonably possible, but not probable, no accrual has been made. Accordingly, the estimate contained in this paragraph reflects two types of matters. For some matters included within this estimate, an accrual has been made, but there is a reasonable possibility that an exposure exists in excess of the amount accrued. In these cases, the estimate reflects the reasonably possible range of loss in excess of the accrued amount. For other matters included within this estimation, no accrual has been made because a loss, while potentially estimable, is believed to be reasonably possible but not probable. In these cases, the estimate reflects the reasonably possible loss or range of loss. As of December 31, 2018, we estimate the aggregate range of reasonably possible losses to be up to approximately $50 million.
For other matters, we are not currently able to estimate the reasonably possible loss or range of loss. We are often unable to estimate the possible loss or range of loss until developments in such matters have provided sufficient information to support an assessment of the range of possible loss, such as quantification of a damage demand from plaintiffs, discovery from other parties and investigation of factual allegations, rulings by the court on motions or appeals, analysis by experts and the progress of settlement negotiations. On a quarterly and annual basis, we review relevant information with respect to litigation contingencies and update our accruals, disclosures and estimates of reasonably possible losses or ranges of loss based on such reviews.
Certain reinsurers have sought rate increases on certain yearly renewable term treaties. We are disputing the requested rate increases under these treaties. We have initiated and will initiate arbitration proceedings, as necessary, under these treaties in order to protect our contractual rights. Additionally, reinsurers may initiate arbitration proceedings against us. We believe it is unlikely the outcome of these disputes will have a material adverse effect on our financial condition. For more information about reinsurance, see Note 9.
53
Cost of Insurance Litigation
Glover v. Connecticut General Life Insurance Company and The Lincoln National Life Insurance Company, filed in the U.S. District Court for the District of Connecticut, No. 3:16-cv-00827, is a putative class action that was served on LNL on June 8, 2016. Plaintiff is the owner of a universal life insurance policy who alleges that LNL charged more for non-guaranteed cost of insurance than permitted by the policy. Plaintiff seeks to represent all universal life and variable universal life policyholders who owned policies containing non-guaranteed cost of insurance provisions that are similar to those of Plaintiff’s policy and seeks damages on behalf of all such policyholders. On January 11, 2019, the court dismissed plaintiff’s complaint in its entirety. On February 26, 2019, plaintiff filed a motion for leave to amend the complaint.
Hanks v. The Lincoln Life and Annuity Company of New York (“LLANY”) and Voya Retirement Insurance and Annuity Company (“Voya”), filed in the U.S. District Court for the Southern District of New York, No. 1:16-cv-6399, is a putative class action that was served on LLANY on August 12, 2016. Plaintiff owns a universal life policy originally issued by Aetna (now Voya) and alleges that (i) Voya breached the terms of the policy when it increased non-guaranteed cost of insurance rates on Plaintiff’s policy; and (ii) LLANY, as reinsurer and administrator of Plaintiff’s policy, engaged in wrongful conduct related to the cost of insurance increase and was unjustly enriched as a result. Plaintiff seeks to represent all owners of Aetna life insurance policies that were subject to non-guaranteed cost of insurance rate increases in 2016 and seeks damages on their behalf. We are vigorously defending this matter.
EFG Bank AG, Cayman Branch, et al. v. The Lincoln National Life Insurance Company, pending in the U.S. District Court for the Eastern District of Pennsylvania, No. 2:17-cv-02592, is a civil action filed on February 1, 2017. Plaintiffs own Legend Series universal life insurance policies originally issued by Jefferson-Pilot (now LNL). Plaintiffs allege that LNL breached the terms of policyholders’ contracts when it increased cost of insurance rates beginning in 2016. We are vigorously defending this matter.
In re: Lincoln National COI Litigation, pending in the U.S. District Court for the Eastern District of Pennsylvania, Master File No. 2:16-cv-06605-GJP, is a consolidated litigation matter related to multiple putative class action filings that were consolidated by an order dated March 20, 2017. In addition to consolidating a number of existing matters, the order also covers any future cases filed in the same district related to the same subject matter. Plaintiffs own universal life insurance policies originally issued by Jefferson-Pilot (now LNL). Plaintiffs allege that LNL and LNC breached the terms of policyholders’ contracts by increasing non-guaranteed cost of insurance rates beginning in 2016. Plaintiffs seek to represent classes of policyowners and seek damages on their behalf. We are vigorously defending this matter.
In re: Lincoln National 2017 COI Rate Litigation, Master File No. 2:17-cv-04150 is a consolidated litigation matter related to multiple putative class action filings that were consolidated by an order of the court in March 2018. Plaintiffs own universal life insurance policies originally issued by former Jefferson-Pilot (now LNL). Plaintiffs allege that LNL and LNC breached the terms of policyholders’ contracts by increasing non-guaranteed cost of insurance rates beginning in 2017. Plaintiffs seek to represent classes of policyholders and seek damages on their behalf. We are vigorously defending this matter.
TVPX ARS INC., as Securities Intermediary for Consolidated Wealth Management, LTD. v. The Lincoln National Life Insurance Company, filed in the U.S. District Court for the Eastern District of Pennsylvania, No. 2:18-cv-02989, is a putative class action that was filed on July 17, 2018. Plaintiff alleges that LNL charged more for non-guaranteed cost of insurance than permitted by the policy. Plaintiff seeks to represent all universal life and variable universal life policyholders who own policies issued by LNL or its predecessors containing non-guaranteed cost of insurance provisions that are similar to those of Plaintiff’s policy and seeks damages on behalf of all such policyholders. We are vigorously defending this matter.
LSH Co. and Wells Fargo Bank, National Association, as securities intermediary for LSH Co. v. Lincoln National Corporation and The Lincoln National Life Insurance Company, pending in the U.S. District Court for the Eastern District of Pennsylvania, No. 2:18-cv-05529, is a civil action filed on December 21, 2018. Plaintiffs own universal life insurance policies originally issued by Jefferson-Pilot (now LNL). Plaintiffs allege that LNL breached the terms of policyholders’ contracts when it increased non-guaranteed cost of insurance rates in 2016 and 2017. Because the majority of policies at issue experienced a rate change in 2016, we expect the case will be consolidated with the In re: Lincoln National COI Litigation and EFG Bank cases, discussed above. We are vigorously defending this matter.
54
Commitments
Operating Leases
We lease office space and certain equipment under various long-term lease agreements. Rental expense on operating leases for the years ended December 31, 2018, 2017 and 2016, was $43 million, $36 million and $37 million, respectively. Our future minimum lease payments (in millions) as of December 31, 2018, were as follows:
|
|
|||
|
2019 |
$ |
36 | |
|
2020 |
36 | ||
|
2021 |
32 | ||
|
2022 |
27 | ||
|
2023 |
24 | ||
|
Thereafter |
85 | ||
|
Total |
$ |
240 |
Capital Leases
In 2018 and 2017, we entered into sale-leaseback transactions on $88 million and $62 million, respectively, (net of amortization) of assets. These transactions have been classified as other assets on our Consolidated Balance Sheets. These assets will continue to be amortized on a straight-line basis over the assets’ remaining lives. Total accumulated amortization of all capital leased assets under sale-leaseback transactions as of December 31, 2018 and 2017, was $282 million and $101 million, respectively. Future minimum lease payments under capital leases (in millions) as of December 31, 2018, were as follows:
|
|
|||
|
2019 |
$ |
97 | |
|
2020 |
58 | ||
|
2021 |
68 | ||
|
2022 |
67 | ||
|
2023 |
91 | ||
|
Thereafter |
28 | ||
|
Total minimum lease payments |
409 | ||
|
Less: Amount representing interest |
45 | ||
|
Present value of minimum lease payments |
$ |
364 |
Vulnerability from Concentrations
As of December 31, 2018, we did not have a concentration of: business transactions with a particular customer or lender; sources of supply of labor or services used in the business; or a market or geographic area in which business is conducted that makes us vulnerable to an event that is at least reasonably possible to occur in the near term and which could cause a severe impact to our financial condition. For information on our investment and reinsurance concentrations, see Notes 5 and 9, respectively.
Although we do not have any significant concentration of customers, our American Legacy Variable Annuity (“ALVA”) product offered in our Annuities segment is significant to this segment. The ALVA product accounted for 11%, 14% and 21% of Annuities’ variable annuity product deposits in 2018, 2017 and 2016, respectively, and represented approximately 38%, 40% and 41% of the segment’s total variable annuity product account values as of December 31, 2018, 2017 and 2016, respectively. In addition, fund choices for certain of our other variable annuity products offered in our Annuities segment include American Fund Insurance SeriesSM (“AFIS”) funds. For the Annuities segment, AFIS funds accounted for 16%, 20% and 23% of variable annuity product deposits in 2018, 2017 and 2016, respectively, and represented 45%, 47% and 47% of the segment’s total variable annuity product account values as of December 31, 2018, 2017 and 2016, respectively.
Other Contingency Matters
State guaranty funds assess insurance companies to cover losses to contract holders of insolvent or rehabilitated companies. Mandatory assessments may be partially recovered through a reduction in future premium taxes in some states. We have accrued for expected assessments and the related reductions in future state premium taxes, which net to assessments (recoveries) of $(18) million and $(17) million as of December 31, 2018 and 2017, respectively.
55
15. Shares and Stockholder’s Equity
All authorized and issued shares of LNL are owned by LNC.
AOCI
The following summarizes the components and changes in AOCI (in millions):
|
|
|||||||||
|
|
For the Years Ended December 31, |
||||||||
|
|
2018 |
2017 |
2016 |
||||||
|
Unrealized Gain (Loss) on AFS Securities |
|||||||||
|
Balance as of beginning-of-year |
$ |
3,283 |
$ |
1,687 |
$ |
934 | |||
|
Cumulative effect from adoption of new accounting standards |
634 |
- |
- |
||||||
|
Unrealized holding gains (losses) arising during the year |
(5,995 |
) |
2,872 | 1,549 | |||||
|
Change in foreign currency exchange rate adjustment |
(107 |
) |
134 | (100 |
) |
||||
|
Change in DAC, VOBA, DSI, future contract benefits and other contract holder funds |
1,748 | (703 |
) |
(460 |
) |
||||
|
Income tax benefit (expense) |
923 | (745 |
) |
(351 |
) |
||||
|
Less: |
|||||||||
|
Reclassification adjustment for gains (losses) included in net income (loss) |
(44 |
) |
(40 |
) |
(155 |
) |
|||
|
Associated amortization of DAC, VOBA, DSI and DFEL |
(19 |
) |
(19 |
) |
(22 |
) |
|||
|
Income tax benefit (expense) |
13 | 21 | 62 | ||||||
|
Balance as of end-of-year |
$ |
536 |
$ |
3,283 |
$ |
1,687 | |||
|
Unrealized OTTI on AFS Securities |
|||||||||
|
Balance as of beginning-of-year |
$ |
39 |
$ |
22 |
$ |
19 | |||
|
(Increases) attributable to: |
|||||||||
|
Cumulative effect from adoption of new accounting standards |
9 |
- |
- |
||||||
|
Gross OTTI recognized in OCI during the year |
- |
- |
(53 |
) |
|||||
|
Change in DAC, VOBA, DSI and DFEL |
- |
- |
12 | ||||||
|
Income tax benefit (expense) |
- |
- |
14 | ||||||
|
Decreases attributable to: |
|||||||||
|
Changes in fair value, sales, maturities or other settlements of AFS securities |
(18 |
) |
34 | 51 | |||||
|
Change in DAC, VOBA, DSI and DFEL |
(5 |
) |
(7 |
) |
(7 |
) |
|||
|
Income tax benefit (expense) |
4 | (10 |
) |
(15 |
) |
||||
|
Balance as of end-of-year |
$ |
29 |
$ |
39 |
$ |
22 | |||
|
Unrealized Gain (Loss) on Derivative Instruments |
|||||||||
|
Balance as of beginning-of-year |
$ |
27 |
$ |
93 |
$ |
157 | |||
|
Cumulative effect from adoption of new accounting standard |
6 |
- |
- |
||||||
|
Unrealized holding gains (losses) arising during the year |
40 | 63 | (175 |
) |
|||||
|
Change in foreign currency exchange rate adjustment |
111 | (137 |
) |
96 | |||||
|
Change in DAC, VOBA, DSI and DFEL |
(14 |
) |
1 | 2 | |||||
|
Income tax benefit (expense) |
(29 |
) |
26 | 27 | |||||
|
Less: |
|||||||||
|
Reclassification adjustment for gains (losses) included in net income (loss) |
31 | 31 | 24 | ||||||
|
Associated amortization of DAC, VOBA, DSI and DFEL |
(3 |
) |
(2 |
) |
(2 |
) |
|||
|
Income tax benefit (expense) |
(6 |
) |
(10 |
) |
(8 |
) |
|||
|
Balance as of end-of-year |
$ |
119 |
$ |
27 |
$ |
93 | |||
|
Funded Status of Employee Benefit Plans |
|||||||||
|
Balance as of beginning-of-year |
$ |
(22 |
) |
$ |
(20 |
) |
$ |
(19 |
) |
|
Cumulative effect from adoption of new accounting standard |
(5 |
) |
- |
- |
|||||
|
Adjustment arising during the year |
3 | (4 |
) |
(2 |
) |
||||
|
Income tax benefit (expense) |
(1 |
) |
2 | 1 | |||||
|
Balance as of end-of-year |
$ |
(25 |
) |
$ |
(22 |
) |
$ |
(20 |
) |
56
The following summarizes the reclassifications out of AOCI (in millions) and the associated line item in the Consolidated Statements of Comprehensive Income (Loss):
|
|
||||||||||||
|
|
For the Years Ended December 31, |
|||||||||||
|
|
2018 |
2017 |
2016 |
|||||||||
|
Unrealized Gain (Loss) on AFS Securities |
||||||||||||
|
Gross reclassification |
$ |
(44 |
) |
$ |
(40 |
) |
$ |
(155 |
) |
Total realized gain (loss) |
||
|
Associated amortization of DAC, |
||||||||||||
|
VOBA, DSI and DFEL |
(19 |
) |
(19 |
) |
(22 |
) |
Total realized gain (loss) |
|||||
|
Reclassification before income |
Income (loss) from continuing |
|||||||||||
|
tax benefit (expense) |
(63 |
) |
(59 |
) |
(177 |
) |
operations before taxes |
|||||
|
Income tax benefit (expense) |
13 | 21 | 62 |
Federal income tax expense (benefit) |
||||||||
|
Reclassification, net of income tax |
$ |
(50 |
) |
$ |
(38 |
) |
$ |
(115 |
) |
Net income (loss) |
||
|
|
||||||||||||
|
Unrealized OTTI on AFS Securities |
||||||||||||
|
Gross reclassification |
$ |
7 |
$ |
5 |
$ |
3 |
Total realized gain (loss) |
|||||
|
Change in DAC, VOBA, DSI and DFEL |
- |
(1 |
) |
- |
Total realized gain (loss) |
|||||||
|
Reclassification before income |
Income (loss) from continuing |
|||||||||||
|
tax benefit (expense) |
7 | 4 | 3 |
operations before taxes |
||||||||
|
Income tax benefit (expense) |
(1 |
) |
(1 |
) |
- |
Federal income tax expense (benefit) |
||||||
|
Reclassification, net of income tax |
$ |
6 |
$ |
3 |
$ |
3 |
Net income (loss) |
|||||
|
|
||||||||||||
|
Unrealized Gain (Loss) on Derivative Instruments |
||||||||||||
|
Gross reclassifications: |
||||||||||||
|
Interest rate contracts |
$ |
4 |
$ |
4 |
$ |
5 |
Net investment income |
|||||
|
Interest rate contracts |
- |
- |
1 |
Total realized gain (loss) |
||||||||
|
Foreign currency contracts |
27 | 18 | 11 |
Net investment income |
||||||||
|
Foreign currency contracts |
- |
9 | 7 |
Total realized gain (loss) |
||||||||
|
Total gross reclassifications |
31 | 31 | 24 | |||||||||
|
Associated amortization of DAC, |
||||||||||||
|
VOBA, DSI and DFEL |
(3 |
) |
(2 |
) |
(2 |
) |
Commissions and other expenses |
|||||
|
Reclassifications before income |
Income (loss) from continuing |
|||||||||||
|
tax benefit (expense) |
28 | 29 | 22 |
operations before taxes |
||||||||
|
Income tax benefit (expense) |
(6 |
) |
(10 |
) |
(8 |
) |
Federal income tax expense (benefit) |
|||||
|
Reclassifications, net of income tax |
$ |
22 |
$ |
19 |
$ |
14 |
Net income (loss) |
|||||
16. Commissions and Other Expenses
Details underlying commissions and other expenses (in millions) were as follows:
|
|
|||||||||
|
|
For the Years Ended December 31, |
||||||||
|
|
2018 |
2017 |
2016 |
||||||
|
Commissions |
$ |
2,271 |
$ |
1,998 |
$ |
1,927 | |||
|
General and administrative expenses |
1,910 | 1,715 | 1,623 | ||||||
|
Expenses associated with reserve financing and unrelated LOCs |
64 | 57 | 40 | ||||||
|
DAC and VOBA deferrals and interest, net of amortization |
(436 |
) |
(390 |
) |
(170 |
) |
|||
|
Broker-dealer expenses |
358 | 329 | 320 | ||||||
|
Specifically identifiable intangible asset amortization |
9 | 4 | 4 | ||||||
|
Taxes, licenses and fees |
322 | 254 | 261 | ||||||
|
Acquisition and integration costs related to mergers and acquisitions |
85 |
- |
- |
||||||
|
Total |
$ |
4,583 |
$ |
3,967 |
$ |
4,005 | |||
57
17. Retirement and Deferred Compensation Plans
Defined Benefit Pension and Other Postretirement Benefit Plans
We maintain defined benefit pension plans in which certain agents are participants. These defined benefit pension plans are closed to new entrants and existing participants do not accrue any additional benefits. We comply with applicable minimum funding requirements and elected to contribute $8 million for the year ended December 31, 2018. We do not expect to be required to make any contributions to these pension plans in 2019. We sponsor other postretirement benefit plans that provide health care and life insurance to certain retired agents. Total net periodic cost (recovery) for these plans was $6 million, $5 million and $3 million during 2018, 2017 and 2016, respectively. In 2019, we expect to make benefit payments of approximately $10 million for these plans.
Information (in millions) with respect to these plans was as follows:
|
|
As of or For the Years Ended December 31, |
||||||||||||
|
|
2018 |
2017 |
2018 |
2017 |
|||||||||
|
|
|||||||||||||
|
|
Other Postretirement |
||||||||||||
|
|
Pension Plans |
Benefit Plans |
|||||||||||
|
Fair value of plan assets |
$ |
107 |
$ |
111 |
$ |
8 |
$ |
7 | |||||
|
Projected benefit obligation |
112 | 119 | 10 | 12 | |||||||||
|
Funded status |
$ |
(5 |
) |
$ |
(8 |
) |
$ |
(2 |
) |
$ |
(5 |
) |
|
|
|
|||||||||||||
|
Amounts Recognized on the |
|||||||||||||
|
Consolidated Balance Sheets |
|||||||||||||
|
Other assets |
$ |
- |
$ |
- |
$ |
- |
$ |
- |
|||||
|
Other liabilities |
(5 |
) |
(8 |
) |
(2 |
) |
(5 |
) |
|||||
|
Net amount recognized |
$ |
(5 |
) |
$ |
(8 |
) |
$ |
(2 |
) |
$ |
(5 |
) |
|
|
|
|||||||||||||
|
Weighted-Average Assumptions |
|||||||||||||
|
Benefit obligations: |
|||||||||||||
|
Weighted-average discount rate |
4.50% | 4.00% | 4.50% | 4.00% | |||||||||
|
Net periodic benefit cost: |
|||||||||||||
|
Weighted-average discount rate |
4.00% | 4.50% | 4.00% | 4.50% | |||||||||
|
Expected return on plan assets |
4.50% | 4.75% | 6.50% | 6.50% | |||||||||
|
|
|||||||||||||
The weighted average discount rate was determined based on a corporate yield curve as of December 31, 2018, and projected benefit obligation cash flows. The expected return on plan assets was determined based on historical and expected future returns of the various asset categories, using the plans’ target plan allocation. We reevaluate these assumptions each plan year.
The following summarizes our fair value measurements of our benefit plans’ assets (in millions) on a recurring basis by asset category:
|
|
As of December 31, |
||||||
|
|
2018 |
2017 |
|||||
|
|
|||||||
|
Fixed maturity securities: |
|||||||
|
Corporate bonds |
$ |
1 |
$ |
1 | |||
|
U.S. government bonds |
87 | 105 | |||||
|
U.S. government mortgage-backed |
|||||||
|
securities |
- |
3 | |||||
|
Cash and invested cash |
19 | 2 | |||||
|
Other investments |
8 | 7 | |||||
|
Total |
$ |
115 |
$ |
118 | |||
|
|
|||||||
See “Fair Value Measurement” in Note 1 for discussion on how we categorize our pension plans’ assets into the three-level fair value hierarchy. See “Financial Instruments Carried at Fair Value” in Note 22 for a summary of our fair value measurement of our pension plans’ assets by the three-level fair value hierarchy.
Participation in Defined Benefit Pension and Other Postretirement Benefit Plans
We participate in defined benefit pension plans that are sponsored by LNC for certain employees and non-employee directors. These defined benefit pension plans are closed to new entrants, and existing participants do not accrue any additional benefits. We also participate in other postretirement benefit plans sponsored by LNC that provide health care and life insurance to certain retired
58
employees. Our expense (benefit) for these plans was $(4) million, $7 million and $9 million for the years ended December 31, 2018, 2017 and 2016, respectively.
Defined Contribution Plans
We sponsor tax-qualified defined contribution plans for eligible agents that are administered in accordance with the plan documents and various limitations under section 401(a) of the Internal Revenue Code of 1986. We also participate in defined contribution plans sponsored by LNC for eligible employees. Our expense for these plans was $90 million, $85 million and $83 million, for the years ended December 31, 2018, 2017 and 2016, respectively.
Deferred Compensation Plans
We sponsor non-qualified, unfunded, deferred compensation plans for certain current and former agents. Certain current employees participate in non-qualified, unfunded, deferred compensation plans sponsored by LNC. The results of certain notional investment options within some of the plans are hedged by total return swaps. Our expenses increase or decrease in direct proportion to the change in market value of the participants’ investment options. Participants of certain plans are able to select LNC stock as a notional investment option; however, it is not hedged by the total return swaps and is a primary source of expense volatility related to these plans. Our expense for these plans was $12 million, $27 million and $22 million for the years ended December 31, 2018, 2017 and 2016, respectively. For further discussion of total return swaps related to our deferred compensation plans, see Note 6.
Information (in millions) with respect to these plans was as follows:
|
|
As of December 31, |
||||||||
|
|
2018 |
2017 |
|||||||
|
Total liabilities (1) |
$ |
487 |
$ |
517 | |||||
|
Investments dedicated to fund liabilities (2) |
170 | 182 | |||||||
|
|
|||||||||
|
(1) |
Reported in other liabilities on our Consolidated Balance Sheets. |
|
(2) |
Reported in other assets on our Consolidated Balance Sheets. |
18. Stock-Based Incentive Compensation Plans
Our employees and agents are included in LNC’s various stock-based incentive compensation plans that provide for the issuance of stock options, performance shares, stock appreciation rights (“SARs”) and restricted stock units (“RSUs”). LNC issues new shares to satisfy option exercises and vested performance shares and RSUs.
Total compensation expense (in millions) by award type for all of our stock-based incentive compensation plans was as follows:
|
|
|||||||||
|
|
For the Years Ended December 31, |
||||||||
|
|
2018 |
2017 |
2016 |
||||||
|
Stock options |
$ |
5 |
$ |
9 |
$ |
9 | |||
|
Performance shares |
14 | 12 | 10 | ||||||
|
SARs |
(1 |
) |
2 | 3 | |||||
|
RSUs |
30 | 24 | 22 | ||||||
|
Total |
$ |
48 |
$ |
47 |
$ |
44 | |||
|
|
|||||||||
|
Recognized tax benefit |
$ |
10 |
$ |
16 |
$ |
15 | |||
19. Statutory Information and Restrictions
We prepare financial statements in accordance with statutory accounting principles (“SAP”) prescribed or permitted by the insurance departments of our respective states of domicile, which may vary materially from GAAP.
Prescribed SAP includes the Accounting Practices and Procedures Manual of the National Association of Insurance Commissioners (“NAIC”) as well as state laws, regulations and administrative rules. Permitted SAP encompasses all accounting practices not so prescribed. The principal differences between statutory financial statements and financial statements prepared in accordance with GAAP are that statutory financial statements do not reflect DAC, some bond portfolios may be carried at amortized cost, assets and liabilities are presented net of reinsurance, contract holder liabilities are generally valued using more conservative assumptions and certain assets are non-admitted.
We are subject to the applicable laws and regulations of our respective states of domicile. Changes in these laws and regulations could change capital levels or capital requirements for the Company.
59
Statutory capital and surplus, net gain (loss) from operations, after-tax, net income (loss) and dividends to the LNC holding company amounts (in millions) below consist of all or a combination of the following entities: LNL, LLACB, Lincoln Reinsurance Company of South Carolina, LLANY, Lincoln Reinsurance Company of Vermont I, Lincoln Reinsurance Company of Vermont III, Lincoln Reinsurance Company of Vermont IV, Lincoln Reinsurance Company of Vermont V, Lincoln Reinsurance Company of Vermont VI and Lincoln Reinsurance Company of Vermont VII.
|
|
||||||
|
|
As of December 31, |
|||||
|
|
2018 |
2017 |
||||
|
U.S. capital and surplus |
$ |
8,330 |
$ |
8,074 | ||
|
|
|||||||||
|
|
|||||||||
|
|
For the Years Ended December 31, |
||||||||
|
|
2018 |
2017 |
2016 |
||||||
|
U.S. net gain (loss) from operations, after-tax |
$ |
686 |
$ |
1,312 |
$ |
1,088 | |||
|
U.S. net income (loss) |
1,013 | 1,452 | 982 | ||||||
|
U.S. dividends to LNC holding company |
910 | 954 | 950 | ||||||
Comparison of 2018 to 2017
Statutory net income (loss) decreased due primarily to lower dividends from affiliates, acquisition and integration costs incurred as part of our acquisition of LLACB, and unfavorable reserve strain on certain products. See Note 3 for information regarding our acquisition.
Comparison of 2017 to 2016
Statutory net income (loss) increased due primarily to higher dividends from affiliates, higher realized gains on investments, and increased other revenue, partially offset by unfavorable reserve strain on certain products.
The states of domicile for LNL and LLANY, Indiana and New York, respectively, have adopted certain prescribed accounting practices that differ from those found in NAIC SAP. These prescribed practices are the use of continuous Commissioners Annuity Reserve Valuation Method (“CARVM”) in the calculation of reserves as prescribed by the state of New York, the calculation of reserves on universal life policies based on the Indiana universal life method as prescribed by the state of Indiana for policies issued before January 1, 2006, and the use of a more conservative valuation interest rate on certain annuities prescribed by the states of Indiana and New York. The Vermont reinsurance subsidiaries also have certain accounting practices permitted by the state of Vermont that differ from those found in NAIC SAP. One permitted practice involves accounting for the lesser of the face amount of all amounts outstanding under an LOC and the value of the Valuation of Life Insurance Policies Model Regulation (“XXX”) additional statutory reserves as an admitted asset and a form of surplus as of December 31, 2018 and 2017. Another permitted practice involves the acquisition of an LLC note in exchange for a variable value surplus note that is recognized as an admitted asset and a form of surplus as of December 31, 2018. Lastly, the state of Vermont has permitted a practice to account for certain excess of loss reinsurance treaties with unaffiliated reinsurers as an asset and form of surplus as of December 31, 2018. These permitted practices are related to structures that continue to be allowed in accordance with the grandfathered structures under the provisions of Actuarial Guideline 48 (“AG48”).
The favorable (unfavorable) effects on statutory surplus compared to NAIC statutory surplus from the use of these prescribed and permitted practices (in millions) were as follows:
|
|
||||||
|
|
As of December 31, |
|||||
|
|
2018 |
2017 |
||||
|
State Prescribed Practices |
||||||
|
Calculation of reserves using the Indiana universal life method |
$ |
36 |
$ |
54 | ||
|
Conservative valuation rate on certain annuities |
(55 |
) |
(50 |
) |
||
|
Vermont Subsidiaries Permitted Practices (1) |
||||||
|
Lesser of LOC and XXX additional reserve as surplus |
1,959 | 1,965 | ||||
|
LLC notes and variable value surplus notes |
1,634 | 1,585 | ||||
|
Excess of loss reinsurance treaties |
330 | 185 | ||||
|
|
||||||
|
(1) |
These permitted practices are related to structures that continue to be allowed in accordance with the grandfathered structures under the provisions of AG48. |
The New York State Department of Financial Services did not recognize the NAIC revisions to Actuarial Guideline 38 in applying the New York law governing the reserves to be held for UL and VUL products containing secondary guarantees. The change, which was effective as of December 31, 2013, impacted our New York-domiciled insurance subsidiary, LLANY. Although LLANY discontinued the sale of these products in early 2013, the change affected those policies previously sold. As a result, we phased in an increase in reserves over five years, from 2013 to 2017, resulting in a total increase of $450 million.
60
The NAIC has adopted risk-based capital (“RBC”) requirements for life insurance companies to evaluate the adequacy of statutory capital and surplus in relation to investment and insurance risks. The requirements provide a means of measuring the minimum amount of statutory surplus appropriate for an insurance company to support its overall business operations based on its size and risk profile. Under RBC requirements, regulatory compliance is determined by the ratio of a company’s total adjusted capital, as defined by the NAIC, to its company action level of RBC (known as the “RBC ratio”), also as defined by the NAIC. The company action level may be triggered if the RBC ratio is between 75% and 100%, which would require the insurer to submit a plan to the regulator detailing corrective action it proposes to undertake. As of December 31, 2018, the Company’s RBC ratio was in excess of four times the aforementioned company action level.
We are subject to certain insurance department regulatory restrictions as to the transfer of funds and payment of dividends to the holding company. Under Indiana laws and regulations, LNL may pay dividends to LNC without prior approval of the Indiana Insurance Commissioner (the “Commissioner”), only from unassigned surplus and must receive prior approval of the Commissioner to pay a dividend if such dividend, along with all other dividends paid within the preceding 12 consecutive months, would exceed the statutory limitation. The current statutory limitation is the greater of 10% of the insurer’s contract holders’ surplus, as shown on its last annual statement on file with the Commissioner or the insurer’s statutory net gain from operations for the previous 12 months, but in no event to exceed statutory unassigned surplus. Indiana law gives the Commissioner broad discretion to disapprove requests for dividends in excess of these limits. LNL’s subsidiaries, LLANY, a New York-domiciled insurance company, and LLACB, a New Hampshire-domiciled company, are bound by similar restrictions, under the laws of New York and New Hampshire, respectively. Under both New York and New Hampshire law, the applicable statutory limitation on dividends is equal to the lesser of 10% of surplus to contract holders as of the immediately preceding calendar year or net gain from operations for the immediately preceding calendar year, not including realized capital gains. We expect that we could pay dividends of approximately $800 million in 2019 without prior approval from the respective Commissioner of Insurance.
All payments of principal and interest on surplus notes must be approved by the respective Commissioner of Insurance.
61
20. Fair Value of Financial Instruments
The carrying values and estimated fair values of our financial instruments (in millions) were as follows:
|
|
||||||||||||
|
|
As of December 31, 2018 |
As of December 31, 2017 |
||||||||||
|
|
Carrying |
Fair |
Carrying |
Fair |
||||||||
|
|
Value |
Value |
Value |
Value |
||||||||
|
Assets |
||||||||||||
|
AFS securities: |
||||||||||||
|
Fixed maturity securities |
$ |
92,787 |
$ |
92,787 |
$ |
93,340 |
$ |
93,340 | ||||
|
Equity securities |
- |
- |
246 | 246 | ||||||||
|
Trading securities |
1,869 | 1,869 | 1,533 | 1,533 | ||||||||
|
Equity securities |
99 | 99 |
- |
- |
||||||||
|
Mortgage loans on real estate |
13,190 | 13,020 | 10,662 | 10,773 | ||||||||
|
Derivative investments (1) |
1,081 | 1,081 | 845 | 845 | ||||||||
|
Other investments |
1,951 | 1,951 | 2,006 | 2,006 | ||||||||
|
Cash and invested cash |
1,848 | 1,848 | 947 | 947 | ||||||||
|
Reinsurance related embedded derivatives |
188 | 188 |
- |
- |
||||||||
|
Other assets: |
||||||||||||
|
GLB direct embedded derivatives |
123 | 123 | 903 | 903 | ||||||||
|
GLB ceded embedded derivatives |
72 | 72 | 51 | 51 | ||||||||
|
Indexed annuity ceded embedded derivatives |
902 | 902 | 11 | 11 | ||||||||
|
Separate account assets |
132,833 | 132,833 | 144,219 | 144,219 | ||||||||
|
|
||||||||||||
|
Liabilities |
||||||||||||
|
Future contract benefits – indexed annuity |
||||||||||||
|
and IUL contracts embedded derivatives |
(1,305 |
) |
(1,305 |
) |
(1,418 |
) |
(1,418 |
) |
||||
|
Other contract holder funds: |
||||||||||||
|
Remaining guaranteed interest and similar contracts |
(542 |
) |
(542 |
) |
(592 |
) |
(592 |
) |
||||
|
Account values of certain investment contracts |
(34,500 |
) |
(36,321 |
) |
(32,332 |
) |
(36,161 |
) |
||||
|
Short-term debt |
(288 |
) |
(288 |
) |
(10 |
) |
(10 |
) |
||||
|
Long-term debt |
(2,401 |
) |
(2,519 |
) |
(2,374 |
) |
(2,677 |
) |
||||
|
Reinsurance related embedded derivatives |
- |
- |
(51 |
) |
(51 |
) |
||||||
|
Other liabilities: |
||||||||||||
|
Derivative liabilities (1) |
(226 |
) |
(226 |
) |
(455 |
) |
(455 |
) |
||||
|
GLB ceded embedded derivatives |
(196 |
) |
(196 |
) |
(954 |
) |
(954 |
) |
||||
|
|
||||||||||||
|
Benefit Plans’ Assets (2) |
115 | 115 | 118 | 118 | ||||||||
|
(1) |
We have master netting agreements with each of our derivative counterparties, which allow for the netting of our derivative asset and liability positions by counterparty. |
|
(2) |
Included in the funded statuses of the benefit plans, which is reported in other liabilities on our Consolidated Balance Sheets. Refer to Note 17 for information regarding our benefit plans. |
Valuation Methodologies and Associated Inputs for Financial Instruments Not Carried at Fair Value
The following discussion outlines the methodologies and assumptions used to determine the fair value of our financial instruments not carried at fair value on our Consolidated Balance Sheets. Considerable judgment is required to develop these assumptions used to measure fair value. Accordingly, the estimates shown are not necessarily indicative of the amounts that would be realized in a one-time, current market exchange of all of our financial instruments.
Mortgage Loans on Real Estate
The fair value of mortgage loans on real estate is established using a discounted cash flow method based on credit rating, maturity and future income. The ratings for mortgages in good standing are based on property type, location, market conditions, occupancy, debt-service coverage, loan-to-value, quality of tenancy, borrower and payment record. The fair value for impaired mortgage loans is based on the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s market price or the fair value of the collateral if the loan is collateral dependent. The inputs used to measure the fair value of our mortgage loans on real estate are classified as Level 2 within the fair value hierarchy.
62
Other Investments
The carrying value of our assets classified as other investments approximates fair value. Other investments includes primarily LPs and other privately held investments that are accounted for using the equity method of accounting and the carrying value is based on our proportional share of the net assets of the LPs. Other investments also includes FHLB stock carried at cost and periodically evaluated for impairment based on ultimate recovery of par value. The inputs used to measure the fair value of our LPs, other privately held investments and FHLB stock are classified as Level 3 within the fair value hierarchy. The remaining assets in other investments include cash collateral receivables and securities that are not LPs or other privately held investments. The inputs used to measure the fair value of these assets are classified as Level 1 within the fair value hierarchy.
Separate Account Assets
Separate account assets are primarily carried at fair value. A portion of our separate account assets includes LPs, which are accounted for using the equity method of accounting. The carrying value is based on our proportional share of the net assets of the LPs and approximates fair value. The inputs used to measure the fair value of the separate account asset LPs are classified as Level 3 within the fair value hierarchy.
Other Contract Holder Funds
Other contract holder funds include remaining guaranteed interest and similar contracts and account values of certain investment contracts. The fair value for the remaining guaranteed interest and similar contracts is estimated using discounted cash flow calculations as of the balance sheet date. These calculations are based on interest rates currently offered on similar contracts with maturities that are consistent with those remaining for the contracts being valued. As of December 31, 2018 and 2017, the remaining guaranteed interest and similar contracts carrying value approximated fair value. The fair value of the account values of certain investment contracts is based on their approximate surrender value as of the balance sheet date. The inputs used to measure the fair value of our other contract holder funds are classified as Level 3 within the fair value hierarchy.
Short-Term and Long-Term Debt
The fair value of short-term and long-term debt is based on quoted market prices. The inputs used to measure the fair value of our short-term and long-term debt are classified as Level 2 within the fair value hierarchy.
Financial Instruments Carried at Fair Value
We did not have any assets or liabilities measured at fair value on a nonrecurring basis as of December 31, 2018 or 2017, and we noted no changes in our valuation methodologies between these periods.
63
The following summarizes our financial instruments carried at fair value (in millions) on a recurring basis by the fair value hierarchy levels described above:
|
|
||||||||||||||||
|
|
As of December 31, 2018 |
|||||||||||||||
|
|
Quoted |
|||||||||||||||
|
|
Prices |
|||||||||||||||
|
|
in Active |
|||||||||||||||
|
|
Markets for |
Significant |
Significant |
|||||||||||||
|
|
Identical |
Observable |
Unobservable |
Total |
||||||||||||
|
|
Assets |
Inputs |
Inputs |
Fair |
||||||||||||
|
|
(Level 1) |
(Level 2) |
(Level 3) |
Value |
||||||||||||
|
Assets |
||||||||||||||||
|
Investments: |
||||||||||||||||
|
Fixed maturity AFS securities: |
||||||||||||||||
|
Corporate bonds |
$ |
- |
$ |
73,897 |
$ |
5,652 |
$ |
79,549 | ||||||||
|
ABS |
- |
919 | 29 | 948 | ||||||||||||
|
U.S. government bonds |
368 | 18 |
- |
386 | ||||||||||||
|
Foreign government bonds |
- |
335 | 109 | 444 | ||||||||||||
|
RMBS |
- |
3,157 | 7 | 3,164 | ||||||||||||
|
CMBS |
- |
801 | 2 | 803 | ||||||||||||
|
CLOs |
- |
1,625 | 105 | 1,730 | ||||||||||||
|
State and municipal bonds |
- |
5,184 |
- |
5,184 | ||||||||||||
|
Hybrid and redeemable preferred securities |
66 | 438 | 75 | 579 | ||||||||||||
|
Trading securities |
43 | 1,759 | 67 | 1,869 | ||||||||||||
|
Equity securities |
16 | 58 | 25 | 99 | ||||||||||||
|
Derivative investments (1) |
- |
636 | 704 | 1,340 | ||||||||||||
|
Cash and invested cash |
- |
1,848 |
- |
1,848 | ||||||||||||
|
Reinsurance related embedded derivatives |
- |
188 |
- |
188 | ||||||||||||
|
Other assets: |
||||||||||||||||
|
GLB direct embedded derivatives |
- |
- |
123 | 123 | ||||||||||||
|
GLB ceded embedded derivatives |
- |
- |
72 | 72 | ||||||||||||
|
Indexed annuity ceded embedded derivatives |
- |
- |
902 | 902 | ||||||||||||
|
Separate account assets |
665 | 132,135 |
- |
132,800 | ||||||||||||
|
Total assets |
$ |
1,158 |
$ |
222,998 |
$ |
7,872 |
$ |
232,028 | ||||||||
|
|
||||||||||||||||
|
Liabilities |
||||||||||||||||
|
Future contract benefits – indexed annuity |
||||||||||||||||
|
and IUL contracts embedded derivatives |
$ |
- |
$ |
- |
$ |
(1,305 |
) |
$ |
(1,305 |
) |
||||||
|
Other liabilities: |
||||||||||||||||
|
Derivative liabilities (1) |
- |
(314 |
) |
(171 |
) |
(485 |
) |
|||||||||
|
GLB ceded embedded derivatives |
- |
- |
(196 |
) |
(196 |
) |
||||||||||
|
Total liabilities |
$ |
- |
$ |
(314 |
) |
$ |
(1,672 |
) |
$ |
(1,986 |
) |
|||||
|
|
||||||||||||||||
|
Benefit Plans’ Assets |
$ |
- |
$ |
115 |
$ |
- |
$ |
115 | ||||||||
64
|
|
||||||||||||||||
|
|
As of December 31, 2017 |
|||||||||||||||
|
|
Quoted |
|||||||||||||||
|
|
Prices |
|||||||||||||||
|
|
in Active |
|||||||||||||||
|
|
Markets for |
Significant |
Significant |
|||||||||||||
|
|
Identical |
Observable |
Unobservable |
Total |
||||||||||||
|
|
Assets |
Inputs |
Inputs |
Fair |
||||||||||||
|
|
(Level 1) |
(Level 2) |
(Level 3) |
Value |
||||||||||||
|
Assets |
||||||||||||||||
|
Investments: |
||||||||||||||||
|
Fixed maturity AFS securities: |
||||||||||||||||
|
Corporate bonds |
$ |
- |
$ |
75,810 |
$ |
5,350 |
$ |
81,160 | ||||||||
|
ABS |
- |
927 | 26 | 953 | ||||||||||||
|
U.S. government bonds |
522 | 6 | 5 | 533 | ||||||||||||
|
Foreign government bonds |
- |
336 | 110 | 446 | ||||||||||||
|
RMBS |
- |
3,246 | 12 | 3,258 | ||||||||||||
|
CMBS |
- |
593 | 6 | 599 | ||||||||||||
|
CLOs |
- |
717 | 91 | 808 | ||||||||||||
|
State and municipal bonds |
- |
4,959 |
- |
4,959 | ||||||||||||
|
Hybrid and redeemable preferred securities |
70 | 478 | 76 | 624 | ||||||||||||
|
Equity AFS securities |
28 | 57 | 161 | 246 | ||||||||||||
|
Trading securities |
73 | 1,411 | 49 | 1,533 | ||||||||||||
|
Derivative investments (1) |
- |
740 | 603 | 1,343 | ||||||||||||
|
Cash and invested cash |
- |
947 |
- |
947 | ||||||||||||
|
Other assets: |
||||||||||||||||
|
GLB direct embedded derivatives |
- |
- |
903 | 903 | ||||||||||||
|
GLB ceded embedded derivatives |
- |
- |
51 | 51 | ||||||||||||
|
Indexed annuity ceded embedded derivatives |
- |
- |
11 | 11 | ||||||||||||
|
Separate account assets |
814 | 143,405 |
- |
144,219 | ||||||||||||
|
Total assets |
$ |
1,507 |
$ |
233,632 |
$ |
7,454 |
$ |
242,593 | ||||||||
|
|
||||||||||||||||
|
Liabilities |
||||||||||||||||
|
Future contract benefits – indexed annuity |
||||||||||||||||
|
and IUL contracts embedded derivatives |
$ |
- |
$ |
- |
$ |
(1,418 |
) |
$ |
(1,418 |
) |
||||||
|
Reinsurance related embedded derivatives |
- |
(51 |
) |
- |
(51 |
) |
||||||||||
|
Other liabilities: |
||||||||||||||||
|
Derivative liabilities (1) |
- |
(380 |
) |
(573 |
) |
(953 |
) |
|||||||||
|
GLB ceded embedded derivatives |
- |
- |
(954 |
) |
(954 |
) |
||||||||||
|
Total liabilities |
$ |
- |
$ |
(431 |
) |
$ |
(2,945 |
) |
$ |
(3,376 |
) |
|||||
|
|
||||||||||||||||
|
Benefit Plans’ Assets |
$ |
- |
$ |
118 |
$ |
- |
$ |
118 | ||||||||
|
(1) |
Derivative investment assets and liabilities are presented within the fair value hierarchy on a gross basis by derivative type and not on a master netting basis by counterparty. |
65
The following summarizes changes to our financial instruments carried at fair value (in millions) and classified within Level 3 of the fair value hierarchy. This summary excludes any effect of amortization of DAC, VOBA, DSI and DFEL. The gains and losses below may include changes in fair value due in part to observable inputs that are a component of the valuation methodology.
|
|
||||||||||||||||||
|
|
For the Year Ended December 31, 2018 |
|||||||||||||||||
|
|
Gains |
Issuances, |
Transfers |
|||||||||||||||
|
|
Items |
(Losses) |
Sales, |
Into or |
||||||||||||||
|
|
Included |
in |
Maturities, |
Out |
||||||||||||||
|
|
Beginning |
in |
OCI |
Settlements, |
of |
Ending |
||||||||||||
|
|
Fair |
Net |
and |
Calls, |
Level 3, |
Fair |
||||||||||||
|
|
Value |
Income |
Other (1) |
Net (2) |
Net (3)(4) |
Value |
||||||||||||
|
Investments: (5) |
||||||||||||||||||
|
Fixed maturity AFS securities: |
||||||||||||||||||
|
Corporate bonds |
$ |
5,350 |
$ |
10 |
$ |
(198 |
) |
$ |
542 |
$ |
(52 |
) |
$ |
5,652 | ||||
|
ABS |
26 |
- |
- |
5 | (2 |
) |
29 | |||||||||||
|
U.S. government bonds |
5 |
- |
- |
(5 |
) |
- |
- |
|||||||||||
|
Foreign government bonds |
110 |
- |
(1 |
) |
- |
- |
109 | |||||||||||
|
RMBS |
12 |
- |
- |
7 | (12 |
) |
7 | |||||||||||
|
CMBS |
6 |
- |
- |
35 | (39 |
) |
2 | |||||||||||
|
CLOs |
91 |
- |
- |
218 | (204 |
) |
105 | |||||||||||
|
Hybrid and redeemable |
||||||||||||||||||
|
preferred securities |
76 |
- |
(1 |
) |
- |
- |
75 | |||||||||||
|
Equity AFS securities |
161 |
- |
- |
- |
(161 |
) |
- |
|||||||||||
|
Trading securities |
49 | (5 |
) |
- |
30 | (7 |
) |
67 | ||||||||||
|
Equity securities |
- |
(1 |
) |
- |
- |
26 | 25 | |||||||||||
|
Derivative investments |
30 | 168 | (74 |
) |
409 |
- |
533 | |||||||||||
|
Other assets: (6) |
||||||||||||||||||
|
GLB direct embedded derivatives |
903 | (780 |
) |
- |
- |
- |
123 | |||||||||||
|
GLB ceded embedded derivatives |
51 | 21 |
- |
- |
- |
72 | ||||||||||||
|
Indexed annuity ceded embedded derivatives |
11 | (117 |
) |
- |
1,008 |
- |
902 | |||||||||||
|
Future contract benefits – indexed annuity |
||||||||||||||||||
|
and IUL contracts embedded derivatives (6) |
(1,418 |
) |
198 |
- |
(85 |
) |
- |
(1,305 |
) |
|||||||||
|
Other liabilities – GLB ceded embedded |
||||||||||||||||||
|
derivatives (6) |
(954 |
) |
758 |
- |
- |
- |
(196 |
) |
||||||||||
|
Total, net |
$ |
4,509 |
$ |
252 |
$ |
(274 |
) |
$ |
2,164 |
$ |
(451 |
) |
$ |
6,200 | ||||
66
|
|
||||||||||||||||||
|
|
For the Year Ended December 31, 2017 |
|||||||||||||||||
|
|
Gains |
Issuances, |
Transfers |
|||||||||||||||
|
|
Items |
(Losses) |
Sales, |
Into or |
||||||||||||||
|
|
Included |
in |
Maturities, |
Out |
||||||||||||||
|
|
Beginning |
in |
OCI |
Settlements, |
of |
Ending |
||||||||||||
|
|
Fair |
Net |
and |
Calls, |
Level 3, |
Fair |
||||||||||||
|
|
Value |
Income |
Other (1) |
Net |
Net (3) |
Value |
||||||||||||
|
Investments: (5) |
||||||||||||||||||
|
Fixed maturity AFS securities: |
||||||||||||||||||
|
Corporate bonds |
$ |
4,809 |
$ |
17 |
$ |
199 |
$ |
(45 |
) |
$ |
370 |
$ |
5,350 | |||||
|
ABS |
33 |
- |
- |
- |
(7 |
) |
26 | |||||||||||
|
U.S. government bonds |
- |
- |
- |
- |
5 | 5 | ||||||||||||
|
Foreign government bonds |
111 |
- |
(1 |
) |
- |
- |
110 | |||||||||||
|
RMBS |
3 |
- |
- |
19 | (10 |
) |
12 | |||||||||||
|
CMBS |
7 |
- |
1 | 54 | (56 |
) |
6 | |||||||||||
|
CLOs |
68 |
- |
- |
124 | (101 |
) |
91 | |||||||||||
|
State and municipal bonds |
- |
(1 |
) |
- |
- |
1 |
- |
|||||||||||
|
Hybrid and redeemable |
||||||||||||||||||
|
preferred securities |
76 |
- |
14 |
- |
(14 |
) |
76 | |||||||||||
|
Equity AFS securities |
177 | 1 | (3 |
) |
(13 |
) |
(1 |
) |
161 | |||||||||
|
Trading securities |
65 | 3 | 8 | (26 |
) |
(1 |
) |
49 | ||||||||||
|
Derivative investments |
(93 |
) |
(27 |
) |
127 | 23 |
- |
30 | ||||||||||
|
Other assets: (6) |
||||||||||||||||||
|
GLB direct embedded derivatives |
- |
903 |
- |
- |
- |
903 | ||||||||||||
|
GLB ceded embedded derivatives |
371 | (320 |
) |
- |
- |
- |
51 | |||||||||||
|
Indexed annuity ceded embedded derivatives |
- |
- |
- |
11 |
- |
11 | ||||||||||||
|
Future contract benefits – indexed annuity |
||||||||||||||||||
|
and IUL contracts embedded derivatives (6) |
(1,139 |
) |
(400 |
) |
- |
121 |
- |
(1,418 |
) |
|||||||||
|
Other liabilities: (6) |
||||||||||||||||||
|
GLB direct embedded derivatives |
(371 |
) |
371 |
- |
- |
- |
- |
|||||||||||
|
GLB ceded embedded derivatives |
- |
(954 |
) |
- |
- |
- |
(954 |
) |
||||||||||
|
Total, net |
$ |
4,117 |
$ |
(407 |
) |
$ |
345 |
$ |
268 |
$ |
186 |
$ |
4,509 | |||||
67
|
|
||||||||||||||||||
|
|
For the Year Ended December 31, 2016 |
|||||||||||||||||
|
|
Gains |
Issuances, |
Transfers |
|||||||||||||||
|
|
Items |
(Losses) |
Sales, |
Into or |
||||||||||||||
|
|
Included |
in |
Maturities, |
Out |
||||||||||||||
|
|
Beginning |
in |
OCI |
Settlements, |
of |
Ending |
||||||||||||
|
|
Fair |
Net |
and |
Calls, |
Level 3, |
Fair |
||||||||||||
|
|
Value |
Income |
Other (1) |
Net |
Net (3) |
Value |
||||||||||||
|
Investments: (5) |
||||||||||||||||||
|
Fixed maturity AFS securities: |
||||||||||||||||||
|
Corporate bonds |
$ |
4,273 |
$ |
4 |
$ |
(29 |
) |
$ |
159 |
$ |
402 |
$ |
4,809 | |||||
|
ABS |
45 |
- |
(1 |
) |
14 | (25 |
) |
33 | ||||||||||
|
U.S. government bonds |
- |
- |
- |
(2 |
) |
2 |
- |
|||||||||||
|
Foreign government bonds |
111 |
- |
- |
- |
- |
111 | ||||||||||||
|
RMBS |
1 |
- |
- |
54 | (52 |
) |
3 | |||||||||||
|
CMBS |
10 | 2 | (1 |
) |
27 | (31 |
) |
7 | ||||||||||
|
CLOs |
551 |
- |
- |
138 | (621 |
) |
68 | |||||||||||
|
Hybrid and redeemable |
||||||||||||||||||
|
preferred securities |
94 |
- |
(3 |
) |
(15 |
) |
- |
76 | ||||||||||
|
Equity AFS securities |
164 | 5 | (4 |
) |
12 |
- |
177 | |||||||||||
|
Trading securities |
73 | 3 |
- |
6 | (17 |
) |
65 | |||||||||||
|
Derivative investments |
555 | (483 |
) |
(1 |
) |
(164 |
) |
- |
(93 |
) |
||||||||
|
Other assets – GLB ceded |
||||||||||||||||||
|
embedded derivatives (6) |
952 | (581 |
) |
- |
- |
- |
371 | |||||||||||
|
Future contract benefits – indexed annuity |
||||||||||||||||||
|
and IUL contracts embedded derivatives (6) |
(1,100 |
) |
(120 |
) |
- |
81 |
- |
(1,139 |
) |
|||||||||
|
VIEs’ liabilities – derivative instruments (7) |
(4 |
) |
4 |
- |
- |
- |
- |
|||||||||||
|
Other liabilities: |
||||||||||||||||||
|
Credit default swaps (7) |
(9 |
) |
(6 |
) |
- |
15 |
- |
- |
||||||||||
|
GLB direct embedded derivatives (6) |
(952 |
) |
581 |
- |
- |
- |
(371 |
) |
||||||||||
|
Total, net |
$ |
4,764 |
$ |
(591 |
) |
$ |
(39 |
) |
$ |
325 |
$ |
(342 |
) |
$ |
4,117 | |||
|
(1) |
The changes in fair value of the interest rate swaps are offset by an adjustment to derivative investments (see Note 6). |
|
(2) |
Issuances, sales, maturities, settlements, calls, net, include financial instruments acquired from Liberty Life as follows: corporate bonds of $67 million and ABS of $17 million. |
|
(3) |
Transfers into or out of Level 3 for AFS and trading securities are reported at amortized cost as of the beginning-of-year. For AFS and trading securities, the difference between beginning-of-year amortized cost and beginning-of-year fair value was included in OCI and earnings, respectively, in the prior years. |
|
(4) |
Transfers into or out of Level 3 for FHLB stock between equity securities and other investments are displayed at cost on our Consolidated Balance Sheets. |
|
(5) |
Amortization and accretion of premiums and discounts are included in net investment income on our Consolidated Statements of Comprehensive Income (Loss). Gains (losses) from sales, maturities, settlements and calls and OTTI are included in realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss). |
|
(6) |
Gains (losses) from sales, maturities, settlements and calls are included in realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss). |
|
(7) |
The changes in fair value of the credit default swaps and contingency forwards are included in realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss). |
68
The following provides the components of the items included in issuances, sales, maturities, settlements and calls, net, excluding any effect of amortization of DAC, VOBA, DSI and DFEL and changes in future contract benefits, (in millions) as reported above:
|
|
||||||||||||||||||
|
|
For the Year Ended December 31, 2018 |
|||||||||||||||||
|
|
Issuances |
Sales |
Maturities |
Settlements |
Calls |
Total |
||||||||||||
|
Investments: |
||||||||||||||||||
|
Fixed maturity AFS securities: |
||||||||||||||||||
|
Corporate bonds |
$ |
1,068 |
$ |
(171 |
) |
$ |
(3 |
) |
$ |
(275 |
) |
$ |
(77 |
) |
$ |
542 | ||
|
ABS |
22 | (17 |
) |
- |
- |
- |
5 | |||||||||||
|
U.S. government bonds |
- |
(5 |
) |
- |
- |
- |
(5 |
) |
||||||||||
|
RMBS |
7 |
- |
- |
- |
- |
7 | ||||||||||||
|
CMBS |
39 |
- |
- |
(4 |
) |
- |
35 | |||||||||||
|
CLOs |
218 |
- |
- |
- |
- |
218 | ||||||||||||
|
Trading securities |
54 | (24 |
) |
- |
- |
- |
30 | |||||||||||
|
Equity securities |
1 | (1 |
) |
- |
- |
- |
- |
|||||||||||
|
Derivative investments |
365 | 465 | (421 |
) |
- |
- |
409 | |||||||||||
|
Other assets – indexed annuity ceded |
||||||||||||||||||
|
embedded derivatives |
1,030 |
- |
- |
(22 |
) |
- |
1,008 | |||||||||||
|
Future contract benefits – indexed annuity |
||||||||||||||||||
|
and IUL contracts embedded derivatives |
(284 |
) |
- |
- |
199 |
- |
(85 |
) |
||||||||||
|
Total, net |
$ |
2,520 |
$ |
247 |
$ |
(424 |
) |
$ |
(102 |
) |
$ |
(77 |
) |
$ |
2,164 | |||
|
|
||||||||||||||||||
|
|
For the Year Ended December 31, 2017 |
|||||||||||||||||
|
|
Issuances |
Sales |
Maturities |
Settlements |
Calls |
Total |
||||||||||||
|
Investments: |
||||||||||||||||||
|
Fixed maturity AFS securities: |
||||||||||||||||||
|
Corporate bonds |
$ |
850 |
$ |
(448 |
) |
$ |
(98 |
) |
$ |
(205 |
) |
$ |
(144 |
) |
$ |
(45 |
) |
|
|
RMBS |
19 |
- |
- |
- |
- |
19 | ||||||||||||
|
CMBS |
55 |
- |
- |
(1 |
) |
- |
54 | |||||||||||
|
CLOs |
124 |
- |
- |
- |
- |
124 | ||||||||||||
|
Equity AFS securities |
18 | (31 |
) |
- |
- |
- |
(13 |
) |
||||||||||
|
Trading securities |
2 | (27 |
) |
- |
(1 |
) |
- |
(26 |
) |
|||||||||
|
Derivative investments |
197 | 233 | (407 |
) |
- |
- |
23 | |||||||||||
|
Other assets – indexed annuity ceded |
||||||||||||||||||
|
embedded derivatives |
11 |
- |
- |
- |
- |
11 | ||||||||||||
|
Future contract benefits – indexed annuity |
||||||||||||||||||
|
and IUL contracts embedded derivatives |
(71 |
) |
- |
- |
192 |
- |
121 | |||||||||||
|
Total, net |
$ |
1,205 |
$ |
(273 |
) |
$ |
(505 |
) |
$ |
(15 |
) |
$ |
(144 |
) |
$ |
268 | ||
|
|
||||||||||||||||||
69
|
|
||||||||||||||||||
|
|
For the Year Ended December 31, 2016 |
|||||||||||||||||
|
|
Issuances |
Sales |
Maturities |
Settlements |
Calls |
Total |
||||||||||||
|
Investments: |
||||||||||||||||||
|
Fixed maturity AFS securities: |
||||||||||||||||||
|
Corporate bonds |
$ |
560 |
$ |
(62 |
) |
$ |
(23 |
) |
$ |
(176 |
) |
$ |
(140 |
) |
$ |
159 | ||
|
ABS |
15 |
- |
- |
(1 |
) |
- |
14 | |||||||||||
|
U.S. government bonds |
- |
- |
- |
(2 |
) |
- |
(2 |
) |
||||||||||
|
RMBS |
54 |
- |
- |
- |
- |
54 | ||||||||||||
|
CMBS |
31 | (1 |
) |
- |
(3 |
) |
- |
27 | ||||||||||
|
CLOs |
140 |
- |
- |
(2 |
) |
- |
138 | |||||||||||
|
Hybrid and redeemable preferred |
||||||||||||||||||
|
securities |
- |
(15 |
) |
- |
- |
- |
(15 |
) |
||||||||||
|
Equity AFS securities |
18 | (6 |
) |
- |
- |
- |
12 | |||||||||||
|
Trading securities |
7 |
- |
- |
(1 |
) |
- |
6 | |||||||||||
|
Derivative investments |
176 | (169 |
) |
(171 |
) |
- |
- |
(164 |
) |
|||||||||
|
Future contract benefits – indexed annuity |
||||||||||||||||||
|
and IUL contracts embedded derivatives |
(70 |
) |
- |
- |
151 |
- |
81 | |||||||||||
|
Other liabilities – credit default swaps |
- |
15 |
- |
- |
- |
15 | ||||||||||||
|
Total, net |
$ |
931 |
$ |
(238 |
) |
$ |
(194 |
) |
$ |
(34 |
) |
$ |
(140 |
) |
$ |
325 | ||
The following summarizes changes in unrealized gains (losses) included in net income, excluding any effect of amortization of DAC, VOBA, DSI and DFEL and changes in future contract benefits, related to financial instruments carried at fair value classified within Level 3 that we still held (in millions):
|
|
|||||||||
|
|
For the Years Ended December 31, |
||||||||
|
|
2018 |
2017 |
2016 |
||||||
|
Derivative investments |
$ |
90 |
$ |
(266 |
) |
$ |
(432 |
) |
|
|
Embedded derivatives: |
|||||||||
|
Indexed annuity and IUL contracts |
(38 |
) |
(14 |
) |
(16 |
) |
|||
|
Other assets – GLB direct and ceded |
(75 |
) |
1,904 | 1,122 | |||||
|
Other liabilities – GLB direct and ceded |
75 | (1,904 |
) |
(1,122 |
) |
||||
|
VIEs’ liabilities – derivative instruments |
- |
- |
4 | ||||||
|
Total, net (1) |
$ |
52 |
$ |
(280 |
) |
$ |
(444 |
) |
|
|
(1) |
Included in realized gain (loss) on our Consolidated Statements of Comprehensive Income (Loss). |
The following provides the components of the transfers into and out of Level 3 (in millions) as reported above:
|
|
|||||||||
|
|
For the Year Ended December 31, 2018 |
||||||||
|
|
Transfers |
Transfers |
|||||||
|
|
Into |
Out of |
|||||||
|
|
Level 3 |
Level 3 |
Total |
||||||
|
Investments: |
|||||||||
|
Fixed maturity AFS securities: |
|||||||||
|
Corporate bonds |
$ |
78 |
$ |
(130 |
) |
$ |
(52 |
) |
|
|
ABS |
- |
(2 |
) |
(2 |
) |
||||
|
RMBS |
- |
(12 |
) |
(12 |
) |
||||
|
CMBS |
1 | (40 |
) |
(39 |
) |
||||
|
CLOs |
- |
(204 |
) |
(204 |
) |
||||
|
Equity AFS securities |
- |
(161 |
) |
(161 |
) |
||||
|
Trading securities |
- |
(7 |
) |
(7 |
) |
||||
|
Equity securities |
26 |
- |
26 | ||||||
|
Total, net |
$ |
105 |
$ |
(556 |
) |
$ |
(451 |
) |
|
70
|
|
|||||||||
|
|
For the Year Ended December 31, 2017 |
||||||||
|
|
Transfers |
Transfers |
|||||||
|
|
Into |
Out of |
|||||||
|
|
Level 3 |
Level 3 |
Total |
||||||
|
Investments: |
|||||||||
|
Fixed maturity AFS securities: |
|||||||||
|
Corporate bonds |
$ |
458 |
$ |
(88 |
) |
$ |
370 | ||
|
ABS |
14 | (21 |
) |
(7 |
) |
||||
|
U.S. government bonds |
5 |
- |
5 | ||||||
|
RMBS |
- |
(10 |
) |
(10 |
) |
||||
|
CMBS |
3 | (59 |
) |
(56 |
) |
||||
|
CLOs |
30 | (131 |
) |
(101 |
) |
||||
|
State and municipal bonds |
2 | (1 |
) |
1 | |||||
|
Hybrid and redeemable preferred securities |
- |
(14 |
) |
(14 |
) |
||||
|
Equity AFS securities |
- |
(1 |
) |
(1 |
) |
||||
|
Trading securities |
4 | (5 |
) |
(1 |
) |
||||
|
Total, net |
$ |
516 |
$ |
(330 |
) |
$ |
186 | ||
|
|
|||||||||
|
|
For the Year Ended December 31, 2016 |
||||||||
|
|
Transfers |
Transfers |
|||||||
|
|
Into |
Out of |
|||||||
|
|
Level 3 |
Level 3 |
Total |
||||||
|
Investments: |
|||||||||
|
Fixed maturity AFS securities: |
|||||||||
|
Corporate bonds |
$ |
605 |
$ |
(203 |
) |
$ |
402 | ||
|
ABS |
3 | (28 |
) |
(25 |
) |
||||
|
U.S. government bonds |
9 | (7 |
) |
2 | |||||
|
RMBS |
2 | (54 |
) |
(52 |
) |
||||
|
CMBS |
- |
(31 |
) |
(31 |
) |
||||
|
CLOs |
- |
(621 |
) |
(621 |
) |
||||
|
Trading securities |
1 | (18 |
) |
(17 |
) |
||||
|
Total, net |
$ |
620 |
$ |
(962 |
) |
$ |
(342 |
) |
|
Transfers into and out of Level 3 are generally the result of observable market information on a security no longer being available or becoming available to our pricing vendors. For the years ended December 31, 2018, 2017 and 2016, transfers in and out of Level 3 were attributable primarily to the securities’ observable market information no longer being available or becoming available. In 2018, transfers into or out of Level 3 also include FHLB stock between equity securities and other investments at cost on our Consolidated Balance Sheets. Transfers into and out of Levels 1 and 2 are generally the result of a change in the type of input used to measure the fair value of an asset or liability at the end of the reporting period. When quoted prices in active markets become available, transfers from Level 2 to Level 1 will result. When quoted prices in active markets become unavailable, but we are able to employ a valuation methodology using significant observable inputs, transfers from Level 1 to Level 2 will result. For the years ended December 31, 2018, 2017 and 2016, the transfers between Levels 1 and 2 of the fair value hierarchy were less than $1 million for our financial instruments carried at fair value.
71
The following summarizes the fair value (in millions), valuation techniques and significant unobservable inputs of the Level 3 fair value measurements as of December 31, 2018:
|
|
||||||||||||||||
|
|
Fair |
Valuation |
Significant |
Assumption or |
||||||||||||
|
|
Value |
Technique |
Unobservable Inputs |
Input Ranges |
||||||||||||
|
Assets |
||||||||||||||||
|
Investments: |
||||||||||||||||
|
Fixed maturity AFS and trading |
||||||||||||||||
|
securities: |
||||||||||||||||
|
Corporate bonds |
$ |
2,456 |
Discounted cash flow |
Liquidity/duration adjustment (1) |
0.6 |
% |
- |
28.6 |
% |
|||||||
|
ABS |
23 |
Discounted cash flow |
Liquidity/duration adjustment (1) |
2.9 |
% |
- |
2.9 |
% |
||||||||
|
Foreign government bonds |
77 |
Discounted cash flow |
Liquidity/duration adjustment (1) |
1.3 |
% |
- |
1.3 |
% |
||||||||
|
Hybrid and redeemable |
||||||||||||||||
|
preferred securities |
4 |
Discounted cash flow |
Liquidity/duration adjustment (1) |
1.6 |
% |
- |
1.6 |
% |
||||||||
|
Equity securities |
20 |
Discounted cash flow |
Liquidity/duration adjustment (1) |
4.5 |
% |
- |
5.4 |
% |
||||||||
|
Other assets: |
||||||||||||||||
|
GLB direct and ceded |
||||||||||||||||
|
embedded derivatives |
195 |
Discounted cash flow |
Long-term lapse rate (2) |
1 |
% |
- |
30 |
% |
||||||||
|
|
Utilization of guaranteed withdrawals (3) |
85 |
% |
- |
100 |
% |
||||||||||
|
|
Claims utilization factor (4) |
60 |
% |
- |
100 |
% |
||||||||||
|
|
Premiums utilization factor (4) |
80 |
% |
- |
115 |
% |
||||||||||
|
|
NPR (5) |
0.03 |
% |
- |
0.41 |
% |
||||||||||
|
|
Mortality rate (6) |
(8) |
||||||||||||||
|
|
Volatility (7) |
1 |
% |
- |
29 |
% |
||||||||||
|
|
||||||||||||||||
|
Indexed annuity ceded |
||||||||||||||||
|
embedded derivatives |
902 |
Discounted cash flow |
Lapse rate (2) |
1 |
% |
- |
9 |
% |
||||||||
|
|
Mortality rate (6) |
(8) |
||||||||||||||
|
Liabilities |
||||||||||||||||
|
Future contract benefits – indexed |
||||||||||||||||
|
annuity and IUL contracts |
||||||||||||||||
|
embedded derivatives |
$ |
(1,305 |
) |
Discounted cash flow |
Lapse rate (2) |
1 |
% |
- |
9 |
% |
||||||
|
|
Mortality rate (6) |
(8) |
||||||||||||||
|
Other liabilities – GLB ceded |
||||||||||||||||
|
embedded derivatives |
(196 |
) |
Discounted cash flow |
Long-term lapse rate (2) |
1 |
% |
- |
30 |
% |
|||||||
|
|
Utilization of guaranteed withdrawals (3) |
85 |
% |
- |
100 |
% |
||||||||||
|
|
Claims utilization factor (4) |
60 |
% |
- |
100 |
% |
||||||||||
|
|
Premiums utilization factor (4) |
80 |
% |
- |
115 |
% |
||||||||||
|
|
NPR (5) |
0.03 |
% |
- |
0.41 |
% |
||||||||||
|
|
Mortality rate (6) |
(8) |
||||||||||||||
|
|
Volatility (7) |
1 |
% |
- |
29 |
% |
||||||||||
|
(1) |
The liquidity/duration adjustment input represents an estimated market participant composite of adjustments attributable to liquidity premiums, expected durations, structures and credit quality that would be applied to the market observable information of an investment. |
|
(2) |
The lapse rate input represents the estimated probability of a contract surrendering during a year, and thereby forgoing any future benefits. The range for indexed annuity and IUL contracts represents the lapse rates during the surrender charge period. |
|
(3) |
The utilization of guaranteed withdrawals input represents the estimated percentage of contract holders that utilize the guaranteed withdrawal feature. |
|
(4) |
The utilization factors are applied to the present value of claims or premiums, as appropriate, in the GLB reserve calculation to estimate the impact of inefficient withdrawal behavior, including taking less than or more than the maximum guaranteed withdrawal. |
|
(5) |
The NPR input represents the estimated additional credit spread that market participants would apply to the market observable discount rate when pricing a contract. |
|
(6) |
The mortality rate input represents the estimated probability of when an individual belonging to a particular group, categorized according to age or some other factor such as gender, will die. |
|
(7) |
The volatility input represents overall volatilities assumed for the underlying variable annuity funds, which include a mixture of equity and fixed-income assets. Fair value of the variable annuity GLB embedded derivatives would increase if higher volatilities were used for valuation. |
|
(8) |
The mortality rate is based on a combination of company and industry experience, adjusted for improvement factors. |
72
From the table above, we have excluded Level 3 fair value measurements obtained from independent, third-party pricing sources. We do not develop the significant inputs used to measure the fair value of these assets and liabilities, and the information regarding the significant inputs is not readily available to us. Independent broker-quoted fair values are non-binding quotes developed by market makers or broker-dealers obtained from third-party sources recognized as market participants. The fair value of a broker-quoted asset or liability is based solely on the receipt of an updated quote from a single market maker or a broker-dealer recognized as a market participant as we do not adjust broker quotes when used as the fair value measurement for an asset or liability. Significant increases or decreases in any of the quotes received from a third-party broker-dealer may result in a significantly higher or lower fair value measurement.
Changes in any of the significant inputs presented in the table above may result in a significant change in the fair value measurement of the asset or liability as follows:
|
· |
Investments – An increase in the liquidity/duration adjustment input would result in a decrease in the fair value measurement. |
|
· |
Indexed annuity and IUL contracts embedded derivatives – For direct embedded derivatives, an increase in the lapse rate or mortality rate inputs would result in a decrease in the fair value measurement. |
|
· |
GLB embedded derivatives – Assuming our GLB direct embedded derivatives are in a liability position: an increase in our lapse rate, NPR or mortality rate inputs would result in a decrease in the fair value measurement; and an increase in the utilization of guaranteed withdrawal or volatility inputs would result in an increase in the fair value measurement. |
For each category discussed above, the unobservable inputs are not inter-related; therefore, a directional change in one input will not affect the other inputs.
As part of our ongoing valuation process, we assess the reasonableness of our valuation techniques or models and make adjustments as necessary. For more information, see “Summary of Significant Accounting Policies” above.
21. Segment Information
We provide products and services and report results through our Annuities, Retirement Plan Services, Life Insurance and Group Protection segments. As discussed in Note 3, we completed the acquisition of Liberty Life during the second quarter of 2018. Related results are included within the Group Protection segment. We also have Other Operations, which includes the financial data for operations that are not directly related to the business segments. Our reporting segments reflect the manner by which our chief operating decision makers view and manage the business. The following is a brief description of these segments and Other Operations.
The Annuities segment provides tax-deferred investment growth and lifetime income opportunities for its clients by offering fixed (including indexed) and variable annuities.
The Retirement Plan Services segment provides employer-sponsored defined benefit and individual retirement accounts, as well as individual and group variable annuities, group fixed annuities and mutual-fund based programs in the retirement plan marketplace.
The Life Insurance segment focuses in the creation and protection of wealth through life insurance products, including term insurance, a linked-benefit product (which is a UL policy linked with riders that provide for long-term care costs), IUL and both single and survivorship versions of UL and VUL, including corporate-owned UL and VUL insurance and bank-owned UL and VUL insurance products.
The Group Protection segment offers group non-medical insurance products, including short and long-disability, absence management services, term life, dental, vision and accident and critical illness benefits and services to the employer marketplace through various forms of employee-paid and employer-paid plans.
Other Operations includes investments related to our excess capital; benefit plan net liability; the unamortized deferred gain on indemnity reinsurance related to the sale of reinsurance; the results of certain disability income business; our run-off institutional pension business, the majority of which was sold on a group annuity basis; debt costs; strategic digitization expense; and other corporate investments.
Segment operating revenues and income (loss) from operations are internal measures used by our management and Board of Directors to evaluate and assess the results of our segments. Income (loss) from operations is GAAP net income excluding the after-tax effects of the following items, as applicable:
|
· |
Realized gains and losses associated with the following (“excluded realized gain (loss)”): |
|
§ |
Sales or disposals and impairments of securities; |
|
§ |
Changes in the fair value of derivatives, embedded derivatives within certain reinsurance arrangements and trading securities; |
|
§ |
GLB rider fees ceded to LNBAR; |
|
§ |
The net valuation premium of the GLB attributed rider fees; |
73
|
§ |
Changes in the fair value of the embedded derivative liabilities related to index call options we may purchase in the future to hedge contract holder index allocations applicable to future reset periods for our indexed annuity products accounted for at fair value; and |
|
§ |
Changes in the fair value of equity securities; |
|
· |
Income (loss) from reserve changes, net of related amortization, on business sold through reinsurance; |
|
· |
Gains (losses) on early extinguishment of debt; |
|
· |
Losses from the impairment of intangible assets; |
|
· |
Income (loss) from discontinued operations; |
|
· |
Acquisition and integration costs related to mergers and acquisitions; and |
|
· |
Income (loss) from the initial adoption of new accounting standards, regulations, and policy changes including the net impact from the Tax Cuts and Jobs Act. |
Operating revenues represent GAAP revenues excluding the pre-tax effects of the following items, as applicable:
|
· |
Excluded realized gain (loss); |
|
· |
Revenue adjustments from the initial adoption of new accounting standards; |
|
· |
Amortization of DFEL arising from changes in GDB and GLB benefit ratio unlocking; and |
|
· |
Amortization of deferred gains arising from reserve changes on business sold through reinsurance. |
We use our prevailing corporate federal income tax rates of 21% and 35%, where applicable, while taking into account any permanent differences for events recognized differently in our financial statements and federal income tax returns when reconciling our segment measures of performance to the GAAP measures presented in our consolidated results of operations. Operating revenues and income (loss) from operations do not replace revenues and net income as the GAAP measures of our consolidated results of operations.
Segment information (in millions) was as follows:
|
|
|||||||||
|
|
For the Years Ended December 31, |
||||||||
|
|
2018 |
2017 |
2016 |
||||||
|
Revenues |
|||||||||
|
Operating revenues: |
|||||||||
|
Annuities |
$ |
4,025 |
$ |
4,034 |
$ |
3,710 | |||
|
Retirement Plan Services |
1,164 | 1,152 | 1,092 | ||||||
|
Life Insurance |
6,489 | 6,128 | 5,798 | ||||||
|
Group Protection |
3,756 | 2,200 | 2,129 | ||||||
|
Other Operations |
209 | 263 | 301 | ||||||
|
Excluded realized gain (loss), pre-tax |
(285 |
) |
(630 |
) |
(690 |
) |
|||
|
Amortization of deferred gain arising from reserve changes |
|||||||||
|
on business sold through reinsurance, pre-tax |
- |
1 | 3 | ||||||
|
Total revenues |
$ |
15,358 |
$ |
13,148 |
$ |
12,343 | |||
|
|
|||||||||
|
|
For the Years Ended December 31, |
||||||||
|
|
2018 |
2017 |
2016 |
||||||
|
Net Income (Loss) |
|||||||||
|
Income (loss) from operations: |
|||||||||
|
Annuities |
$ |
1,122 |
$ |
1,072 |
$ |
971 | |||
|
Retirement Plan Services |
160 | 142 | 121 | ||||||
|
Life Insurance |
530 | 522 | 464 | ||||||
|
Group Protection |
186 | 103 | 65 | ||||||
|
Other Operations |
(130 |
) |
(30 |
) |
- |
||||
|
Excluded realized gain (loss), after-tax |
(225 |
) |
(409 |
) |
(450 |
) |
|||
|
Gain (loss) on early extinguishment of debt, after-tax |
- |
(3 |
) |
- |
|||||
|
Income (loss) from reserve changes (net of related amortization) |
|||||||||
|
on business sold through reinsurance, after-tax |
- |
- |
2 | ||||||
|
Net impact from the Tax Cuts and Jobs Act |
(3 |
) |
1,526 |
- |
|||||
|
Impairment of intangibles, after-tax |
- |
(905 |
) |
- |
|||||
|
Acquisition and integration costs related to mergers and acquisitions, after-tax |
(67 |
) |
- |
- |
|||||
|
Net income (loss) |
$ |
1,573 |
$ |
2,018 |
$ |
1,173 | |||
74
|
|
|||||||||
|
|
For the Years Ended December 31, |
||||||||
|
|
2018 |
2017 |
2016 |
||||||
|
Net Investment Income |
|||||||||
|
Annuities |
$ |
947 |
$ |
982 |
$ |
983 | |||
|
Retirement Plan Services |
892 | 893 | 855 | ||||||
|
Life Insurance |
2,546 | 2,496 | 2,403 | ||||||
|
Group Protection |
259 | 167 | 176 | ||||||
|
Other Operations |
200 | 222 | 214 | ||||||
|
Total net investment income |
$ |
4,844 |
$ |
4,760 |
$ |
4,631 | |||
|
|
|||||||||
|
|
For the Years Ended December 31, |
||||||||
|
|
2018 |
2017 |
2016 |
||||||
|
Amortization of DAC and VOBA, Net of Interest |
|||||||||
|
Annuities |
$ |
347 |
$ |
402 |
$ |
310 | |||
|
Retirement Plan Services |
27 | 26 | 27 | ||||||
|
Life Insurance |
701 | 455 | 709 | ||||||
|
Group Protection |
92 | 79 | 126 | ||||||
|
Total amortization of DAC and VOBA, net of interest |
$ |
1,167 |
$ |
962 |
$ |
1,172 | |||
|
|
|||||||||
|
|
For the Years Ended December 31, |
||||||||
|
|
2018 |
2017 |
2016 |
||||||
|
Federal Income Tax Expense (Benefit) |
|||||||||
|
Annuities |
$ |
187 |
$ |
198 |
$ |
261 | |||
|
Retirement Plan Services |
28 | 50 | 43 | ||||||
|
Life Insurance |
116 | 236 | 210 | ||||||
|
Group Protection |
50 | 55 | 35 | ||||||
|
Other Operations |
(48 |
) |
(78 |
) |
(42 |
) |
|||
|
Excluded realized gain (loss) |
(61 |
) |
(220 |
) |
(241 |
) |
|||
|
Gain (loss) on early extinguishment of debt |
- |
(2 |
) |
- |
|||||
|
Reserve changes (net of related amortization) |
|||||||||
|
on business sold through reinsurance |
- |
- |
1 | ||||||
|
Net impact from the Tax Cuts and Jobs Act |
3 | (1,526 |
) |
- |
|||||
|
Acquisition and integration costs related to |
|||||||||
|
mergers and acquisitions |
(18 |
) |
|||||||
|
Total federal income tax expense (benefit) |
$ |
257 |
$ |
(1,287 |
) |
$ |
267 | ||
|
|
||||||
|
|
As of December 31, |
|||||
|
|
2018 |
2017 |
||||
|
Assets |
||||||
|
Annuities |
$ |
145,462 |
$ |
144,035 | ||
|
Retirement Plan Services |
35,742 | 37,077 | ||||
|
Life Insurance |
82,153 | 81,565 | ||||
|
Group Protection |
8,495 | 4,033 | ||||
|
Other Operations |
27,293 | 15,162 | ||||
|
Total assets |
$ |
299,145 |
$ |
281,872 | ||
75
Revenue from Contracts with Customers
As discussed in Note 2, we adopted ASU 2014-09, Revenue from Contracts with Customers, as of January 1, 2018, that applies primarily to commissions and advisory fees earned by our broker dealer operation. The following table illustrates the revenue recognized from contracts with customers reported within fee income and other revenues on our Consolidated Statements of Comprehensive Income (Loss) and timing of revenue recognition by segment (in millions):
|
|
For the Year Ended December 31, 2018 |
|||||||||||||||||
|
|
Retirement |
|||||||||||||||||
|
|
Plan |
Life |
Group |
Other |
||||||||||||||
|
|
Annuities |
Services |
Insurance |
Protection |
Operations |
Total |
||||||||||||
|
Revenue from Contracts with Customers |
||||||||||||||||||
|
Fee income |
$ |
534 |
$ |
167 |
$ |
22 |
$ |
- |
$ |
- |
$ |
723 | ||||||
|
Other revenues |
372 | 17 | 10 | 114 |
- |
513 | ||||||||||||
|
Total revenue from contracts |
||||||||||||||||||
|
with customers |
$ |
906 |
$ |
184 |
$ |
32 |
$ |
114 |
$ |
- |
$ |
1,236 | ||||||
|
|
||||||||||||||||||
|
Timing of Revenue Recognition |
||||||||||||||||||
|
Satisfaction of performance obligation: |
||||||||||||||||||
|
Transferred at a point in time |
$ |
24 |
$ |
5 |
$ |
7 |
$ |
- |
$ |
- |
$ |
36 | ||||||
|
Transferred over time |
882 | 179 | 25 | 114 |
- |
1,200 | ||||||||||||
|
Total revenue from contracts |
||||||||||||||||||
|
with customers |
$ |
906 |
$ |
184 |
$ |
32 |
$ |
114 |
$ |
- |
$ |
1,236 | ||||||
|
|
||||||||||||||||||
Revenue recognized from contracts with customers included in fee income consists primarily of wholesaling-related 12b-1 fees and net investment advisory fees. The 12b-1 fees are received from separate account fund sponsors as compensation for servicing the underlying mutual funds. The net investment advisory fees are related to asset management of certain separate account funds. Such revenues are recorded based on a contractual percentage of the market value of mutual fund assets over the period shares are owned by customers, and on a contractual percentage of the customer’s managed assets over the period advisory services are provided, respectively.
Revenue recognized from contracts with customers included in other revenues primarily relates to our retail sales network and consists of commission revenue for the sale of non-affiliated securities recorded on a trade-date basis and advisory fee income. Advisory fee income is asset-based revenues recorded as earned based on a contractual percentage of customer account values. Other revenues earned by our Group Protection segment consist of fees from administrative services performed, which are recognized as performance obligations are met over the terms of the underlying agreements.
22. Supplemental Disclosures of Cash Flow Data
The following summarizes our supplemental cash flow data (in millions):
|
|
|||||||||
|
|
For the Years Ended December 31, |
||||||||
|
|
2018 |
2017 |
2016 |
||||||
|
Interest paid |
$ |
154 |
$ |
123 |
$ |
91 | |||
|
Income taxes paid (received) |
192 | 215 | 121 | ||||||
|
Significant non-cash investing and financing transactions: |
|||||||||
|
Acquisition of note receivable from affiliate |
31 | 74 | 42 | ||||||
|
Investments received in financing transactions |
263 |
- |
- |
||||||
|
Exchange of surplus note for promissory note with affiliate: |
|||||||||
|
Carrying value of asset |
58 | 109 | 124 | ||||||
|
Carrying value of liability |
(58 |
) |
(109 |
) |
(124 |
) |
|||
|
Net asset (liability) from exchange |
$ |
- |
$ |
- |
$ |
- |
|||
76
23. Quarterly Results of Operations (Unaudited)
The unaudited quarterly results of operations (in millions) were as follows:
|
|
|||||||||||||||
|
|
For the Three Months Ended |
||||||||||||||
|
|
March 31, |
June 30, |
September 30, |
December 31, (1) |
|||||||||||
|
2018 |
|||||||||||||||
|
Total revenues |
$ |
3,404 |
$ |
3,852 |
$ |
4,039 |
$ |
4,063 | |||||||
|
Total expenses |
2,921 | 3,357 | 3,619 | 3,631 | |||||||||||
|
Net income (loss) |
407 | 420 | 378 | 368 | |||||||||||
|
|
|||||||||||||||
|
2017 |
|||||||||||||||
|
Total revenues |
$ |
3,229 |
$ |
3,237 |
$ |
3,269 |
$ |
3,413 | |||||||
|
Total expenses |
2,881 | 2,840 | 2,809 | 3,887 | |||||||||||
|
Net income (loss) |
349 | 321 | 385 | 963 | |||||||||||
(1)Fourth quarter 2017 results include a goodwill impairment charge and the impacts of remeasuring our existing deferred tax balances for the impact of the Tax Act as disclosed elsewhere herein.
77
24. Transactions with Affiliates
The following summarizes transactions with affiliates (in millions) and the associated line item on our Consolidated Balance Sheets:
|
|
As of December 31, |
|||||||||||||||||||||
|
|
2018 |
2017 |
||||||||||||||||||||
|
Assets with affiliates: |
||||||||||||||||||||||
|
Inter-company notes |
$ |
1,512 |
$ |
1,444 |
Fixed maturity AFS securities |
|||||||||||||||||
|
Limited partnerships |
- |
(66 |
) |
Other investments |
||||||||||||||||||
|
Ceded reinsurance contracts |
(188 |
) |
(188 |
) |
Deferred acquisition costs and value of |
|||||||||||||||||
|
|
business acquired |
|||||||||||||||||||||
|
Accrued inter-company interest receivable |
11 | 8 |
Accrued investment income |
|||||||||||||||||||
|
Ceded reinsurance contracts |
2,574 | 2,152 |
Reinsurance recoverables |
|||||||||||||||||||
|
Ceded reinsurance contracts |
191 | 8 |
Reinsurance related embedded derivatives |
|||||||||||||||||||
|
Ceded reinsurance contracts |
235 | 244 |
Other assets |
|||||||||||||||||||
|
Cash management agreement |
112 | 441 |
Other assets |
|||||||||||||||||||
|
Service agreement receivable |
5 | 15 |
Other assets |
|||||||||||||||||||
|
|
||||||||||||||||||||||
|
Liabilities with affiliates: |
||||||||||||||||||||||
|
Assumed reinsurance contracts |
29 | 32 |
Future contract benefits |
|||||||||||||||||||
|
Assumed reinsurance contracts |
400 | 400 |
Other contract holder funds |
|||||||||||||||||||
|
Ceded reinsurance contracts |
(46 |
) |
(47 |
) |
Other contract holder funds |
|||||||||||||||||
|
Inter-company short-term debt |
288 | 10 |
Short-term debt |
|||||||||||||||||||
|
Inter-company long-term debt |
2,401 | 2,374 |
Long-term debt |
|||||||||||||||||||
|
Ceded reinsurance contracts |
3,120 | 2,587 |
Funds withheld reinsurance liabilities |
|||||||||||||||||||
|
Ceded reinsurance contracts |
325 | 1,023 |
Other liabilities |
|||||||||||||||||||
|
Accrued inter-company interest payable |
13 | 29 |
Other liabilities |
|||||||||||||||||||
|
Service agreement payable |
56 | 8 |
Other liabilities |
|||||||||||||||||||
|
|
||||||||||||||||||||||
The following summarizes transactions with affiliates (in millions) and the associated line item on our Consolidated Statements of Comprehensive Income (Loss):
|
|
For the Years Ended |
||||||||||||||||||
|
|
December 31, |
||||||||||||||||||
|
|
2018 |
2017 |
2016 |
||||||||||||||||
|
Revenues with affiliates: |
|||||||||||||||||||
|
Premiums received on assumed (paid on ceded) |
$ |
(404 |
) |
$ |
(393 |
) |
$ |
(389 |
) |
Insurance premiums |
|||||||||
|
reinsurance contracts |
|||||||||||||||||||
|
Fees for management of general account |
(106 |
) |
(100 |
) |
(117 |
) |
Net investment income |
||||||||||||
|
Net investment income on ceded funds withheld treaties |
(123 |
) |
(84 |
) |
(69 |
) |
Net investment income |
||||||||||||
|
Net investment income on inter-company notes |
49 | 42 | 38 |
Net investment income |
|||||||||||||||
|
Realized gains (losses) on ceded reinsurance contracts: |
|||||||||||||||||||
|
GLB reserves embedded derivatives |
709 | (1,055 |
) |
(516 |
) |
Realized gain (loss) |
|||||||||||||
|
Other gains (losses) |
237 | (150 |
) |
(93 |
) |
Realized gain (loss) |
|||||||||||||
|
Reinsurance related settlements |
(1,189 |
) |
951 | 488 |
Realized gain (loss) |
||||||||||||||
|
Amortization of deferred gain on reinsurance contracts |
(5 |
) |
(5 |
) |
(5 |
) |
Amortization of deferred gain |
||||||||||||
|
|
on business sold through |
||||||||||||||||||
|
|
reinsurance |
||||||||||||||||||
|
Benefits and expenses with affiliates: |
|||||||||||||||||||
|
Interest credited on assumed reinsurance contracts |
57 | 67 | 61 |
Interest credited |
|||||||||||||||
|
Reinsurance (recoveries) benefits on ceded reinsurance |
(610 |
) |
(299 |
) |
(424 |
) |
Benefits |
||||||||||||
|
Ceded reinsurance contracts |
(8 |
) |
(12 |
) |
(14 |
) |
Commissions and other |
||||||||||||
|
|
expenses |
||||||||||||||||||
|
Service agreement payments |
3 | 3 | 76 |
Commissions and other |
|||||||||||||||
|
|
expenses |
||||||||||||||||||
|
Interest expense on inter-company debt |
126 | 120 | 111 |
Interest and debt expense |
|||||||||||||||
78
Inter-Company Notes
LNC issues inter-company notes to us for a predetermined face value to be repaid by LNC at a predetermined maturity with a specified interest rate.
Cash Management Agreement
In order to manage our capital more efficiently, we participate in an inter-company cash management program where LNC can lend to or borrow from us to meet short-term borrowing needs. The cash management program is essentially a series of demand loans, which are permitted under applicable insurance laws, among LNC and its affiliates that reduces overall borrowing costs by allowing LNC and its subsidiaries to access internal resources instead of incurring third-party transaction costs. The borrowing and lending limit is currently 3% of our admitted assets as of December 31, 2018.
Service Agreement
In accordance with service agreements with LNC and other subsidiaries of LNC for personnel and facilities usage, general management services and investment management services, we receive services from and provide services to affiliated companies and receive an allocation of corporate overhead. Corporate overhead expenses are allocated based on specific methodologies for each function. The majority of the expenses are allocated based on the following methodologies: headcount, capital, investments by product, assets under management, weighted policies in force and sales.
Ceded Reinsurance Contracts
As discussed in Note 9, we cede insurance contracts to LNBAR. We cede certain guaranteed benefit risks (including certain GDB and GWB benefits) to LNBAR. As discussed in Note 6, we cede the GLB reserves embedded derivatives and the related hedge results to LNBAR.
Substantially all reinsurance ceded to affiliated companies is with unauthorized companies. To take reserve credit for such reinsurance, we hold assets from the reinsurer, including funds held under reinsurance treaties, and are the beneficiary of LOCs aggregating to $1.2 billion and $610 million as of December 31, 2018 and 2017, respectively. The LOCs are obtained by the affiliate reinsurer and issued by banks in order for the Company to recognize the reserve credit.
79
Lincoln Life Flexible Premium Variable Life Account M
M-1
Lincoln Life Flexible Premium Variable Life Account M
Statements of assets and liabilities
December 31, 2018
|
Subaccount |
Investments |
Contract Purchases Due From The Lincoln National Life Insurance Company |
Total Assets |
Contract Redemptions Due To The Lincoln National Life Insurance Company |
Mortality & Expense Guarantee Charges Payable To The Lincoln National Life Insurance Company |
Net Assets |
|||||||||||||||||||||
|
AB VPS Global Thematic Growth Portfolio - Class A |
$ |
8,149,241 |
$ |
2,393 |
$ |
8,151,634 |
$ |
— |
$ |
377 |
$ |
8,151,257 |
|||||||||||||||
|
AB VPS Growth and Income Portfolio - Class A |
16,767,801 |
1,088 |
16,768,889 |
— |
504 |
16,768,385 |
|||||||||||||||||||||
|
AB VPS International Value Portfolio - Class A |
8,422,740 |
3,244 |
8,425,984 |
— |
170 |
8,425,814 |
|||||||||||||||||||||
|
AB VPS Large Cap Growth Portfolio - Class A |
3,310,742 |
— |
3,310,742 |
201 |
117 |
3,310,424 |
|||||||||||||||||||||
|
AB VPS Small/Mid Cap Value Portfolio - Class A |
39,555,875 |
42,783 |
39,598,658 |
— |
1,791 |
39,596,867 |
|||||||||||||||||||||
|
American Century VP Balanced Fund - Class I |
18,398,584 |
66,724 |
18,465,308 |
— |
1,291 |
18,464,017 |
|||||||||||||||||||||
|
American Century VP Inflation Protection Fund - Class I |
11,195,792 |
6,595 |
11,202,387 |
— |
279 |
11,202,108 |
|||||||||||||||||||||
|
American Funds Global Growth Fund - Class 2 |
96,472,446 |
282,566 |
96,755,012 |
— |
4,894 |
96,750,118 |
|||||||||||||||||||||
|
American Funds Global Small Capitalization Fund - Class 2 |
75,601,984 |
48,706 |
75,650,690 |
— |
3,656 |
75,647,034 |
|||||||||||||||||||||
|
American Funds Growth Fund - Class 2 |
296,710,079 |
146,125 |
296,856,204 |
— |
13,617 |
296,842,587 |
|||||||||||||||||||||
|
American Funds Growth-Income Fund - Class 2 |
304,315,172 |
316,401 |
304,631,573 |
— |
14,930 |
304,616,643 |
|||||||||||||||||||||
|
American Funds International Fund - Class 2 |
170,672,669 |
69,919 |
170,742,588 |
— |
8,024 |
170,734,564 |
|||||||||||||||||||||
|
BlackRock Global Allocation V.I. Fund - Class I |
191,847,033 |
113,628 |
191,960,661 |
— |
10,756 |
191,949,905 |
|||||||||||||||||||||
|
ClearBridge Variable Mid Cap Portfolio - Class I |
15,972,149 |
11,275 |
15,983,424 |
— |
1,015 |
15,982,409 |
|||||||||||||||||||||
|
Delaware VIP® Diversified Income Series - Standard Class |
67,948,297 |
58,290 |
68,006,587 |
— |
3,017 |
68,003,570 |
|||||||||||||||||||||
|
Delaware VIP® Emerging Markets Series - Standard Class |
78,206,973 |
86,502 |
78,293,475 |
— |
3,679 |
78,289,796 |
|||||||||||||||||||||
|
Delaware VIP® High Yield Series - Standard Class |
16,424,076 |
— |
16,424,076 |
16 |
496 |
16,423,564 |
|||||||||||||||||||||
|
Delaware VIP® Limited-Term Diversified Income Series - Standard Class |
59,671,316 |
22,026 |
59,693,342 |
— |
2,774 |
59,690,568 |
|||||||||||||||||||||
|
Delaware VIP® REIT Series - Standard Class |
50,598,364 |
48,438 |
50,646,802 |
— |
2,250 |
50,644,552 |
|||||||||||||||||||||
|
Delaware VIP® Small Cap Value Series - Standard Class |
66,315,421 |
16,448 |
66,331,869 |
— |
3,013 |
66,328,856 |
|||||||||||||||||||||
|
Delaware VIP® Smid Cap Core Series - Standard Class |
55,863,622 |
27,486 |
55,891,108 |
— |
2,750 |
55,888,358 |
|||||||||||||||||||||
|
Delaware VIP® U.S. Growth Series - Standard Class |
27,260,568 |
35,132 |
27,295,700 |
— |
1,102 |
27,294,598 |
|||||||||||||||||||||
|
Delaware VIP® Value Series - Standard Class |
61,110,976 |
87,528 |
61,198,504 |
— |
2,837 |
61,195,667 |
|||||||||||||||||||||
|
DWS Alternative Asset Allocation VIP Portfolio - Class A |
13,826,169 |
2,870 |
13,829,039 |
— |
704 |
13,828,335 |
|||||||||||||||||||||
|
DWS Equity 500 Index VIP Portfolio - Class A |
39,993,227 |
33,861 |
40,027,088 |
— |
1,439 |
40,025,649 |
|||||||||||||||||||||
|
DWS Small Cap Index VIP Portfolio - Class A |
9,268,536 |
25,150 |
9,293,686 |
— |
315 |
9,293,371 |
|||||||||||||||||||||
|
Fidelity® VIP Asset Manager Portfolio - Initial Class |
544,863 |
— |
544,863 |
1,064 |
25 |
543,774 |
|||||||||||||||||||||
|
Fidelity® VIP Contrafund® Portfolio - Service Class |
176,801,649 |
283,714 |
177,085,363 |
— |
8,450 |
177,076,913 |
|||||||||||||||||||||
|
Fidelity® VIP Equity-Income Portfolio - Initial Class |
1,649,169 |
491 |
1,649,660 |
— |
74 |
1,649,586 |
|||||||||||||||||||||
|
Fidelity® VIP Equity-Income Portfolio - Service Class |
5,173,370 |
36 |
5,173,406 |
— |
194 |
5,173,212 |
|||||||||||||||||||||
|
Fidelity® VIP Growth Opportunities Portfolio - Service Class |
3,480,694 |
— |
3,480,694 |
357 |
124 |
3,480,213 |
|||||||||||||||||||||
|
Fidelity® VIP Growth Portfolio - Service Class |
41,609,947 |
175,382 |
41,785,329 |
— |
2,220 |
41,783,109 |
|||||||||||||||||||||
|
Fidelity® VIP High Income Portfolio - Service Class |
1,641,353 |
— |
1,641,353 |
45 |
71 |
1,641,237 |
|||||||||||||||||||||
|
Fidelity® VIP Investment Grade Bond Portfolio - Initial Class |
909,640 |
— |
909,640 |
177 |
41 |
909,422 |
|||||||||||||||||||||
|
Fidelity® VIP Mid Cap Portfolio - Service Class |
71,550,422 |
116,939 |
71,667,361 |
— |
3,556 |
71,663,805 |
|||||||||||||||||||||
|
Fidelity® VIP Overseas Portfolio - Service Class |
5,793,406 |
633 |
5,794,039 |
— |
174 |
5,793,865 |
|||||||||||||||||||||
|
Franklin Income VIP Fund - Class 1 |
78,418,122 |
191,275 |
78,609,397 |
— |
4,180 |
78,605,217 |
|||||||||||||||||||||
See accompanying notes.
M-2
Lincoln Life Flexible Premium Variable Life Account M
Statements of assets and liabilities (continued)
December 31, 2018
|
Subaccount |
Investments |
Contract Purchases Due From The Lincoln National Life Insurance Company |
Total Assets |
Contract Redemptions Due To The Lincoln National Life Insurance Company |
Mortality & Expense Guarantee Charges Payable To The Lincoln National Life Insurance Company |
Net Assets |
|||||||||||||||||||||
|
Franklin Mutual Shares VIP Fund - Class 1 |
$ |
47,796,336 |
$ |
264,463 |
$ |
48,060,799 |
$ |
— |
$ |
1,957 |
$ |
48,058,842 |
|||||||||||||||
|
Franklin Small-Mid Cap Growth VIP Fund - Class 1 |
12,470,823 |
4,929 |
12,475,752 |
— |
356 |
12,475,396 |
|||||||||||||||||||||
|
Invesco V.I. American Franchise Fund - Series I Shares |
10,418,327 |
2,686 |
10,421,013 |
— |
425 |
10,420,588 |
|||||||||||||||||||||
|
Invesco V.I. Core Equity Fund - Series I Shares |
12,490,411 |
1,187 |
12,491,598 |
— |
508 |
12,491,090 |
|||||||||||||||||||||
|
Invesco V.I. Core Plus Bond Fund - Series I Shares |
951,330 |
— |
951,330 |
214 |
43 |
951,073 |
|||||||||||||||||||||
|
Invesco V.I. International Growth Fund - Series I Shares |
22,498,289 |
3,074 |
22,501,363 |
— |
1,276 |
22,500,087 |
|||||||||||||||||||||
|
Janus Henderson Balanced Portfolio - Institutional Shares |
8,486,198 |
— |
8,486,198 |
562 |
361 |
8,485,275 |
|||||||||||||||||||||
|
Janus Henderson Balanced Portfolio - Service Shares |
8,029,232 |
910 |
8,030,142 |
— |
297 |
8,029,845 |
|||||||||||||||||||||
|
Janus Henderson Enterprise Portfolio - Service Shares |
4,695,533 |
— |
4,695,533 |
139 |
187 |
4,695,207 |
|||||||||||||||||||||
|
Janus Henderson Global Research Portfolio - Institutional Shares |
7,834,463 |
1,364 |
7,835,827 |
— |
304 |
7,835,523 |
|||||||||||||||||||||
|
Janus Henderson Global Research Portfolio - Service Shares |
1,789,455 |
54 |
1,789,509 |
— |
72 |
1,789,437 |
|||||||||||||||||||||
|
Janus Henderson Global Technology Portfolio - Service Shares |
2,645,972 |
— |
2,645,972 |
216 |
113 |
2,645,643 |
|||||||||||||||||||||
|
JPMorgan Insurance Trust Global Allocation Portfolio - Class 1 |
19,070,428 |
4,132 |
19,074,560 |
— |
1,264 |
19,073,296 |
|||||||||||||||||||||
|
LVIP Baron Growth Opportunities Fund - Service Class |
34,801,577 |
76,038 |
34,877,615 |
— |
1,631 |
34,875,984 |
|||||||||||||||||||||
|
LVIP Baron Growth Opportunities Fund - Standard Class |
1,198,904 |
1,900 |
1,200,804 |
— |
42 |
1,200,762 |
|||||||||||||||||||||
|
LVIP BlackRock Dividend Value Managed Volatility Fund - Standard Class |
37,383,368 |
— |
37,383,368 |
241 |
2,255 |
37,380,872 |
|||||||||||||||||||||
|
LVIP BlackRock Global Growth ETF Allocation Managed Risk Fund - Standard Class |
17,060,325 |
7,690 |
17,068,015 |
— |
1,217 |
17,066,798 |
|||||||||||||||||||||
|
LVIP BlackRock Inflation Protected Bond Fund - Standard Class |
31,341,896 |
22,092 |
31,363,988 |
— |
1,701 |
31,362,287 |
|||||||||||||||||||||
|
LVIP BlackRock U.S. Growth ETF Allocation Managed Risk Fund - Standard Class |
4,245,896 |
6,775 |
4,252,671 |
— |
293 |
4,252,378 |
|||||||||||||||||||||
|
LVIP Blended Large Cap Growth Managed Volatility Fund - Standard Class |
7,923,343 |
— |
7,923,343 |
414 |
319 |
7,922,610 |
|||||||||||||||||||||
|
LVIP Blended Mid Cap Managed Volatility Fund - Standard Class |
8,114,373 |
309 |
8,114,682 |
— |
411 |
8,114,271 |
|||||||||||||||||||||
|
LVIP Clarion Global Real Estate Fund - Standard Class |
22,530,608 |
11,453 |
22,542,061 |
— |
1,003 |
22,541,058 |
|||||||||||||||||||||
|
LVIP ClearBridge Large Cap Managed Volatility Fund - Standard Class |
1,047,809 |
— |
1,047,809 |
— |
69 |
1,047,740 |
|||||||||||||||||||||
|
LVIP Delaware Bond Fund - Standard Class |
153,221,387 |
72,201 |
153,293,588 |
— |
6,869 |
153,286,719 |
|||||||||||||||||||||
|
LVIP Delaware Diversified Floating Rate Fund - Standard Class |
25,307,672 |
32,499 |
25,340,171 |
— |
1,345 |
25,338,826 |
|||||||||||||||||||||
|
LVIP Delaware Social Awareness Fund - Standard Class |
6,845,208 |
788 |
6,845,996 |
— |
278 |
6,845,718 |
|||||||||||||||||||||
|
LVIP Delaware Special Opportunities Fund - Standard Class |
12,908,218 |
3,068 |
12,911,286 |
— |
631 |
12,910,655 |
|||||||||||||||||||||
|
LVIP Delaware Wealth Builder Fund - Standard Class |
2,566,155 |
— |
2,566,155 |
311 |
75 |
2,565,769 |
|||||||||||||||||||||
See accompanying notes.
M-3
Lincoln Life Flexible Premium Variable Life Account M
Statements of assets and liabilities (continued)
December 31, 2018
|
Subaccount |
Investments |
Contract Purchases Due From The Lincoln National Life Insurance Company |
Total Assets |
Contract Redemptions Due To The Lincoln National Life Insurance Company |
Mortality & Expense Guarantee Charges Payable To The Lincoln National Life Insurance Company |
Net Assets |
|||||||||||||||||||||
|
LVIP Dimensional International Core Equity Fund - Standard Class |
$ |
17,169,558 |
$ |
155,356 |
$ |
17,324,914 |
$ |
— |
$ |
1,070 |
$ |
17,323,844 |
|||||||||||||||
|
LVIP Dimensional International Equity Managed Volatility Fund - Standard Class |
10,963,974 |
25,546 |
10,989,520 |
— |
508 |
10,989,012 |
|||||||||||||||||||||
|
LVIP Dimensional U.S. Core Equity 1 Fund - Standard Class |
19,076,534 |
14,890 |
19,091,424 |
— |
1,064 |
19,090,360 |
|||||||||||||||||||||
|
LVIP Dimensional U.S. Core Equity 2 Fund - Standard Class |
22,421,946 |
192,439 |
22,614,385 |
— |
1,401 |
22,612,984 |
|||||||||||||||||||||
|
LVIP Dimensional U.S. Equity Managed Volatility Fund - Standard Class |
11,943,648 |
29,127 |
11,972,775 |
— |
535 |
11,972,240 |
|||||||||||||||||||||
|
LVIP Dimensional/Vanguard Total Bond Fund - Standard Class |
71,287,387 |
185,640 |
71,473,027 |
— |
4,097 |
71,468,930 |
|||||||||||||||||||||
|
LVIP Franklin Templeton Global Equity Managed Volatility Fund - Standard Class |
7,448,642 |
139 |
7,448,781 |
— |
301 |
7,448,480 |
|||||||||||||||||||||
|
LVIP Global Conservative Allocation Managed Risk Fund - Standard Class |
42,122,524 |
— |
42,122,524 |
853 |
2,186 |
42,119,485 |
|||||||||||||||||||||
|
LVIP Global Growth Allocation Managed Risk Fund - Standard Class |
115,702,252 |
43,627 |
115,745,879 |
— |
4,879 |
115,741,000 |
|||||||||||||||||||||
|
LVIP Global Income Fund - Standard Class |
13,011,715 |
7,537 |
13,019,252 |
— |
592 |
13,018,660 |
|||||||||||||||||||||
|
LVIP Global Moderate Allocation Managed Risk Fund - Standard Class |
95,788,301 |
3,388 |
95,791,689 |
— |
4,189 |
95,787,500 |
|||||||||||||||||||||
|
LVIP Government Money Market Fund - Standard Class |
112,782,783 |
1,446,329 |
114,229,112 |
— |
6,027 |
114,223,085 |
|||||||||||||||||||||
|
LVIP Invesco Diversified Equity-Income Managed Volatility Fund - Standard Class |
1,583,195 |
— |
1,583,195 |
— |
100 |
1,583,095 |
|||||||||||||||||||||
|
LVIP JPMorgan High Yield Fund - Standard Class |
47,075,106 |
52,804 |
47,127,910 |
— |
2,453 |
47,125,457 |
|||||||||||||||||||||
|
LVIP JPMorgan Select Mid Cap Value Managed Volatility Fund - Standard Class |
13,179,378 |
1,637 |
13,181,015 |
— |
681 |
13,180,334 |
|||||||||||||||||||||
|
LVIP MFS International Growth Fund - Standard Class |
35,660,419 |
23,428 |
35,683,847 |
— |
1,728 |
35,682,119 |
|||||||||||||||||||||
|
LVIP MFS Value Fund - Standard Class |
96,981,770 |
47,500 |
97,029,270 |
— |
4,825 |
97,024,445 |
|||||||||||||||||||||
|
LVIP Mondrian International Value Fund - Standard Class |
36,133,128 |
13,918 |
36,147,046 |
— |
1,631 |
36,145,415 |
|||||||||||||||||||||
|
LVIP Multi-Manager Global Equity Managed Volatility Fund - Standard Class |
258,057 |
— |
258,057 |
— |
14 |
258,043 |
|||||||||||||||||||||
|
LVIP SSGA Bond Index Fund - Standard Class |
49,555,737 |
88,890 |
49,644,627 |
— |
3,098 |
49,641,529 |
|||||||||||||||||||||
|
LVIP SSGA Conservative Index Allocation Fund - Standard Class |
20,390,256 |
14,850 |
20,405,106 |
— |
1,292 |
20,403,814 |
|||||||||||||||||||||
|
LVIP SSGA Conservative Structured Allocation Fund - Standard Class |
12,133,953 |
9,237 |
12,143,190 |
— |
676 |
12,142,514 |
|||||||||||||||||||||
|
LVIP SSGA Developed International 150 Fund - Standard Class |
24,725,186 |
87,617 |
24,812,803 |
— |
1,534 |
24,811,269 |
|||||||||||||||||||||
|
LVIP SSGA Emerging Markets 100 Fund - Standard Class |
39,518,357 |
68,648 |
39,587,005 |
— |
2,141 |
39,584,864 |
|||||||||||||||||||||
|
LVIP SSGA Global Tactical Allocation Managed Volatility Fund - Standard Class |
21,567,904 |
91 |
21,567,995 |
— |
873 |
21,567,122 |
|||||||||||||||||||||
|
LVIP SSGA International Index Fund - Standard Class |
44,039,746 |
74,725 |
44,114,471 |
— |
2,667 |
44,111,804 |
|||||||||||||||||||||
|
LVIP SSGA International Managed Volatility Fund - Standard Class |
9,602,443 |
163 |
9,602,606 |
— |
530 |
9,602,076 |
|||||||||||||||||||||
|
LVIP SSGA Large Cap 100 Fund - Standard Class |
31,312,491 |
57,781 |
31,370,272 |
— |
1,693 |
31,368,579 |
|||||||||||||||||||||
|
LVIP SSGA Moderate Index Allocation Fund - Standard Class |
84,702,660 |
123,232 |
84,825,892 |
— |
5,386 |
84,820,506 |
|||||||||||||||||||||
See accompanying notes.
M-4
Lincoln Life Flexible Premium Variable Life Account M
Statements of assets and liabilities (continued)
December 31, 2018
|
Subaccount |
Investments |
Contract Purchases Due From The Lincoln National Life Insurance Company |
Total Assets |
Contract Redemptions Due To The Lincoln National Life Insurance Company |
Mortality & Expense Guarantee Charges Payable To The Lincoln National Life Insurance Company |
Net Assets |
|||||||||||||||||||||
|
LVIP SSGA Moderate Structured Allocation Fund - Standard Class |
$ |
62,634,827 |
$ |
9,600 |
$ |
62,644,427 |
$ |
— |
$ |
3,861 |
$ |
62,640,566 |
|||||||||||||||
|
LVIP SSGA Moderately Aggressive Index Allocation Fund - Standard Class |
103,758,581 |
116,584 |
103,875,165 |
— |
6,331 |
103,868,834 |
|||||||||||||||||||||
|
LVIP SSGA Moderately Aggressive Structured Allocation Fund - Standard Class |
56,078,609 |
104,047 |
56,182,656 |
— |
3,054 |
56,179,602 |
|||||||||||||||||||||
|
LVIP SSGA S&P 500 Index Fund - Standard Class |
433,796,416 |
— |
433,796,416 |
2,561,396 |
27,171 |
431,207,849 |
|||||||||||||||||||||
|
LVIP SSGA Small-Cap Index Fund - Standard Class |
53,962,252 |
123,209 |
54,085,461 |
— |
3,080 |
54,082,381 |
|||||||||||||||||||||
|
LVIP SSGA Small-Mid Cap 200 Fund - Standard Class |
38,567,513 |
47,041 |
38,614,554 |
— |
2,351 |
38,612,203 |
|||||||||||||||||||||
|
LVIP T. Rowe Price 2010 Fund - Standard Class |
222,365 |
— |
222,365 |
— |
6 |
222,359 |
|||||||||||||||||||||
|
LVIP T. Rowe Price 2020 Fund - Standard Class |
940,218 |
— |
940,218 |
— |
26 |
940,192 |
|||||||||||||||||||||
|
LVIP T. Rowe Price 2030 Fund - Standard Class |
2,055,509 |
— |
2,055,509 |
117 |
41 |
2,055,351 |
|||||||||||||||||||||
|
LVIP T. Rowe Price 2040 Fund - Standard Class |
3,252,578 |
— |
3,252,578 |
— |
82 |
3,252,496 |
|||||||||||||||||||||
|
LVIP T. Rowe Price Growth Stock Fund - Standard Class |
64,370,045 |
91,352 |
64,461,397 |
— |
3,565 |
64,457,832 |
|||||||||||||||||||||
|
LVIP T. Rowe Price Structured Mid-Cap Growth Fund - Standard Class |
34,232,396 |
50,736 |
34,283,132 |
— |
1,819 |
34,281,313 |
|||||||||||||||||||||
|
LVIP U.S. Growth Allocation Managed Risk Fund - Standard Class |
9,238,330 |
704,951 |
9,943,281 |
— |
533 |
9,942,748 |
|||||||||||||||||||||
|
LVIP Vanguard Domestic Equity ETF Fund - Standard Class |
94,667,665 |
440,741 |
95,108,406 |
— |
5,692 |
95,102,714 |
|||||||||||||||||||||
|
LVIP Vanguard International Equity ETF Fund - Standard Class |
67,163,828 |
249,379 |
67,413,207 |
— |
4,028 |
67,409,179 |
|||||||||||||||||||||
|
LVIP Wellington Capital Growth Fund - Standard Class |
29,122,560 |
16,075 |
29,138,635 |
— |
1,432 |
29,137,203 |
|||||||||||||||||||||
|
LVIP Wellington Mid-Cap Value Fund - Standard Class |
21,754,619 |
20,733 |
21,775,352 |
— |
1,176 |
21,774,176 |
|||||||||||||||||||||
|
M Capital Appreciation Fund |
1,395,260 |
22 |
1,395,282 |
— |
32 |
1,395,250 |
|||||||||||||||||||||
|
M International Equity Fund |
1,643,281 |
19 |
1,643,300 |
— |
30 |
1,643,270 |
|||||||||||||||||||||
|
M Large Cap Growth Fund |
2,722,900 |
22 |
2,722,922 |
— |
56 |
2,722,866 |
|||||||||||||||||||||
|
M Large Cap Value Fund |
2,014,829 |
23 |
2,014,852 |
— |
39 |
2,014,813 |
|||||||||||||||||||||
|
MFS® VIT Growth Series - Initial Class |
48,150,615 |
37,071 |
48,187,686 |
— |
2,411 |
48,185,275 |
|||||||||||||||||||||
|
MFS® VIT Total Return Series - Initial Class |
44,336,864 |
46,311 |
44,383,175 |
— |
2,144 |
44,381,031 |
|||||||||||||||||||||
|
MFS® VIT Utilities Series - Initial Class |
37,163,564 |
18,124 |
37,181,688 |
— |
1,623 |
37,180,065 |
|||||||||||||||||||||
|
MFS® VIT II Core Equity Portfolio - Initial Class |
921,139 |
— |
921,139 |
— |
30 |
921,109 |
|||||||||||||||||||||
|
Neuberger Berman AMT Large Cap Value Portfolio - I Class |
1,405,695 |
— |
1,405,695 |
— |
64 |
1,405,631 |
|||||||||||||||||||||
|
Neuberger Berman AMT Mid Cap Growth Portfolio - I Class |
15,810,823 |
992 |
15,811,815 |
— |
554 |
15,811,261 |
|||||||||||||||||||||
|
Neuberger Berman AMT Mid Cap Intrinsic Value Portfolio - I Class |
4,998,968 |
1,072 |
5,000,040 |
— |
156 |
4,999,884 |
|||||||||||||||||||||
|
PIMCO VIT CommodityRealReturn® Strategy Portfolio - Administrative Class |
22,366,975 |
15,142 |
22,382,117 |
— |
1,049 |
22,381,068 |
|||||||||||||||||||||
|
Putnam VT Equity Income Fund - Class IB |
1,442,976 |
— |
1,442,976 |
800 |
57 |
1,442,119 |
|||||||||||||||||||||
|
Putnam VT Global Health Care Fund - Class IB |
1,701,053 |
7 |
1,701,060 |
— |
70 |
1,700,990 |
|||||||||||||||||||||
|
Templeton Foreign VIP Fund - Class 1 |
1,083,397 |
159 |
1,083,556 |
— |
49 |
1,083,507 |
|||||||||||||||||||||
|
Templeton Foreign VIP Fund - Class 2 |
2,422,671 |
1,520 |
2,424,191 |
— |
104 |
2,424,087 |
|||||||||||||||||||||
|
Templeton Global Bond VIP Fund - Class 1 |
45,094,625 |
98,900 |
45,193,525 |
— |
2,476 |
45,191,049 |
|||||||||||||||||||||
|
Templeton Growth VIP Fund - Class 1 |
6,551,777 |
2,656 |
6,554,433 |
— |
215 |
6,554,218 |
|||||||||||||||||||||
|
Templeton Growth VIP Fund - Class 2 |
1,016,543 |
— |
1,016,543 |
3 |
38 |
1,016,502 |
|||||||||||||||||||||
See accompanying notes.
M-5
Lincoln Life Flexible Premium Variable Life Account M
Statements of operations
Year Ended December 31, 2018
|
Subaccount |
Dividends from Investment Income |
Mortality and Expense Guarantee Charges |
Net Investment Income (Loss) |
Net Realized Gain (Loss) on Investments |
|||||||||||||||
|
AB VPS Global Thematic Growth Portfolio - Class A |
$ |
— |
$ |
(49,174 |
) |
$ |
(49,174 |
) |
$ |
539,359 |
|||||||||
|
AB VPS Growth and Income Portfolio - Class A |
191,165 |
(74,720 |
) |
116,445 |
706,399 |
||||||||||||||
|
AB VPS International Value Portfolio - Class A |
151,717 |
(27,010 |
) |
124,707 |
89,870 |
||||||||||||||
|
AB VPS Large Cap Growth Portfolio - Class A |
— |
(14,842 |
) |
(14,842 |
) |
129,487 |
|||||||||||||
|
AB VPS Small/Mid Cap Value Portfolio - Class A |
215,386 |
(245,244 |
) |
(29,858 |
) |
540,663 |
|||||||||||||
|
American Century VP Balanced Fund - Class I |
180,772 |
(91,987 |
) |
88,785 |
60,339 |
||||||||||||||
|
American Century VP Inflation Protection Fund - Class I |
364,825 |
(38,725 |
) |
326,100 |
(213,979 |
) |
|||||||||||||
|
American Funds Global Growth Fund - Class 2 |
706,785 |
(574,755 |
) |
132,030 |
1,397,823 |
||||||||||||||
|
American Funds Global Small Capitalization Fund - Class 2 |
67,986 |
(475,148 |
) |
(407,162 |
) |
907,212 |
|||||||||||||
|
American Funds Growth Fund - Class 2 |
1,388,329 |
(1,702,035 |
) |
(313,706 |
) |
5,822,019 |
|||||||||||||
|
American Funds Growth-Income Fund - Class 2 |
4,579,192 |
(1,810,069 |
) |
2,769,123 |
4,434,419 |
||||||||||||||
|
American Funds International Fund - Class 2 |
3,229,826 |
(999,696 |
) |
2,230,130 |
1,634,137 |
||||||||||||||
|
BlackRock Global Allocation V.I. Fund - Class I |
1,989,638 |
(1,340,683 |
) |
648,955 |
239,019 |
||||||||||||||
|
ClearBridge Variable Mid Cap Portfolio - Class I |
88,459 |
(113,522 |
) |
(25,063 |
) |
35,754 |
|||||||||||||
|
Delaware VIP® Diversified Income Series - Standard Class |
2,145,743 |
(368,333 |
) |
1,777,410 |
(517,067 |
) |
|||||||||||||
|
Delaware VIP® Emerging Markets Series - Standard Class |
2,489,560 |
(431,856 |
) |
2,057,704 |
1,212,564 |
||||||||||||||
|
Delaware VIP® High Yield Series - Standard Class |
1,208,269 |
(76,921 |
) |
1,131,348 |
(651,912 |
) |
|||||||||||||
|
Delaware VIP® Limited-Term Diversified Income Series - Standard Class |
1,448,034 |
(307,271 |
) |
1,140,763 |
(120,292 |
) |
|||||||||||||
|
Delaware VIP® REIT Series - Standard Class |
1,152,340 |
(294,391 |
) |
857,949 |
(750,486 |
) |
|||||||||||||
|
Delaware VIP® Small Cap Value Series - Standard Class |
630,393 |
(415,485 |
) |
214,908 |
1,165,528 |
||||||||||||||
|
Delaware VIP® Smid Cap Core Series - Standard Class |
107,015 |
(364,693 |
) |
(257,678 |
) |
(671,034 |
) |
||||||||||||
|
Delaware VIP® U.S. Growth Series - Standard Class |
— |
(149,149 |
) |
(149,149 |
) |
66,756 |
|||||||||||||
|
Delaware VIP® Value Series - Standard Class |
1,040,842 |
(361,359 |
) |
679,483 |
1,356,821 |
||||||||||||||
|
DWS Alternative Asset Allocation VIP Portfolio - Class A |
310,275 |
(89,447 |
) |
220,828 |
(69,953 |
) |
|||||||||||||
|
DWS Equity 500 Index VIP Portfolio - Class A |
769,055 |
(206,219 |
) |
562,836 |
1,459,552 |
||||||||||||||
|
DWS Small Cap Index VIP Portfolio - Class A |
111,927 |
(53,235 |
) |
58,692 |
233,177 |
||||||||||||||
|
Fidelity® VIP Asset Manager Portfolio - Initial Class |
10,003 |
(3,378 |
) |
6,625 |
(2,659 |
) |
|||||||||||||
|
Fidelity® VIP Contrafund® Portfolio - Service Class |
1,173,546 |
(1,089,821 |
) |
83,725 |
2,616,765 |
||||||||||||||
|
Fidelity® VIP Equity-Income Portfolio - Initial Class |
41,819 |
(10,429 |
) |
31,390 |
31,000 |
||||||||||||||
|
Fidelity® VIP Equity-Income Portfolio - Service Class |
128,983 |
(27,616 |
) |
101,367 |
14,111 |
||||||||||||||
|
Fidelity® VIP Growth Opportunities Portfolio - Service Class |
3,882 |
(16,025 |
) |
(12,143 |
) |
198,955 |
|||||||||||||
|
Fidelity® VIP Growth Portfolio - Service Class |
64,390 |
(276,735 |
) |
(212,345 |
) |
1,046,942 |
|||||||||||||
|
Fidelity® VIP High Income Portfolio - Service Class |
94,799 |
(8,958 |
) |
85,841 |
(4,555 |
) |
|||||||||||||
|
Fidelity® VIP Investment Grade Bond Portfolio - Initial Class |
23,176 |
(5,526 |
) |
17,650 |
(10,149 |
) |
|||||||||||||
|
Fidelity® VIP Mid Cap Portfolio - Service Class |
461,811 |
(486,984 |
) |
(25,173 |
) |
611,575 |
|||||||||||||
|
Fidelity® VIP Overseas Portfolio - Service Class |
98,112 |
(25,146 |
) |
72,966 |
230,196 |
||||||||||||||
|
Franklin Income VIP Fund - Class 1 |
3,921,442 |
(517,727 |
) |
3,403,715 |
268,947 |
||||||||||||||
|
Franklin Mutual Shares VIP Fund - Class 1 |
1,388,099 |
(253,590 |
) |
1,134,509 |
248,502 |
||||||||||||||
|
Franklin Small-Mid Cap Growth VIP Fund - Class 1 |
— |
(55,971 |
) |
(55,971 |
) |
(211,512 |
) |
||||||||||||
|
Invesco V.I. American Franchise Fund - Series I Shares |
— |
(61,392 |
) |
(61,392 |
) |
494,909 |
|||||||||||||
|
Invesco V.I. Core Equity Fund - Series I Shares |
128,284 |
(72,779 |
) |
55,505 |
332,568 |
||||||||||||||
|
Invesco V.I. Core Plus Bond Fund - Series I Shares |
22,941 |
(3,910 |
) |
19,031 |
(760 |
) |
|||||||||||||
|
Invesco V.I. International Growth Fund - Series I Shares |
511,445 |
(162,542 |
) |
348,903 |
179,492 |
||||||||||||||
|
Janus Henderson Balanced Portfolio - Institutional Shares |
197,132 |
(49,087 |
) |
148,045 |
244,410 |
||||||||||||||
|
Janus Henderson Balanced Portfolio - Service Shares |
153,913 |
(39,626 |
) |
114,287 |
191,727 |
||||||||||||||
|
Janus Henderson Enterprise Portfolio - Service Shares |
5,823 |
(26,405 |
) |
(20,582 |
) |
240,474 |
|||||||||||||
|
Janus Henderson Global Research Portfolio - Institutional Shares |
100,141 |
(42,948 |
) |
57,193 |
477,637 |
||||||||||||||
|
Janus Henderson Global Research Portfolio - Service Shares |
20,041 |
(10,281 |
) |
9,760 |
103,171 |
||||||||||||||
|
Janus Henderson Global Technology Portfolio - Service Shares |
— |
(15,070 |
) |
(15,070 |
) |
128,304 |
|||||||||||||
|
JPMorgan Insurance Trust Global Allocation Portfolio - Class 1 |
— |
(115,595 |
) |
(115,595 |
) |
(3,295 |
) |
||||||||||||
|
LVIP Baron Growth Opportunities Fund - Service Class |
— |
(210,859 |
) |
(210,859 |
) |
1,347,768 |
|||||||||||||
|
LVIP Baron Growth Opportunities Fund - Standard Class |
— |
(5,659 |
) |
(5,659 |
) |
54,078 |
|||||||||||||
|
LVIP BlackRock Dividend Value Managed Volatility Fund - Standard Class |
920,233 |
(306,469 |
) |
613,764 |
602,730 |
||||||||||||||
|
LVIP BlackRock Global Growth ETF Allocation Managed Risk Fund - Standard Class |
313,881 |
(120,518 |
) |
193,363 |
48,301 |
||||||||||||||
|
LVIP BlackRock Inflation Protected Bond Fund - Standard Class |
1,625,151 |
(195,581 |
) |
1,429,570 |
(101,042 |
) |
|||||||||||||
See accompanying notes.
M-6
|
Subaccount |
Dividends from Net Realized Gain on Investments |
Total Net Realized Gain (Loss) on Investments |
Net Change in Unrealized Appreciation or Depreciation on Investments |
Net Increase (Decrease) in Net Assets Resulting from Operations |
|||||||||||||||
|
AB VPS Global Thematic Growth Portfolio - Class A |
$ |
— |
$ |
539,359 |
$ |
(1,404,622 |
) |
$ |
(914,437 |
) |
|||||||||
|
AB VPS Growth and Income Portfolio - Class A |
2,156,372 |
2,862,771 |
(4,020,512 |
) |
(1,041,296 |
) |
|||||||||||||
|
AB VPS International Value Portfolio - Class A |
— |
89,870 |
(2,634,348 |
) |
(2,419,771 |
) |
|||||||||||||
|
AB VPS Large Cap Growth Portfolio - Class A |
360,171 |
489,658 |
(436,316 |
) |
38,500 |
||||||||||||||
|
AB VPS Small/Mid Cap Value Portfolio - Class A |
3,593,153 |
4,133,816 |
(11,214,063 |
) |
(7,110,105 |
) |
|||||||||||||
|
American Century VP Balanced Fund - Class I |
56,469 |
116,808 |
(745,134 |
) |
(539,541 |
) |
|||||||||||||
|
American Century VP Inflation Protection Fund - Class I |
— |
(213,979 |
) |
(466,367 |
) |
(354,246 |
) |
||||||||||||
|
American Funds Global Growth Fund - Class 2 |
6,445,996 |
7,843,819 |
(18,161,695 |
) |
(10,185,846 |
) |
|||||||||||||
|
American Funds Global Small Capitalization Fund - Class 2 |
3,643,437 |
4,550,649 |
(13,403,495 |
) |
(9,260,008 |
) |
|||||||||||||
|
American Funds Growth Fund - Class 2 |
30,445,289 |
36,267,308 |
(39,428,677 |
) |
(3,475,075 |
) |
|||||||||||||
|
American Funds Growth-Income Fund - Class 2 |
21,076,490 |
25,510,909 |
(36,322,051 |
) |
(8,042,019 |
) |
|||||||||||||
|
American Funds International Fund - Class 2 |
8,285,016 |
9,919,153 |
(38,240,873 |
) |
(26,091,590 |
) |
|||||||||||||
|
BlackRock Global Allocation V.I. Fund - Class I |
7,719,994 |
7,959,013 |
(25,137,788 |
) |
(16,529,820 |
) |
|||||||||||||
|
ClearBridge Variable Mid Cap Portfolio - Class I |
305,303 |
341,057 |
(2,716,586 |
) |
(2,400,592 |
) |
|||||||||||||
|
Delaware VIP® Diversified Income Series - Standard Class |
— |
(517,067 |
) |
(3,085,295 |
) |
(1,824,952 |
) |
||||||||||||
|
Delaware VIP® Emerging Markets Series - Standard Class |
248,956 |
1,461,520 |
(17,466,627 |
) |
(13,947,403 |
) |
|||||||||||||
|
Delaware VIP® High Yield Series - Standard Class |
— |
(651,912 |
) |
(1,420,162 |
) |
(940,726 |
) |
||||||||||||
|
Delaware VIP® Limited-Term Diversified Income Series - Standard Class |
— |
(120,292 |
) |
(1,148,875 |
) |
(128,404 |
) |
||||||||||||
|
Delaware VIP® REIT Series - Standard Class |
1,654,864 |
904,378 |
(5,762,965 |
) |
(4,000,638 |
) |
|||||||||||||
|
Delaware VIP® Small Cap Value Series - Standard Class |
5,361,022 |
6,526,550 |
(20,346,793 |
) |
(13,605,335 |
) |
|||||||||||||
|
Delaware VIP® Smid Cap Core Series - Standard Class |
18,290,858 |
17,619,824 |
(25,438,804 |
) |
(8,076,658 |
) |
|||||||||||||
|
Delaware VIP® U.S. Growth Series - Standard Class |
3,748,649 |
3,815,405 |
(4,566,132 |
) |
(899,876 |
) |
|||||||||||||
|
Delaware VIP® Value Series - Standard Class |
3,866,541 |
5,223,362 |
(7,916,742 |
) |
(2,013,897 |
) |
|||||||||||||
|
DWS Alternative Asset Allocation VIP Portfolio - Class A |
— |
(69,953 |
) |
(1,609,652 |
) |
(1,458,777 |
) |
||||||||||||
|
DWS Equity 500 Index VIP Portfolio - Class A |
3,974,529 |
5,434,081 |
(8,008,489 |
) |
(2,011,572 |
) |
|||||||||||||
|
DWS Small Cap Index VIP Portfolio - Class A |
794,404 |
1,027,581 |
(2,354,724 |
) |
(1,268,451 |
) |
|||||||||||||
|
Fidelity® VIP Asset Manager Portfolio - Initial Class |
19,901 |
17,242 |
(59,604 |
) |
(35,737 |
) |
|||||||||||||
|
Fidelity® VIP Contrafund® Portfolio - Service Class |
15,578,688 |
18,195,453 |
(31,702,946 |
) |
(13,423,768 |
) |
|||||||||||||
|
Fidelity® VIP Equity-Income Portfolio - Initial Class |
91,405 |
122,405 |
(315,574 |
) |
(161,779 |
) |
|||||||||||||
|
Fidelity® VIP Equity-Income Portfolio - Service Class |
283,494 |
297,605 |
(926,337 |
) |
(527,365 |
) |
|||||||||||||
|
Fidelity® VIP Growth Opportunities Portfolio - Service Class |
203,337 |
402,292 |
3,846 |
393,995 |
|||||||||||||||
|
Fidelity® VIP Growth Portfolio - Service Class |
5,441,424 |
6,488,366 |
(7,195,229 |
) |
(919,208 |
) |
|||||||||||||
|
Fidelity® VIP High Income Portfolio - Service Class |
— |
(4,555 |
) |
(151,687 |
) |
(70,401 |
) |
||||||||||||
|
Fidelity® VIP Investment Grade Bond Portfolio - Initial Class |
6,416 |
(3,733 |
) |
(27,617 |
) |
(13,700 |
) |
||||||||||||
|
Fidelity® VIP Mid Cap Portfolio - Service Class |
6,628,994 |
7,240,569 |
(19,824,611 |
) |
(12,609,215 |
) |
|||||||||||||
|
Fidelity® VIP Overseas Portfolio - Service Class |
— |
230,196 |
(1,326,231 |
) |
(1,023,069 |
) |
|||||||||||||
|
Franklin Income VIP Fund - Class 1 |
— |
268,947 |
(7,571,047 |
) |
(3,898,385 |
) |
|||||||||||||
|
Franklin Mutual Shares VIP Fund - Class 1 |
1,934,926 |
2,183,428 |
(8,158,252 |
) |
(4,840,315 |
) |
|||||||||||||
|
Franklin Small-Mid Cap Growth VIP Fund - Class 1 |
1,363,026 |
1,151,514 |
(1,785,923 |
) |
(690,380 |
) |
|||||||||||||
|
Invesco V.I. American Franchise Fund - Series I Shares |
761,304 |
1,256,213 |
(1,585,004 |
) |
(390,183 |
) |
|||||||||||||
|
Invesco V.I. Core Equity Fund - Series I Shares |
918,785 |
1,251,353 |
(2,660,595 |
) |
(1,353,737 |
) |
|||||||||||||
|
Invesco V.I. Core Plus Bond Fund - Series I Shares |
— |
(760 |
) |
(38,515 |
) |
(20,244 |
) |
||||||||||||
|
Invesco V.I. International Growth Fund - Series I Shares |
173,204 |
352,696 |
(4,686,934 |
) |
(3,985,335 |
) |
|||||||||||||
|
Janus Henderson Balanced Portfolio - Institutional Shares |
251,961 |
496,371 |
(607,713 |
) |
36,703 |
||||||||||||||
|
Janus Henderson Balanced Portfolio - Service Shares |
225,306 |
417,033 |
(515,925 |
) |
15,395 |
||||||||||||||
|
Janus Henderson Enterprise Portfolio - Service Shares |
268,690 |
509,164 |
(511,448 |
) |
(22,866 |
) |
|||||||||||||
|
Janus Henderson Global Research Portfolio - Institutional Shares |
— |
477,637 |
(1,135,935 |
) |
(601,105 |
) |
|||||||||||||
|
Janus Henderson Global Research Portfolio - Service Shares |
— |
103,171 |
(257,889 |
) |
(144,958 |
) |
|||||||||||||
|
Janus Henderson Global Technology Portfolio - Service Shares |
123,500 |
251,804 |
(227,405 |
) |
9,329 |
||||||||||||||
|
JPMorgan Insurance Trust Global Allocation Portfolio - Class 1 |
104,007 |
100,712 |
(1,419,626 |
) |
(1,434,509 |
) |
|||||||||||||
|
LVIP Baron Growth Opportunities Fund - Service Class |
1,553,212 |
2,900,980 |
(4,360,682 |
) |
(1,670,561 |
) |
|||||||||||||
|
LVIP Baron Growth Opportunities Fund - Standard Class |
54,122 |
108,200 |
(167,187 |
) |
(64,646 |
) |
|||||||||||||
|
LVIP BlackRock Dividend Value Managed Volatility Fund - Standard Class |
— |
602,730 |
(4,721,987 |
) |
(3,505,493 |
) |
|||||||||||||
|
LVIP BlackRock Global Growth ETF Allocation Managed Risk Fund - Standard Class |
— |
48,301 |
(971,519 |
) |
(729,855 |
) |
|||||||||||||
|
LVIP BlackRock Inflation Protected Bond Fund - Standard Class |
— |
(101,042 |
) |
(1,436,362 |
) |
(107,834 |
) |
||||||||||||
M-7
Lincoln Life Flexible Premium Variable Life Account M
Statements of operations (continued)
Year Ended December 31, 2018
|
Subaccount |
Dividends from Investment Income |
Mortality and Expense Guarantee Charges |
Net Investment Income (Loss) |
Net Realized Gain (Loss) on Investments |
|||||||||||||||
|
LVIP BlackRock U.S. Growth ETF Allocation Managed Risk Fund - Standard Class |
$ |
61,735 |
$ |
(27,156 |
) |
$ |
34,579 |
$ |
19,226 |
||||||||||
|
LVIP Blended Large Cap Growth Managed Volatility Fund - Standard Class |
61,309 |
(43,254 |
) |
18,055 |
316,451 |
||||||||||||||
|
LVIP Blended Mid Cap Managed Volatility Fund - Standard Class |
— |
(53,330 |
) |
(53,330 |
) |
329,993 |
|||||||||||||
|
LVIP Clarion Global Real Estate Fund - Standard Class |
912,800 |
(131,304 |
) |
781,496 |
319,164 |
||||||||||||||
|
LVIP ClearBridge Large Cap Managed Volatility Fund - Standard Class |
11,770 |
(9,096 |
) |
2,674 |
16,621 |
||||||||||||||
|
LVIP Delaware Bond Fund - Standard Class |
4,988,985 |
(813,294 |
) |
4,175,691 |
(570,683 |
) |
|||||||||||||
|
LVIP Delaware Diversified Floating Rate Fund - Standard Class |
956,110 |
(154,035 |
) |
802,075 |
16,063 |
||||||||||||||
|
LVIP Delaware Social Awareness Fund - Standard Class |
101,027 |
(35,467 |
) |
65,560 |
37,967 |
||||||||||||||
|
LVIP Delaware Special Opportunities Fund - Standard Class |
200,942 |
(81,272 |
) |
119,670 |
51,133 |
||||||||||||||
|
LVIP Delaware Wealth Builder Fund - Standard Class |
82,472 |
(10,702 |
) |
71,770 |
(4,666 |
) |
|||||||||||||
|
LVIP Dimensional International Core Equity Fund - Standard Class |
343,347 |
(112,910 |
) |
230,437 |
4,729 |
||||||||||||||
|
LVIP Dimensional International Equity Managed Volatility Fund - Standard Class |
230,903 |
(68,025 |
) |
162,878 |
62,870 |
||||||||||||||
|
LVIP Dimensional U.S. Core Equity 1 Fund - Standard Class |
318,588 |
(111,066 |
) |
207,522 |
261,036 |
||||||||||||||
|
LVIP Dimensional U.S. Core Equity 2 Fund - Standard Class |
241,703 |
(135,255 |
) |
106,448 |
201,195 |
||||||||||||||
|
LVIP Dimensional U.S. Equity Managed Volatility Fund - Standard Class |
133,266 |
(77,086 |
) |
56,180 |
338,331 |
||||||||||||||
|
LVIP Dimensional/Vanguard Total Bond Fund - Standard Class |
1,559,384 |
(455,979 |
) |
1,103,405 |
(126,931 |
) |
|||||||||||||
|
LVIP Franklin Templeton Global Equity Managed Volatility Fund - Standard Class |
115,113 |
(41,119 |
) |
73,994 |
186,895 |
||||||||||||||
|
LVIP Global Conservative Allocation Managed Risk Fund - Standard Class |
1,148,272 |
(258,629 |
) |
889,643 |
159,265 |
||||||||||||||
|
LVIP Global Growth Allocation Managed Risk Fund - Standard Class |
3,032,264 |
(640,437 |
) |
2,391,827 |
2,315,188 |
||||||||||||||
|
LVIP Global Income Fund - Standard Class |
530,489 |
(70,138 |
) |
460,351 |
(3,909 |
) |
|||||||||||||
|
LVIP Global Moderate Allocation Managed Risk Fund - Standard Class |
2,495,564 |
(548,901 |
) |
1,946,663 |
2,848,851 |
||||||||||||||
|
LVIP Government Money Market Fund - Standard Class |
1,186,968 |
(515,350 |
) |
671,618 |
— |
||||||||||||||
|
LVIP Invesco Diversified Equity-Income Managed Volatility Fund - Standard Class |
31,738 |
(13,122 |
) |
18,616 |
6,959 |
||||||||||||||
|
LVIP JPMorgan High Yield Fund - Standard Class |
2,847,107 |
(304,673 |
) |
2,542,434 |
(261,360 |
) |
|||||||||||||
|
LVIP JPMorgan Select Mid Cap Value Managed Volatility Fund - Standard Class |
206,277 |
(93,177 |
) |
113,100 |
223,018 |
||||||||||||||
|
LVIP MFS International Growth Fund - Standard Class |
494,776 |
(209,034 |
) |
285,742 |
1,037,040 |
||||||||||||||
|
LVIP MFS Value Fund - Standard Class |
1,875,233 |
(613,167 |
) |
1,262,066 |
1,497,244 |
||||||||||||||
|
LVIP Mondrian International Value Fund - Standard Class |
1,276,747 |
(214,045 |
) |
1,062,702 |
169,153 |
||||||||||||||
|
LVIP Multi-Manager Global Equity Managed Volatility Fund - Standard Class |
2,777 |
(2,717 |
) |
60 |
34,071 |
||||||||||||||
|
LVIP SSGA Bond Index Fund - Standard Class |
1,389,490 |
(326,596 |
) |
1,062,894 |
(147,756 |
) |
|||||||||||||
|
LVIP SSGA Conservative Index Allocation Fund - Standard Class |
502,043 |
(154,689 |
) |
347,354 |
62,392 |
||||||||||||||
|
LVIP SSGA Conservative Structured Allocation Fund - Standard Class |
372,645 |
(84,143 |
) |
288,502 |
2,895 |
||||||||||||||
|
LVIP SSGA Developed International 150 Fund - Standard Class |
952,562 |
(175,794 |
) |
776,768 |
7,722 |
||||||||||||||
|
LVIP SSGA Emerging Markets 100 Fund - Standard Class |
1,902,851 |
(236,145 |
) |
1,666,706 |
23,017 |
||||||||||||||
|
LVIP SSGA Global Tactical Allocation Managed Volatility Fund - Standard Class |
671,763 |
(116,479 |
) |
555,284 |
210,177 |
||||||||||||||
|
LVIP SSGA International Index Fund - Standard Class |
1,272,722 |
(311,000 |
) |
961,722 |
149,894 |
||||||||||||||
|
LVIP SSGA International Managed Volatility Fund - Standard Class |
241,969 |
(70,136 |
) |
171,833 |
56,336 |
||||||||||||||
|
LVIP SSGA Large Cap 100 Fund - Standard Class |
768,007 |
(215,395 |
) |
552,612 |
(137,511 |
) |
|||||||||||||
|
LVIP SSGA Moderate Index Allocation Fund - Standard Class |
2,003,282 |
(619,809 |
) |
1,383,473 |
337,757 |
||||||||||||||
|
LVIP SSGA Moderate Structured Allocation Fund - Standard Class |
2,079,256 |
(483,586 |
) |
1,595,670 |
202,161 |
||||||||||||||
|
LVIP SSGA Moderately Aggressive Index Allocation Fund - Standard Class |
2,331,092 |
(751,308 |
) |
1,579,784 |
710,207 |
||||||||||||||
|
LVIP SSGA Moderately Aggressive Structured Allocation Fund - Standard Class |
1,958,796 |
(374,743 |
) |
1,584,053 |
206,351 |
||||||||||||||
|
LVIP SSGA S&P 500 Index Fund - Standard Class |
8,349,867 |
(3,096,092 |
) |
5,253,775 |
5,546,036 |
||||||||||||||
|
LVIP SSGA Small-Cap Index Fund - Standard Class |
602,306 |
(391,258 |
) |
211,048 |
1,844,364 |
||||||||||||||
|
LVIP SSGA Small-Mid Cap 200 Fund - Standard Class |
1,320,456 |
(291,288 |
) |
1,029,168 |
42,751 |
||||||||||||||
|
LVIP T. Rowe Price 2010 Fund - Standard Class |
5,024 |
(756 |
) |
4,268 |
385 |
||||||||||||||
|
LVIP T. Rowe Price 2020 Fund - Standard Class |
19,200 |
(3,786 |
) |
15,414 |
39,299 |
||||||||||||||
|
LVIP T. Rowe Price 2030 Fund - Standard Class |
39,366 |
(6,808 |
) |
32,558 |
81,692 |
||||||||||||||
|
LVIP T. Rowe Price 2040 Fund - Standard Class |
57,867 |
(12,556 |
) |
45,311 |
73,604 |
||||||||||||||
|
LVIP T. Rowe Price Growth Stock Fund - Standard Class |
122,196 |
(433,735 |
) |
(311,539 |
) |
2,019,794 |
|||||||||||||
|
LVIP T. Rowe Price Structured Mid-Cap Growth Fund - Standard Class |
140,439 |
(224,972 |
) |
(84,533 |
) |
705,848 |
|||||||||||||
|
LVIP U.S. Growth Allocation Managed Risk Fund - Standard Class |
178,405 |
(62,807 |
) |
115,598 |
84,002 |
||||||||||||||
See accompanying notes.
M-8
|
Subaccount |
Dividends from Net Realized Gain on Investments |
Total Net Realized Gain (Loss) on Investments |
Net Change in Unrealized Appreciation or Depreciation on Investments |
Net Increase (Decrease) in Net Assets Resulting from Operations |
|||||||||||||||
|
LVIP BlackRock U.S. Growth ETF Allocation Managed Risk Fund - Standard Class |
$ |
— |
$ |
19,226 |
$ |
(200,037 |
) |
$ |
(146,232 |
) |
|||||||||
|
LVIP Blended Large Cap Growth Managed Volatility Fund - Standard Class |
840,278 |
1,156,729 |
(1,557,815 |
) |
(383,031 |
) |
|||||||||||||
|
LVIP Blended Mid Cap Managed Volatility Fund - Standard Class |
— |
329,993 |
(268,143 |
) |
8,520 |
||||||||||||||
|
LVIP Clarion Global Real Estate Fund - Standard Class |
— |
319,164 |
(3,228,052 |
) |
(2,127,392 |
) |
|||||||||||||
|
LVIP ClearBridge Large Cap Managed Volatility Fund - Standard Class |
24,999 |
41,620 |
(113,602 |
) |
(69,308 |
) |
|||||||||||||
|
LVIP Delaware Bond Fund - Standard Class |
— |
(570,683 |
) |
(5,564,447 |
) |
(1,959,439 |
) |
||||||||||||
|
LVIP Delaware Diversified Floating Rate Fund - Standard Class |
— |
16,063 |
(926,883 |
) |
(108,745 |
) |
|||||||||||||
|
LVIP Delaware Social Awareness Fund - Standard Class |
713,019 |
750,986 |
(1,187,312 |
) |
(370,766 |
) |
|||||||||||||
|
LVIP Delaware Special Opportunities Fund - Standard Class |
1,313,164 |
1,364,297 |
(3,746,876 |
) |
(2,262,909 |
) |
|||||||||||||
|
LVIP Delaware Wealth Builder Fund - Standard Class |
509,637 |
504,971 |
(732,452 |
) |
(155,711 |
) |
|||||||||||||
|
LVIP Dimensional International Core Equity Fund - Standard Class |
— |
4,729 |
(3,647,541 |
) |
(3,412,375 |
) |
|||||||||||||
|
LVIP Dimensional International Equity Managed Volatility Fund - Standard Class |
— |
62,870 |
(2,324,986 |
) |
(2,099,238 |
) |
|||||||||||||
|
LVIP Dimensional U.S. Core Equity 1 Fund - Standard Class |
415,023 |
676,059 |
(2,764,110 |
) |
(1,880,529 |
) |
|||||||||||||
|
LVIP Dimensional U.S. Core Equity 2 Fund - Standard Class |
— |
201,195 |
(2,743,223 |
) |
(2,435,580 |
) |
|||||||||||||
|
LVIP Dimensional U.S. Equity Managed Volatility Fund - Standard Class |
— |
338,331 |
(1,399,809 |
) |
(1,005,298 |
) |
|||||||||||||
|
LVIP Dimensional/Vanguard Total Bond Fund - Standard Class |
36,762 |
(90,169 |
) |
(1,362,849 |
) |
(349,613 |
) |
||||||||||||
|
LVIP Franklin Templeton Global Equity Managed Volatility Fund - Standard Class |
— |
186,895 |
(1,046,427 |
) |
(785,538 |
) |
|||||||||||||
|
LVIP Global Conservative Allocation Managed Risk Fund - Standard Class |
610,846 |
770,111 |
(3,815,377 |
) |
(2,155,623 |
) |
|||||||||||||
|
LVIP Global Growth Allocation Managed Risk Fund - Standard Class |
— |
2,315,188 |
(13,179,042 |
) |
(8,472,027 |
) |
|||||||||||||
|
LVIP Global Income Fund - Standard Class |
19,681 |
15,772 |
(303,448 |
) |
172,675 |
||||||||||||||
|
LVIP Global Moderate Allocation Managed Risk Fund - Standard Class |
448,008 |
3,296,859 |
(11,174,877 |
) |
(5,931,355 |
) |
|||||||||||||
|
LVIP Government Money Market Fund - Standard Class |
16 |
16 |
2 |
671,636 |
|||||||||||||||
|
LVIP Invesco Diversified Equity-Income Managed Volatility Fund - Standard Class |
54,699 |
61,658 |
(242,441 |
) |
(162,167 |
) |
|||||||||||||
|
LVIP JPMorgan High Yield Fund - Standard Class |
— |
(261,360 |
) |
(4,008,286 |
) |
(1,727,212 |
) |
||||||||||||
|
LVIP JPMorgan Select Mid Cap Value Managed Volatility Fund - Standard Class |
— |
223,018 |
(2,165,049 |
) |
(1,828,931 |
) |
|||||||||||||
|
LVIP MFS International Growth Fund - Standard Class |
353,804 |
1,390,844 |
(5,013,321 |
) |
(3,336,735 |
) |
|||||||||||||
|
LVIP MFS Value Fund - Standard Class |
3,587,442 |
5,084,686 |
(17,464,382 |
) |
(11,117,630 |
) |
|||||||||||||
|
LVIP Mondrian International Value Fund - Standard Class |
497,553 |
666,706 |
(6,558,947 |
) |
(4,829,539 |
) |
|||||||||||||
|
LVIP Multi-Manager Global Equity Managed Volatility Fund - Standard Class |
23,207 |
57,278 |
(77,225 |
) |
(19,887 |
) |
|||||||||||||
|
LVIP SSGA Bond Index Fund - Standard Class |
— |
(147,756 |
) |
(1,137,567 |
) |
(222,429 |
) |
||||||||||||
|
LVIP SSGA Conservative Index Allocation Fund - Standard Class |
93,894 |
156,286 |
(1,566,983 |
) |
(1,063,343 |
) |
|||||||||||||
|
LVIP SSGA Conservative Structured Allocation Fund - Standard Class |
128,052 |
130,947 |
(1,139,861 |
) |
(720,412 |
) |
|||||||||||||
|
LVIP SSGA Developed International 150 Fund - Standard Class |
639,213 |
646,935 |
(5,697,506 |
) |
(4,273,803 |
) |
|||||||||||||
|
LVIP SSGA Emerging Markets 100 Fund - Standard Class |
— |
23,017 |
(6,931,970 |
) |
(5,242,247 |
) |
|||||||||||||
|
LVIP SSGA Global Tactical Allocation Managed Volatility Fund - Standard Class |
— |
210,177 |
(2,812,589 |
) |
(2,047,128 |
) |
|||||||||||||
|
LVIP SSGA International Index Fund - Standard Class |
— |
149,894 |
(8,010,764 |
) |
(6,899,148 |
) |
|||||||||||||
|
LVIP SSGA International Managed Volatility Fund - Standard Class |
— |
56,336 |
(1,615,988 |
) |
(1,387,819 |
) |
|||||||||||||
|
LVIP SSGA Large Cap 100 Fund - Standard Class |
1,979,458 |
1,841,947 |
(6,463,343 |
) |
(4,068,784 |
) |
|||||||||||||
|
LVIP SSGA Moderate Index Allocation Fund - Standard Class |
316,140 |
653,897 |
(8,228,274 |
) |
(6,190,904 |
) |
|||||||||||||
|
LVIP SSGA Moderate Structured Allocation Fund - Standard Class |
871,975 |
1,074,136 |
(7,880,325 |
) |
(5,210,519 |
) |
|||||||||||||
|
LVIP SSGA Moderately Aggressive Index Allocation Fund - Standard Class |
428,574 |
1,138,781 |
(11,558,807 |
) |
(8,840,242 |
) |
|||||||||||||
|
LVIP SSGA Moderately Aggressive Structured Allocation Fund - Standard Class |
352,989 |
559,340 |
(7,477,667 |
) |
(5,334,274 |
) |
|||||||||||||
|
LVIP SSGA S&P 500 Index Fund - Standard Class |
7,839,175 |
13,385,211 |
(44,634,350 |
) |
(25,995,364 |
) |
|||||||||||||
|
LVIP SSGA Small-Cap Index Fund - Standard Class |
2,044,803 |
3,889,167 |
(11,523,412 |
) |
(7,423,197 |
) |
|||||||||||||
|
LVIP SSGA Small-Mid Cap 200 Fund - Standard Class |
1,001,617 |
1,044,368 |
(8,029,485 |
) |
(5,955,949 |
) |
|||||||||||||
|
LVIP T. Rowe Price 2010 Fund - Standard Class |
14,966 |
15,351 |
(30,227 |
) |
(10,608 |
) |
|||||||||||||
|
LVIP T. Rowe Price 2020 Fund - Standard Class |
50,972 |
90,271 |
(168,721 |
) |
(63,036 |
) |
|||||||||||||
|
LVIP T. Rowe Price 2030 Fund - Standard Class |
59,319 |
141,011 |
(349,724 |
) |
(176,155 |
) |
|||||||||||||
|
LVIP T. Rowe Price 2040 Fund - Standard Class |
135,316 |
208,920 |
(583,399 |
) |
(329,168 |
) |
|||||||||||||
|
LVIP T. Rowe Price Growth Stock Fund - Standard Class |
5,189,127 |
7,208,921 |
(8,778,898 |
) |
(1,881,516 |
) |
|||||||||||||
|
LVIP T. Rowe Price Structured Mid-Cap Growth Fund - Standard Class |
2,732,937 |
3,438,785 |
(4,863,061 |
) |
(1,508,809 |
) |
|||||||||||||
|
LVIP U.S. Growth Allocation Managed Risk Fund - Standard Class |
1,468 |
85,470 |
(830,801 |
) |
(629,733 |
) |
|||||||||||||
M-9
Lincoln Life Flexible Premium Variable Life Account M
Statements of operations (continued)
Year Ended December 31, 2018
|
Subaccount |
Dividends from Investment Income |
Mortality and Expense Guarantee Charges |
Net Investment Income (Loss) |
Net Realized Gain (Loss) on Investments |
|||||||||||||||
|
LVIP Vanguard Domestic Equity ETF Fund - Standard Class |
$ |
1,475,836 |
$ |
(665,443 |
) |
$ |
810,393 |
$ |
1,531,056 |
||||||||||
|
LVIP Vanguard International Equity ETF Fund - Standard Class |
1,623,912 |
(470,976 |
) |
1,152,936 |
308,142 |
||||||||||||||
|
LVIP Wellington Capital Growth Fund - Standard Class |
— |
(157,108 |
) |
(157,108 |
) |
857,500 |
|||||||||||||
|
LVIP Wellington Mid-Cap Value Fund - Standard Class |
168,736 |
(146,050 |
) |
22,686 |
367,233 |
||||||||||||||
|
M Capital Appreciation Fund |
4,822 |
(4,897 |
) |
(75 |
) |
26,077 |
|||||||||||||
|
M International Equity Fund |
27,463 |
(4,596 |
) |
22,867 |
13,380 |
||||||||||||||
|
M Large Cap Growth Fund |
— |
(9,583 |
) |
(9,583 |
) |
212,242 |
|||||||||||||
|
M Large Cap Value Fund |
32,556 |
(6,064 |
) |
26,492 |
41,210 |
||||||||||||||
|
MFS® VIT Growth Series - Initial Class |
44,134 |
(284,033 |
) |
(239,899 |
) |
1,801,572 |
|||||||||||||
|
MFS® VIT Total Return Series - Initial Class |
1,017,259 |
(253,503 |
) |
763,756 |
321,811 |
||||||||||||||
|
MFS® VIT Utilities Series - Initial Class |
439,012 |
(211,220 |
) |
227,792 |
300,416 |
||||||||||||||
|
MFS® VIT II Core Equity Portfolio - Initial Class |
6,896 |
(4,241 |
) |
2,655 |
13,183 |
||||||||||||||
|
Neuberger Berman AMT Large Cap Value Portfolio - I Class |
17,758 |
(8,495 |
) |
9,263 |
66,442 |
||||||||||||||
|
Neuberger Berman AMT Mid Cap Growth Portfolio - I Class |
— |
(82,823 |
) |
(82,823 |
) |
356,182 |
|||||||||||||
|
Neuberger Berman AMT Mid Cap Intrinsic Value Portfolio - I Class |
40,278 |
(23,788 |
) |
16,490 |
138,496 |
||||||||||||||
|
PIMCO VIT CommodityRealReturn® Strategy Portfolio - Administrative Class |
497,359 |
(133,768 |
) |
363,591 |
(795,647 |
) |
|||||||||||||
|
Putnam VT Equity Income Fund - Class IB |
11,765 |
(8,179 |
) |
3,586 |
16,123 |
||||||||||||||
|
Putnam VT Global Health Care Fund - Class IB |
18,317 |
(9,609 |
) |
8,708 |
(23,699 |
) |
|||||||||||||
|
Templeton Foreign VIP Fund - Class 1 |
36,016 |
(6,867 |
) |
29,149 |
4,765 |
||||||||||||||
|
Templeton Foreign VIP Fund - Class 2 |
90,021 |
(17,970 |
) |
72,051 |
(27,343 |
) |
|||||||||||||
|
Templeton Global Bond VIP Fund - Class 1 |
— |
(276,304 |
) |
(276,304 |
) |
(52,437 |
) |
||||||||||||
|
Templeton Growth VIP Fund - Class 1 |
176,086 |
(33,123 |
) |
142,963 |
120,371 |
||||||||||||||
|
Templeton Growth VIP Fund - Class 2 |
23,221 |
(5,560 |
) |
17,661 |
19,903 |
||||||||||||||
See accompanying notes.
M-10
|
Subaccount |
Dividends from Net Realized Gain on Investments |
Total Net Realized Gain (Loss) on Investments |
Net Change in Unrealized Appreciation or Depreciation on Investments |
Net Increase (Decrease) in Net Assets Resulting from Operations |
|||||||||||||||
|
LVIP Vanguard Domestic Equity ETF Fund - Standard Class |
$ |
209,431 |
$ |
1,740,487 |
$ |
(8,263,156 |
) |
$ |
(5,712,276 |
) |
|||||||||
|
LVIP Vanguard International Equity ETF Fund - Standard Class |
— |
308,142 |
(12,778,822 |
) |
(11,317,744 |
) |
|||||||||||||
|
LVIP Wellington Capital Growth Fund - Standard Class |
1,835,652 |
2,693,152 |
(3,169,226 |
) |
(633,182 |
) |
|||||||||||||
|
LVIP Wellington Mid-Cap Value Fund - Standard Class |
723,832 |
1,091,065 |
(4,857,353 |
) |
(3,743,602 |
) |
|||||||||||||
|
M Capital Appreciation Fund |
297,108 |
323,185 |
(535,501 |
) |
(212,391 |
) |
|||||||||||||
|
M International Equity Fund |
— |
13,380 |
(456,174 |
) |
(419,927 |
) |
|||||||||||||
|
M Large Cap Growth Fund |
326,346 |
538,588 |
(669,086 |
) |
(140,081 |
) |
|||||||||||||
|
M Large Cap Value Fund |
161,299 |
202,509 |
(504,589 |
) |
(275,588 |
) |
|||||||||||||
|
MFS® VIT Growth Series - Initial Class |
3,275,023 |
5,076,595 |
(4,401,116 |
) |
435,580 |
||||||||||||||
|
MFS® VIT Total Return Series - Initial Class |
2,072,771 |
2,394,582 |
(6,049,394 |
) |
(2,891,056 |
) |
|||||||||||||
|
MFS® VIT Utilities Series - Initial Class |
152,427 |
452,843 |
(401,868 |
) |
278,767 |
||||||||||||||
|
MFS® VIT II Core Equity Portfolio - Initial Class |
106,353 |
119,536 |
(160,932 |
) |
(38,741 |
) |
|||||||||||||
|
Neuberger Berman AMT Large Cap Value Portfolio - I Class |
158,009 |
224,451 |
(253,021 |
) |
(19,307 |
) |
|||||||||||||
|
Neuberger Berman AMT Mid Cap Growth Portfolio - I Class |
1,318,651 |
1,674,833 |
(2,620,821 |
) |
(1,028,811 |
) |
|||||||||||||
|
Neuberger Berman AMT Mid Cap Intrinsic Value Portfolio - I Class |
279,043 |
417,539 |
(1,347,829 |
) |
(913,800 |
) |
|||||||||||||
|
PIMCO VIT CommodityRealReturn® Strategy Portfolio - Administrative Class |
— |
(795,647 |
) |
(3,245,940 |
) |
(3,677,996 |
) |
||||||||||||
|
Putnam VT Equity Income Fund - Class IB |
75,457 |
91,580 |
(234,926 |
) |
(139,760 |
) |
|||||||||||||
|
Putnam VT Global Health Care Fund - Class IB |
305,141 |
281,442 |
(303,322 |
) |
(13,172 |
) |
|||||||||||||
|
Templeton Foreign VIP Fund - Class 1 |
— |
4,765 |
(237,352 |
) |
(203,438 |
) |
|||||||||||||
|
Templeton Foreign VIP Fund - Class 2 |
— |
(27,343 |
) |
(584,380 |
) |
(539,672 |
) |
||||||||||||
|
Templeton Global Bond VIP Fund - Class 1 |
— |
(52,437 |
) |
971,607 |
642,866 |
||||||||||||||
|
Templeton Growth VIP Fund - Class 1 |
653,798 |
774,169 |
(2,106,628 |
) |
(1,189,496 |
) |
|||||||||||||
|
Templeton Growth VIP Fund - Class 2 |
98,346 |
118,249 |
(319,425 |
) |
(183,515 |
) |
|||||||||||||
M-11
Lincoln Life Flexible Premium Variable Life Account M
Statements of changes in net assets
Years Ended December 31, 2017 and 2018
|
AB VPS Global Thematic Growth Portfolio - Class A Subaccount |
AB VPS Growth and Income Portfolio - Class A Subaccount |
AB VPS International Value Portfolio - Class A Subaccount |
AB VPS Large Cap Growth Portfolio - Class A Subaccount |
AB VPS Small/Mid Cap Value Portfolio - Class A Subaccount |
American Century VP Balanced Fund - Class I Subaccount |
American Century VP Inflation Protection Fund - Class I Subaccount |
|||||||||||||||||||||||||
|
NET ASSETS AT JANUARY 1, 2017 |
$ |
5,477,044 |
$ |
19,044,608 |
$ |
8,805,530 |
$ |
2,539,571 |
$ |
35,255,726 |
$ |
1,582,479 |
$ |
12,142,362 |
|||||||||||||||||
|
Changes From Operations: |
|||||||||||||||||||||||||||||||
|
• Net investment income (loss) |
(4,521 |
) |
204,672 |
181,503 |
(12,976 |
) |
(24,339 |
) |
34,404 |
308,712 |
|||||||||||||||||||||
|
• Net realized gain (loss) on investments |
277,268 |
2,527,117 |
(11,741 |
) |
259,613 |
2,316,853 |
193,288 |
(123,030 |
) |
||||||||||||||||||||||
|
• Net change in unrealized appreciation or depreciation on investments |
1,769,863 |
605,374 |
1,965,945 |
485,605 |
2,580,662 |
226,281 |
248,213 |
||||||||||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS |
2,042,610 |
3,337,163 |
2,135,707 |
732,242 |
4,873,176 |
453,973 |
433,895 |
||||||||||||||||||||||||
|
Change From Unit Transactions: |
|||||||||||||||||||||||||||||||
|
• Net unit transactions |
1,074,982 |
(1,601,025 |
) |
(601,438 |
) |
(365,920 |
) |
3,974,383 |
4,422,129 |
(169,832 |
) |
||||||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM UNIT TRANSACTIONS |
1,074,982 |
(1,601,025 |
) |
(601,438 |
) |
(365,920 |
) |
3,974,383 |
4,422,129 |
(169,832 |
) |
||||||||||||||||||||
|
TOTAL INCREASE (DECREASE) IN NET ASSETS |
3,117,592 |
1,736,138 |
1,534,269 |
366,322 |
8,847,559 |
4,876,102 |
264,063 |
||||||||||||||||||||||||
|
NET ASSETS AT DECEMBER 31, 2017 |
8,594,636 |
20,780,746 |
10,339,799 |
2,905,893 |
44,103,285 |
6,458,581 |
12,406,425 |
||||||||||||||||||||||||
|
Changes From Operations: |
|||||||||||||||||||||||||||||||
|
• Net investment income (loss) |
(49,174 |
) |
116,445 |
124,707 |
(14,842 |
) |
(29,858 |
) |
88,785 |
326,100 |
|||||||||||||||||||||
|
• Net realized gain (loss) on investments |
539,359 |
2,862,771 |
89,870 |
489,658 |
4,133,816 |
116,808 |
(213,979 |
) |
|||||||||||||||||||||||
|
• Net change in unrealized appreciation or depreciation on investments |
(1,404,622 |
) |
(4,020,512 |
) |
(2,634,348 |
) |
(436,316 |
) |
(11,214,063 |
) |
(745,134 |
) |
(466,367 |
) |
|||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS |
(914,437 |
) |
(1,041,296 |
) |
(2,419,771 |
) |
38,500 |
(7,110,105 |
) |
(539,541 |
) |
(354,246 |
) |
||||||||||||||||||
|
Change From Unit Transactions: |
|||||||||||||||||||||||||||||||
|
• Net unit transactions |
471,058 |
(2,971,065 |
) |
505,786 |
366,031 |
2,603,687 |
12,544,977 |
(850,071 |
) |
||||||||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM UNIT TRANSACTIONS |
471,058 |
(2,971,065 |
) |
505,786 |
366,031 |
2,603,687 |
12,544,977 |
(850,071 |
) |
||||||||||||||||||||||
|
TOTAL INCREASE (DECREASE) IN NET ASSETS |
(443,379 |
) |
(4,012,361 |
) |
(1,913,985 |
) |
404,531 |
(4,506,418 |
) |
12,005,436 |
(1,204,317 |
) |
|||||||||||||||||||
|
NET ASSETS AT DECEMBER 31, 2018 |
$ |
8,151,257 |
$ |
16,768,385 |
$ |
8,425,814 |
$ |
3,310,424 |
$ |
39,596,867 |
$ |
18,464,017 |
$ |
11,202,108 |
|||||||||||||||||
See accompanying notes.
M-12
|
American Funds Global Growth Fund - Class 2 Subaccount |
American Funds Global Small Capitalization Fund - Class 2 Subaccount |
American Funds Growth Fund - Class 2 Subaccount |
American Funds Growth-Income Fund - Class 2 Subaccount |
American Funds International Fund - Class 2 Subaccount |
BlackRock Global Allocation V.I. Fund - Class I Subaccount |
||||||||||||||||||||||
|
NET ASSETS AT JANUARY 1, 2017 |
$ |
58,234,955 |
$ |
57,801,698 |
$ |
208,322,080 |
$ |
210,742,257 |
$ |
123,514,398 |
$ |
153,277,088 |
|||||||||||||||
|
Changes From Operations: |
|||||||||||||||||||||||||||
|
• Net investment income (loss) |
96,647 |
(96,224 |
) |
(13,914 |
) |
2,330,594 |
1,147,191 |
1,269,637 |
|||||||||||||||||||
|
• Net realized gain (loss) on investments |
3,346,056 |
248,351 |
26,980,409 |
18,323,567 |
2,933,660 |
2,071,508 |
|||||||||||||||||||||
|
• Net change in unrealized appreciation or depreciation on investments |
15,380,104 |
14,869,021 |
31,679,429 |
28,092,809 |
35,773,123 |
17,730,128 |
|||||||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS |
18,822,807 |
15,021,148 |
58,645,924 |
48,746,970 |
39,853,974 |
21,071,273 |
|||||||||||||||||||||
|
Change From Unit Transactions: |
|||||||||||||||||||||||||||
|
• Net unit transactions |
9,474,879 |
4,358,894 |
14,571,216 |
29,236,331 |
8,941,716 |
18,597,544 |
|||||||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM UNIT TRANSACTIONS |
9,474,879 |
4,358,894 |
14,571,216 |
29,236,331 |
8,941,716 |
18,597,544 |
|||||||||||||||||||||
|
TOTAL INCREASE (DECREASE) IN NET ASSETS |
28,297,686 |
19,380,042 |
73,217,140 |
77,983,301 |
48,795,690 |
39,668,817 |
|||||||||||||||||||||
|
NET ASSETS AT DECEMBER 31, 2017 |
86,532,641 |
77,181,740 |
281,539,220 |
288,725,558 |
172,310,088 |
192,945,905 |
|||||||||||||||||||||
|
Changes From Operations: |
|||||||||||||||||||||||||||
|
• Net investment income (loss) |
132,030 |
(407,162 |
) |
(313,706 |
) |
2,769,123 |
2,230,130 |
648,955 |
|||||||||||||||||||
|
• Net realized gain (loss) on investments |
7,843,819 |
4,550,649 |
36,267,308 |
25,510,909 |
9,919,153 |
7,959,013 |
|||||||||||||||||||||
|
• Net change in unrealized appreciation or depreciation on investments |
(18,161,695 |
) |
(13,403,495 |
) |
(39,428,677 |
) |
(36,322,051 |
) |
(38,240,873 |
) |
(25,137,788 |
) |
|||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS |
(10,185,846 |
) |
(9,260,008 |
) |
(3,475,075 |
) |
(8,042,019 |
) |
(26,091,590 |
) |
(16,529,820 |
) |
|||||||||||||||
|
Change From Unit Transactions: |
|||||||||||||||||||||||||||
|
• Net unit transactions |
20,403,323 |
7,725,302 |
18,778,442 |
23,933,104 |
24,516,066 |
15,533,820 |
|||||||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM UNIT TRANSACTIONS |
20,403,323 |
7,725,302 |
18,778,442 |
23,933,104 |
24,516,066 |
15,533,820 |
|||||||||||||||||||||
|
TOTAL INCREASE (DECREASE) IN NET ASSETS |
10,217,477 |
(1,534,706 |
) |
15,303,367 |
15,891,085 |
(1,575,524 |
) |
(996,000 |
) |
||||||||||||||||||
|
NET ASSETS AT DECEMBER 31, 2018 |
$ |
96,750,118 |
$ |
75,647,034 |
$ |
296,842,587 |
$ |
304,616,643 |
$ |
170,734,564 |
$ |
191,949,905 |
|||||||||||||||
M-13
Lincoln Life Flexible Premium Variable Life Account M
Statements of changes in net assets (continued)
Years Ended December 31, 2017 and 2018
|
ClearBridge Variable Mid Cap Portfolio - Class I Subaccount |
Delaware VIP® Diversified Income Series - Standard Class Subaccount |
Delaware VIP® Emerging Markets Series - Standard Class Subaccount |
Delaware VIP® High Yield Series - Standard Class Subaccount |
Delaware VIP® Limited-Term Diversified Income Series - Standard Class Subaccount |
Delaware VIP® REIT Series - Standard Class Subaccount |
Delaware VIP® Small Cap Value Series - Standard Class Subaccount |
|||||||||||||||||||||||||
|
NET ASSETS AT JANUARY 1, 2017 |
$ |
6,099,071 |
$ |
52,057,689 |
$ |
51,078,363 |
$ |
19,916,891 |
$ |
33,450,746 |
$ |
51,206,803 |
$ |
64,478,321 |
|||||||||||||||||
|
Changes From Operations: |
|||||||||||||||||||||||||||||||
|
• Net investment income (loss) |
(20,007 |
) |
1,179,971 |
29,420 |
1,074,066 |
657,909 |
517,347 |
202,700 |
|||||||||||||||||||||||
|
• Net realized gain (loss) on investments |
755,828 |
(114,777 |
) |
2,099,050 |
(255,608 |
) |
(11,289 |
) |
7,338,458 |
4,128,869 |
|||||||||||||||||||||
|
• Net change in unrealized appreciation or depreciation on investments |
360,063 |
1,528,991 |
18,511,714 |
544,025 |
15,469 |
(7,270,430 |
) |
3,226,071 |
|||||||||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS |
1,095,884 |
2,594,185 |
20,640,184 |
1,362,483 |
662,089 |
585,375 |
7,557,640 |
||||||||||||||||||||||||
|
Change From Unit Transactions: |
|||||||||||||||||||||||||||||||
|
• Net unit transactions |
5,655,315 |
10,566,092 |
2,342,919 |
(1,502,108 |
) |
14,334,819 |
2,701,149 |
1,556,386 |
|||||||||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM UNIT TRANSACTIONS |
5,655,315 |
10,566,092 |
2,342,919 |
(1,502,108 |
) |
14,334,819 |
2,701,149 |
1,556,386 |
|||||||||||||||||||||||
|
TOTAL INCREASE (DECREASE) IN NET ASSETS |
6,751,199 |
13,160,277 |
22,983,103 |
(139,625 |
) |
14,996,908 |
3,286,524 |
9,114,026 |
|||||||||||||||||||||||
|
NET ASSETS AT DECEMBER 31, 2017 |
12,850,270 |
65,217,966 |
74,061,466 |
19,777,266 |
48,447,654 |
54,493,327 |
73,592,347 |
||||||||||||||||||||||||
|
Changes From Operations: |
|||||||||||||||||||||||||||||||
|
• Net investment income (loss) |
(25,063 |
) |
1,777,410 |
2,057,704 |
1,131,348 |
1,140,763 |
857,949 |
214,908 |
|||||||||||||||||||||||
|
• Net realized gain (loss) on investments |
341,057 |
(517,067 |
) |
1,461,520 |
(651,912 |
) |
(120,292 |
) |
904,378 |
6,526,550 |
|||||||||||||||||||||
|
• Net change in unrealized appreciation or depreciation on investments |
(2,716,586 |
) |
(3,085,295 |
) |
(17,466,627 |
) |
(1,420,162 |
) |
(1,148,875 |
) |
(5,762,965 |
) |
(20,346,793 |
) |
|||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS |
(2,400,592 |
) |
(1,824,952 |
) |
(13,947,403 |
) |
(940,726 |
) |
(128,404 |
) |
(4,000,638 |
) |
(13,605,335 |
) |
|||||||||||||||||
|
Change From Unit Transactions: |
|||||||||||||||||||||||||||||||
|
• Net unit transactions |
5,532,731 |
4,610,556 |
18,175,733 |
(2,412,976 |
) |
11,371,318 |
151,863 |
6,341,844 |
|||||||||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM UNIT TRANSACTIONS |
5,532,731 |
4,610,556 |
18,175,733 |
(2,412,976 |
) |
11,371,318 |
151,863 |
6,341,844 |
|||||||||||||||||||||||
|
TOTAL INCREASE (DECREASE) IN NET ASSETS |
3,132,139 |
2,785,604 |
4,228,330 |
(3,353,702 |
) |
11,242,914 |
(3,848,775 |
) |
(7,263,491 |
) |
|||||||||||||||||||||
|
NET ASSETS AT DECEMBER 31, 2018 |
$ |
15,982,409 |
$ |
68,003,570 |
$ |
78,289,796 |
$ |
16,423,564 |
$ |
59,690,568 |
$ |
50,644,552 |
$ |
66,328,856 |
|||||||||||||||||
See accompanying notes.
M-14
|
Delaware VIP® Smid Cap Core Series - Standard Class Subaccount |
Delaware VIP® U.S. Growth Series - Standard Class Subaccount |
Delaware VIP® Value Series - Standard Class Subaccount |
DWS Alternative Asset Allocation VIP Portfolio - Class A Subaccount |
DWS Equity 500 Index VIP Portfolio - Class A Subaccount |
DWS Small Cap Index VIP Portfolio - Class A Subaccount |
||||||||||||||||||||||
|
NET ASSETS AT JANUARY 1, 2017 |
$ |
43,872,895 |
$ |
23,616,731 |
$ |
53,318,964 |
$ |
13,672,891 |
$ |
41,477,903 |
$ |
10,955,142 |
|||||||||||||||
|
Changes From Operations: |
|||||||||||||||||||||||||||
|
• Net investment income (loss) |
(140,782 |
) |
(135,853 |
) |
632,887 |
248,584 |
568,431 |
54,854 |
|||||||||||||||||||
|
• Net realized gain (loss) on investments |
3,741,710 |
65,485 |
3,219,070 |
(52,789 |
) |
3,443,324 |
690,366 |
||||||||||||||||||||
|
• Net change in unrealized appreciation or depreciation on investments |
4,807,100 |
6,569,954 |
3,329,236 |
739,144 |
4,378,850 |
708,789 |
|||||||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS |
8,408,028 |
6,499,586 |
7,181,193 |
934,939 |
8,390,605 |
1,454,009 |
|||||||||||||||||||||
|
Change From Unit Transactions: |
|||||||||||||||||||||||||||
|
• Net unit transactions |
4,409,615 |
(1,113,279 |
) |
1,097,571 |
(135,320 |
) |
(3,226,921 |
) |
(736,029 |
) |
|||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM UNIT TRANSACTIONS |
4,409,615 |
(1,113,279 |
) |
1,097,571 |
(135,320 |
) |
(3,226,921 |
) |
(736,029 |
) |
|||||||||||||||||
|
TOTAL INCREASE (DECREASE) IN NET ASSETS |
12,817,643 |
5,386,307 |
8,278,764 |
799,619 |
5,163,684 |
717,980 |
|||||||||||||||||||||
|
NET ASSETS AT DECEMBER 31, 2017 |
56,690,538 |
29,003,038 |
61,597,728 |
14,472,510 |
46,641,587 |
11,673,122 |
|||||||||||||||||||||
|
Changes From Operations: |
|||||||||||||||||||||||||||
|
• Net investment income (loss) |
(257,678 |
) |
(149,149 |
) |
679,483 |
220,828 |
562,836 |
58,692 |
|||||||||||||||||||
|
• Net realized gain (loss) on investments |
17,619,824 |
3,815,405 |
5,223,362 |
(69,953 |
) |
5,434,081 |
1,027,581 |
||||||||||||||||||||
|
• Net change in unrealized appreciation or depreciation on investments |
(25,438,804 |
) |
(4,566,132 |
) |
(7,916,742 |
) |
(1,609,652 |
) |
(8,008,489 |
) |
(2,354,724 |
) |
|||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS |
(8,076,658 |
) |
(899,876 |
) |
(2,013,897 |
) |
(1,458,777 |
) |
(2,011,572 |
) |
(1,268,451 |
) |
|||||||||||||||
|
Change From Unit Transactions: |
|||||||||||||||||||||||||||
|
• Net unit transactions |
7,274,478 |
(808,564 |
) |
1,611,836 |
814,602 |
(4,604,366 |
) |
(1,111,300 |
) |
||||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM UNIT TRANSACTIONS |
7,274,478 |
(808,564 |
) |
1,611,836 |
814,602 |
(4,604,366 |
) |
(1,111,300 |
) |
||||||||||||||||||
|
TOTAL INCREASE (DECREASE) IN NET ASSETS |
(802,180 |
) |
(1,708,440 |
) |
(402,061 |
) |
(644,175 |
) |
(6,615,938 |
) |
(2,379,751 |
) |
|||||||||||||||
|
NET ASSETS AT DECEMBER 31, 2018 |
$ |
55,888,358 |
$ |
27,294,598 |
$ |
61,195,667 |
$ |
13,828,335 |
$ |
40,025,649 |
$ |
9,293,371 |
|||||||||||||||
M-15
Lincoln Life Flexible Premium Variable Life Account M
Statements of changes in net assets (continued)
Years Ended December 31, 2017 and 2018
|
Fidelity® VIP Asset Manager Portfolio - Initial Class Subaccount |
Fidelity® VIP Contrafund® Portfolio - Service Class Subaccount |
Fidelity® VIP Equity-Income Portfolio - Initial Class Subaccount |
Fidelity® VIP Equity-Income Portfolio - Service Class Subaccount |
Fidelity® VIP Growth Opportunities Portfolio - Service Class Subaccount |
Fidelity® VIP Growth Portfolio - Service Class Subaccount |
Fidelity® VIP High Income Portfolio - Service Class Subaccount |
|||||||||||||||||||||||||
|
NET ASSETS AT JANUARY 1, 2017 |
$ |
576,034 |
$ |
131,831,325 |
$ |
2,049,982 |
$ |
6,203,382 |
$ |
2,686,871 |
$ |
23,916,861 |
$ |
1,611,420 |
|||||||||||||||||
|
Changes From Operations: |
|||||||||||||||||||||||||||||||
|
• Net investment income (loss) |
8,002 |
587,852 |
23,343 |
70,862 |
(7,407 |
) |
(155,766 |
) |
80,137 |
||||||||||||||||||||||
|
• Net realized gain (loss) on investments |
65,938 |
11,376,849 |
74,531 |
162,759 |
520,095 |
2,841,524 |
(1,463 |
) |
|||||||||||||||||||||||
|
• Net change in unrealized appreciation or depreciation on investments |
1,667 |
17,625,917 |
138,824 |
495,266 |
366,783 |
5,724,267 |
26,253 |
||||||||||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS |
75,607 |
29,590,618 |
236,698 |
728,887 |
879,471 |
8,410,025 |
104,927 |
||||||||||||||||||||||||
|
Change From Unit Transactions: |
|||||||||||||||||||||||||||||||
|
• Net unit transactions |
(28,527 |
) |
17,183,024 |
(214,078 |
) |
(564,260 |
) |
(195,421 |
) |
3,713,675 |
1,730 |
||||||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM UNIT TRANSACTIONS |
(28,527 |
) |
17,183,024 |
(214,078 |
) |
(564,260 |
) |
(195,421 |
) |
3,713,675 |
1,730 |
||||||||||||||||||||
|
TOTAL INCREASE (DECREASE) IN NET ASSETS |
47,080 |
46,773,642 |
22,620 |
164,627 |
684,050 |
12,123,700 |
106,657 |
||||||||||||||||||||||||
|
NET ASSETS AT DECEMBER 31, 2017 |
623,114 |
178,604,967 |
2,072,602 |
6,368,009 |
3,370,921 |
36,040,561 |
1,718,077 |
||||||||||||||||||||||||
|
Changes From Operations: |
|||||||||||||||||||||||||||||||
|
• Net investment income (loss) |
6,625 |
83,725 |
31,390 |
101,367 |
(12,143 |
) |
(212,345 |
) |
85,841 |
||||||||||||||||||||||
|
• Net realized gain (loss) on investments |
17,242 |
18,195,453 |
122,405 |
297,605 |
402,292 |
6,488,366 |
(4,555 |
) |
|||||||||||||||||||||||
|
• Net change in unrealized appreciation or depreciation on investments |
(59,604 |
) |
(31,702,946 |
) |
(315,574 |
) |
(926,337 |
) |
3,846 |
(7,195,229 |
) |
(151,687 |
) |
||||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS |
(35,737 |
) |
(13,423,768 |
) |
(161,779 |
) |
(527,365 |
) |
393,995 |
(919,208 |
) |
(70,401 |
) |
||||||||||||||||||
|
Change From Unit Transactions: |
|||||||||||||||||||||||||||||||
|
• Net unit transactions |
(43,603 |
) |
11,895,714 |
(261,237 |
) |
(667,432 |
) |
(284,703 |
) |
6,661,756 |
(6,439 |
) |
|||||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM UNIT TRANSACTIONS |
(43,603 |
) |
11,895,714 |
(261,237 |
) |
(667,432 |
) |
(284,703 |
) |
6,661,756 |
(6,439 |
) |
|||||||||||||||||||
|
TOTAL INCREASE (DECREASE) IN NET ASSETS |
(79,340 |
) |
(1,528,054 |
) |
(423,016 |
) |
(1,194,797 |
) |
109,292 |
5,742,548 |
(76,840 |
) |
|||||||||||||||||||
|
NET ASSETS AT DECEMBER 31, 2018 |
$ |
543,774 |
$ |
177,076,913 |
$ |
1,649,586 |
$ |
5,173,212 |
$ |
3,480,213 |
$ |
41,783,109 |
$ |
1,641,237 |
|||||||||||||||||
See accompanying notes.
M-16
|
Fidelity® VIP Investment Grade Bond Portfolio - Initial Class Subaccount |
Fidelity® VIP Mid Cap Portfolio - Service Class Subaccount |
Fidelity® VIP Overseas Portfolio - Service Class Subaccount |
Franklin Income VIP Fund - Class 1 Subaccount |
Franklin Mutual Shares VIP Fund - Class 1 Subaccount |
Franklin Small-Mid Cap Growth VIP Fund - Class 1 Subaccount |
||||||||||||||||||||||
|
NET ASSETS AT JANUARY 1, 2017 |
$ |
1,047,349 |
$ |
56,446,576 |
$ |
5,709,533 |
$ |
60,965,041 |
$ |
41,017,546 |
$ |
12,249,103 |
|||||||||||||||
|
Changes From Operations: |
|||||||||||||||||||||||||||
|
• Net investment income (loss) |
19,790 |
42,896 |
60,497 |
2,457,348 |
918,086 |
(55,463 |
) |
||||||||||||||||||||
|
• Net realized gain (loss) on investments |
3,798 |
3,537,538 |
174,846 |
232,847 |
2,223,244 |
1,027,290 |
|||||||||||||||||||||
|
• Net change in unrealized appreciation or depreciation on investments |
14,436 |
8,531,177 |
1,416,103 |
3,414,384 |
323,789 |
1,625,320 |
|||||||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS |
38,024 |
12,111,611 |
1,651,446 |
6,104,579 |
3,465,119 |
2,597,147 |
|||||||||||||||||||||
|
Change From Unit Transactions: |
|||||||||||||||||||||||||||
|
• Net unit transactions |
(10,896 |
) |
9,005,279 |
(300,635 |
) |
11,481,027 |
5,336,916 |
(218,071 |
) |
||||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM UNIT TRANSACTIONS |
(10,896 |
) |
9,005,279 |
(300,635 |
) |
11,481,027 |
5,336,916 |
(218,071 |
) |
||||||||||||||||||
|
TOTAL INCREASE (DECREASE) IN NET ASSETS |
27,128 |
21,116,890 |
1,350,811 |
17,585,606 |
8,802,035 |
2,379,076 |
|||||||||||||||||||||
|
NET ASSETS AT DECEMBER 31, 2017 |
1,074,477 |
77,563,466 |
7,060,344 |
78,550,647 |
49,819,581 |
14,628,179 |
|||||||||||||||||||||
|
Changes From Operations: |
|||||||||||||||||||||||||||
|
• Net investment income (loss) |
17,650 |
(25,173 |
) |
72,966 |
3,403,715 |
1,134,509 |
(55,971 |
) |
|||||||||||||||||||
|
• Net realized gain (loss) on investments |
(3,733 |
) |
7,240,569 |
230,196 |
268,947 |
2,183,428 |
1,151,514 |
||||||||||||||||||||
|
• Net change in unrealized appreciation or depreciation on investments |
(27,617 |
) |
(19,824,611 |
) |
(1,326,231 |
) |
(7,571,047 |
) |
(8,158,252 |
) |
(1,785,923 |
) |
|||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS |
(13,700 |
) |
(12,609,215 |
) |
(1,023,069 |
) |
(3,898,385 |
) |
(4,840,315 |
) |
(690,380 |
) |
|||||||||||||||
|
Change From Unit Transactions: |
|||||||||||||||||||||||||||
|
• Net unit transactions |
(151,355 |
) |
6,709,554 |
(243,410 |
) |
3,952,955 |
3,079,576 |
(1,462,403 |
) |
||||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM UNIT TRANSACTIONS |
(151,355 |
) |
6,709,554 |
(243,410 |
) |
3,952,955 |
3,079,576 |
(1,462,403 |
) |
||||||||||||||||||
|
TOTAL INCREASE (DECREASE) IN NET ASSETS |
(165,055 |
) |
(5,899,661 |
) |
(1,266,479 |
) |
54,570 |
(1,760,739 |
) |
(2,152,783 |
) |
||||||||||||||||
|
NET ASSETS AT DECEMBER 31, 2018 |
$ |
909,422 |
$ |
71,663,805 |
$ |
5,793,865 |
$ |
78,605,217 |
$ |
48,058,842 |
$ |
12,475,396 |
|||||||||||||||
M-17
Lincoln Life Flexible Premium Variable Life Account M
Statements of changes in net assets (continued)
Years Ended December 31, 2017 and 2018
|
Invesco V.I. American Franchise Fund - Series I Shares Subaccount |
Invesco V.I. Core Equity Fund - Series I Shares Subaccount |
Invesco V.I. Core Plus Bond Fund - Series I Shares Subaccount |
Invesco V.I. International Growth Fund - Series I Shares Subaccount |
Janus Henderson Balanced Portfolio - Institutional Shares Subaccount |
Janus Henderson Balanced Portfolio - Service Shares Subaccount |
Janus Henderson Enterprise Portfolio - Service Shares Subaccount |
|||||||||||||||||||||||||
|
NET ASSETS AT JANUARY 1, 2017 |
$ |
10,444,955 |
$ |
14,213,747 |
$ |
592,668 |
$ |
16,185,923 |
$ |
8,772,068 |
$ |
7,472,045 |
$ |
3,990,719 |
|||||||||||||||||
|
Changes From Operations: |
|||||||||||||||||||||||||||||||
|
• Net investment income (loss) |
(49,941 |
) |
76,034 |
17,454 |
171,238 |
92,468 |
74,547 |
(14,695 |
) |
||||||||||||||||||||||
|
• Net realized gain (loss) on investments |
1,467,855 |
1,086,039 |
1,586 |
369,658 |
230,410 |
118,854 |
416,871 |
||||||||||||||||||||||||
|
• Net change in unrealized appreciation or depreciation on investments |
1,261,895 |
567,978 |
14,942 |
3,419,017 |
1,137,860 |
1,104,332 |
680,555 |
||||||||||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS |
2,679,809 |
1,730,051 |
33,982 |
3,959,913 |
1,460,738 |
1,297,733 |
1,082,731 |
||||||||||||||||||||||||
|
Change From Unit Transactions: |
|||||||||||||||||||||||||||||||
|
• Net unit transactions |
(1,409,195 |
) |
(1,106,483 |
) |
1,437 |
3,264,008 |
(974,237 |
) |
(93,886 |
) |
203,117 |
||||||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM UNIT TRANSACTIONS |
(1,409,195 |
) |
(1,106,483 |
) |
1,437 |
3,264,008 |
(974,237 |
) |
(93,886 |
) |
203,117 |
||||||||||||||||||||
|
TOTAL INCREASE (DECREASE) IN NET ASSETS |
1,270,614 |
623,568 |
35,419 |
7,223,921 |
486,501 |
1,203,847 |
1,285,848 |
||||||||||||||||||||||||
|
NET ASSETS AT DECEMBER 31, 2017 |
11,715,569 |
14,837,315 |
628,087 |
23,409,844 |
9,258,569 |
8,675,892 |
5,276,567 |
||||||||||||||||||||||||
|
Changes From Operations: |
|||||||||||||||||||||||||||||||
|
• Net investment income (loss) |
(61,392 |
) |
55,505 |
19,031 |
348,903 |
148,045 |
114,287 |
(20,582 |
) |
||||||||||||||||||||||
|
• Net realized gain (loss) on investments |
1,256,213 |
1,251,353 |
(760 |
) |
352,696 |
496,371 |
417,033 |
509,164 |
|||||||||||||||||||||||
|
• Net change in unrealized appreciation or depreciation on investments |
(1,585,004 |
) |
(2,660,595 |
) |
(38,515 |
) |
(4,686,934 |
) |
(607,713 |
) |
(515,925 |
) |
(511,448 |
) |
|||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS |
(390,183 |
) |
(1,353,737 |
) |
(20,244 |
) |
(3,985,335 |
) |
36,703 |
15,395 |
(22,866 |
) |
|||||||||||||||||||
|
Change From Unit Transactions: |
|||||||||||||||||||||||||||||||
|
• Net unit transactions |
(904,798 |
) |
(992,488 |
) |
343,230 |
3,075,578 |
(809,997 |
) |
(661,442 |
) |
(558,494 |
) |
|||||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM UNIT TRANSACTIONS |
(904,798 |
) |
(992,488 |
) |
343,230 |
3,075,578 |
(809,997 |
) |
(661,442 |
) |
(558,494 |
) |
|||||||||||||||||||
|
TOTAL INCREASE (DECREASE) IN NET ASSETS |
(1,294,981 |
) |
(2,346,225 |
) |
322,986 |
(909,757 |
) |
(773,294 |
) |
(646,047 |
) |
(581,360 |
) |
||||||||||||||||||
|
NET ASSETS AT DECEMBER 31, 2018 |
$ |
10,420,588 |
$ |
12,491,090 |
$ |
951,073 |
$ |
22,500,087 |
$ |
8,485,275 |
$ |
8,029,845 |
$ |
4,695,207 |
|||||||||||||||||
See accompanying notes.
M-18
|
Janus Henderson Global Research Portfolio - Institutional Shares Subaccount |
Janus Henderson Global Research Portfolio - Service Shares Subaccount |
Janus Henderson Global Technology Portfolio - Service Shares Subaccount |
JPMorgan Insurance Trust Global Allocation Portfolio - Class 1 Subaccount |
LVIP Baron Growth Opportunities Fund - Service Class Subaccount |
LVIP Baron Growth Opportunities Fund - Standard Class Subaccount |
||||||||||||||||||||||
|
NET ASSETS AT JANUARY 1, 2017 |
$ |
8,155,378 |
$ |
1,953,244 |
$ |
1,537,667 |
$ |
3,876,049 |
$ |
25,522,295 |
$ |
1,142,148 |
|||||||||||||||
|
Changes From Operations: |
|||||||||||||||||||||||||||
|
• Net investment income (loss) |
29,837 |
3,407 |
(11,464 |
) |
55,666 |
(168,650 |
) |
(5,842 |
) |
||||||||||||||||||
|
• Net realized gain (loss) on investments |
429,784 |
110,897 |
226,704 |
255,031 |
1,961,144 |
85,470 |
|||||||||||||||||||||
|
• Net change in unrealized appreciation or depreciation on investments |
1,599,486 |
351,085 |
553,413 |
428,464 |
5,026,739 |
218,082 |
|||||||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS |
2,059,107 |
465,389 |
768,653 |
739,161 |
6,819,233 |
297,710 |
|||||||||||||||||||||
|
Change From Unit Transactions: |
|||||||||||||||||||||||||||
|
• Net unit transactions |
(961,710 |
) |
(329,461 |
) |
316,447 |
2,042,604 |
1,388,739 |
(172,866 |
) |
||||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM UNIT TRANSACTIONS |
(961,710 |
) |
(329,461 |
) |
316,447 |
2,042,604 |
1,388,739 |
(172,866 |
) |
||||||||||||||||||
|
TOTAL INCREASE (DECREASE) IN NET ASSETS |
1,097,397 |
135,928 |
1,085,100 |
2,781,765 |
8,207,972 |
124,844 |
|||||||||||||||||||||
|
NET ASSETS AT DECEMBER 31, 2017 |
9,252,775 |
2,089,172 |
2,622,767 |
6,657,814 |
33,730,267 |
1,266,992 |
|||||||||||||||||||||
|
Changes From Operations: |
|||||||||||||||||||||||||||
|
• Net investment income (loss) |
57,193 |
9,760 |
(15,070 |
) |
(115,595 |
) |
(210,859 |
) |
(5,659 |
) |
|||||||||||||||||
|
• Net realized gain (loss) on investments |
477,637 |
103,171 |
251,804 |
100,712 |
2,900,980 |
108,200 |
|||||||||||||||||||||
|
• Net change in unrealized appreciation or depreciation on investments |
(1,135,935 |
) |
(257,889 |
) |
(227,405 |
) |
(1,419,626 |
) |
(4,360,682 |
) |
(167,187 |
) |
|||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS |
(601,105 |
) |
(144,958 |
) |
9,329 |
(1,434,509 |
) |
(1,670,561 |
) |
(64,646 |
) |
||||||||||||||||
|
Change From Unit Transactions: |
|||||||||||||||||||||||||||
|
• Net unit transactions |
(816,147 |
) |
(154,777 |
) |
13,547 |
13,849,991 |
2,816,278 |
(1,584 |
) |
||||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM UNIT TRANSACTIONS |
(816,147 |
) |
(154,777 |
) |
13,547 |
13,849,991 |
2,816,278 |
(1,584 |
) |
||||||||||||||||||
|
TOTAL INCREASE (DECREASE) IN NET ASSETS |
(1,417,252 |
) |
(299,735 |
) |
22,876 |
12,415,482 |
1,145,717 |
(66,230 |
) |
||||||||||||||||||
|
NET ASSETS AT DECEMBER 31, 2018 |
$ |
7,835,523 |
$ |
1,789,437 |
$ |
2,645,643 |
$ |
19,073,296 |
$ |
34,875,984 |
$ |
1,200,762 |
|||||||||||||||
M-19
Lincoln Life Flexible Premium Variable Life Account M
Statements of changes in net assets (continued)
Years Ended December 31, 2017 and 2018
|
LVIP BlackRock Dividend Value Managed Volatility Fund - Standard Class Subaccount |
LVIP BlackRock Global Growth ETF Allocation Managed Risk Fund - Standard Class Subaccount |
LVIP BlackRock Inflation Protected Bond Fund - Standard Class Subaccount |
LVIP BlackRock U.S. Growth ETF Allocation Managed Risk Fund - Standard Class Subaccount |
LVIP Blended Large Cap Growth Managed Volatility Fund - Standard Class Subaccount |
LVIP Blended Mid Cap Managed Volatility Fund - Standard Class Subaccount |
LVIP Clarion Global Real Estate Fund - Standard Class Subaccount |
|||||||||||||||||||||||||
|
NET ASSETS AT JANUARY 1, 2017 |
$ |
39,620,282 |
$ |
1,318,727 |
$ |
19,654,849 |
$ |
612,825 |
$ |
7,253,704 |
$ |
7,047,390 |
$ |
18,644,346 |
|||||||||||||||||
|
Changes From Operations: |
|||||||||||||||||||||||||||||||
|
• Net investment income (loss) |
442,504 |
82,451 |
264,520 |
18,632 |
9,498 |
(49,918 |
) |
828,334 |
|||||||||||||||||||||||
|
• Net realized gain (loss) on investments |
641,703 |
12,316 |
(42,758 |
) |
3,557 |
650,519 |
102,400 |
310,593 |
|||||||||||||||||||||||
|
• Net change in unrealized appreciation or depreciation on investments |
4,608,711 |
303,339 |
153,516 |
164,676 |
1,123,717 |
1,657,916 |
890,524 |
||||||||||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS |
5,692,918 |
398,106 |
375,278 |
186,865 |
1,783,734 |
1,710,398 |
2,029,451 |
||||||||||||||||||||||||
|
Change From Unit Transactions: |
|||||||||||||||||||||||||||||||
|
• Net unit transactions |
(3,662,667 |
) |
6,203,956 |
7,255,081 |
1,757,436 |
(573,089 |
) |
(361,785 |
) |
2,399,245 |
|||||||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM UNIT TRANSACTIONS |
(3,662,667 |
) |
6,203,956 |
7,255,081 |
1,757,436 |
(573,089 |
) |
(361,785 |
) |
2,399,245 |
|||||||||||||||||||||
|
TOTAL INCREASE (DECREASE) IN NET ASSETS |
2,030,251 |
6,602,062 |
7,630,359 |
1,944,301 |
1,210,645 |
1,348,613 |
4,428,696 |
||||||||||||||||||||||||
|
NET ASSETS AT DECEMBER 31, 2017 |
41,650,533 |
7,920,789 |
27,285,208 |
2,557,126 |
8,464,349 |
8,396,003 |
23,073,042 |
||||||||||||||||||||||||
|
Changes From Operations: |
|||||||||||||||||||||||||||||||
|
• Net investment income (loss) |
613,764 |
193,363 |
1,429,570 |
34,579 |
18,055 |
(53,330 |
) |
781,496 |
|||||||||||||||||||||||
|
• Net realized gain (loss) on investments |
602,730 |
48,301 |
(101,042 |
) |
19,226 |
1,156,729 |
329,993 |
319,164 |
|||||||||||||||||||||||
|
• Net change in unrealized appreciation or depreciation on investments |
(4,721,987 |
) |
(971,519 |
) |
(1,436,362 |
) |
(200,037 |
) |
(1,557,815 |
) |
(268,143 |
) |
(3,228,052 |
) |
|||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS |
(3,505,493 |
) |
(729,855 |
) |
(107,834 |
) |
(146,232 |
) |
(383,031 |
) |
8,520 |
(2,127,392 |
) |
||||||||||||||||||
|
Change From Unit Transactions: |
|||||||||||||||||||||||||||||||
|
• Net unit transactions |
(764,168 |
) |
9,875,864 |
4,184,913 |
1,841,484 |
(158,708 |
) |
(290,252 |
) |
1,595,408 |
|||||||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM UNIT TRANSACTIONS |
(764,168 |
) |
9,875,864 |
4,184,913 |
1,841,484 |
(158,708 |
) |
(290,252 |
) |
1,595,408 |
|||||||||||||||||||||
|
TOTAL INCREASE (DECREASE) IN NET ASSETS |
(4,269,661 |
) |
9,146,009 |
4,077,079 |
1,695,252 |
(541,739 |
) |
(281,732 |
) |
(531,984 |
) |
||||||||||||||||||||
|
NET ASSETS AT DECEMBER 31, 2018 |
$ |
37,380,872 |
$ |
17,066,798 |
$ |
31,362,287 |
$ |
4,252,378 |
$ |
7,922,610 |
$ |
8,114,271 |
$ |
22,541,058 |
|||||||||||||||||
See accompanying notes.
M-20
|
LVIP ClearBridge Large Cap Managed Volatility Fund - Standard Class Subaccount |
LVIP Delaware Bond Fund - Standard Class Subaccount |
LVIP Delaware Diversified Floating Rate Fund - Standard Class Subaccount |
LVIP Delaware Social Awareness Fund - Standard Class Subaccount |
LVIP Delaware Special Opportunities Fund - Standard Class Subaccount |
LVIP Delaware Wealth Builder Fund - Standard Class Subaccount |
||||||||||||||||||||||
|
NET ASSETS AT JANUARY 1, 2017 |
$ |
822,256 |
$ |
123,172,536 |
$ |
15,973,683 |
$ |
6,522,336 |
$ |
10,086,430 |
$ |
3,001,439 |
|||||||||||||||
|
Changes From Operations: |
|||||||||||||||||||||||||||
|
• Net investment income (loss) |
2,880 |
3,316,949 |
107,121 |
52,726 |
97,098 |
55,162 |
|||||||||||||||||||||
|
• Net realized gain (loss) on investments |
33,730 |
(88,202 |
) |
12,416 |
667,851 |
1,122,798 |
212,119 |
||||||||||||||||||||
|
• Net change in unrealized appreciation or depreciation on investments |
122,435 |
1,685,779 |
250,383 |
468,569 |
632,169 |
77,953 |
|||||||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS |
159,045 |
4,914,526 |
369,920 |
1,189,146 |
1,852,065 |
345,234 |
|||||||||||||||||||||
|
Change From Unit Transactions: |
|||||||||||||||||||||||||||
|
• Net unit transactions |
167,035 |
15,060,915 |
5,951,466 |
(779,937 |
) |
1,259,030 |
(290,823 |
) |
|||||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM UNIT TRANSACTIONS |
167,035 |
15,060,915 |
5,951,466 |
(779,937 |
) |
1,259,030 |
(290,823 |
) |
|||||||||||||||||||
|
TOTAL INCREASE (DECREASE) IN NET ASSETS |
326,080 |
19,975,441 |
6,321,386 |
409,209 |
3,111,095 |
54,411 |
|||||||||||||||||||||
|
NET ASSETS AT DECEMBER 31, 2017 |
1,148,336 |
143,147,977 |
22,295,069 |
6,931,545 |
13,197,525 |
3,055,850 |
|||||||||||||||||||||
|
Changes From Operations: |
|||||||||||||||||||||||||||
|
• Net investment income (loss) |
2,674 |
4,175,691 |
802,075 |
65,560 |
119,670 |
71,770 |
|||||||||||||||||||||
|
• Net realized gain (loss) on investments |
41,620 |
(570,683 |
) |
16,063 |
750,986 |
1,364,297 |
504,971 |
||||||||||||||||||||
|
• Net change in unrealized appreciation or depreciation on investments |
(113,602 |
) |
(5,564,447 |
) |
(926,883 |
) |
(1,187,312 |
) |
(3,746,876 |
) |
(732,452 |
) |
|||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS |
(69,308 |
) |
(1,959,439 |
) |
(108,745 |
) |
(370,766 |
) |
(2,262,909 |
) |
(155,711 |
) |
|||||||||||||||
|
Change From Unit Transactions: |
|||||||||||||||||||||||||||
|
• Net unit transactions |
(31,288 |
) |
12,098,181 |
3,152,502 |
284,939 |
1,976,039 |
(334,370 |
) |
|||||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM UNIT TRANSACTIONS |
(31,288 |
) |
12,098,181 |
3,152,502 |
284,939 |
1,976,039 |
(334,370 |
) |
|||||||||||||||||||
|
TOTAL INCREASE (DECREASE) IN NET ASSETS |
(100,596 |
) |
10,138,742 |
3,043,757 |
(85,827 |
) |
(286,870 |
) |
(490,081 |
) |
|||||||||||||||||
|
NET ASSETS AT DECEMBER 31, 2018 |
$ |
1,047,740 |
$ |
153,286,719 |
$ |
25,338,826 |
$ |
6,845,718 |
$ |
12,910,655 |
$ |
2,565,769 |
|||||||||||||||
M-21
Lincoln Life Flexible Premium Variable Life Account M
Statements of changes in net assets (continued)
Years Ended December 31, 2017 and 2018
|
LVIP Dimensional International Core Equity Fund - Standard Class Subaccount |
LVIP Dimensional International Equity Managed Volatility Fund - Standard Class Subaccount |
LVIP Dimensional U.S. Core Equity 1 Fund - Standard Class Subaccount |
LVIP Dimensional U.S. Core Equity 2 Fund - Standard Class Subaccount |
LVIP Dimensional U.S. Equity Managed Volatility Fund - Standard Class Subaccount |
LVIP Dimensional/ Vanguard Total Bond Fund - Standard Class Subaccount |
LVIP Franklin Templeton Global Equity Managed Volatility Fund - Standard Class Subaccount |
|||||||||||||||||||||||||
|
NET ASSETS AT JANUARY 1, 2017 |
$ |
4,320,917 |
$ |
10,120,850 |
$ |
9,076,712 |
$ |
6,781,380 |
$ |
11,912,273 |
$ |
43,397,818 |
$ |
6,933,617 |
|||||||||||||||||
|
Changes From Operations: |
|||||||||||||||||||||||||||||||
|
• Net investment income (loss) |
140,833 |
189,240 |
130,288 |
78,225 |
79,286 |
731,943 |
65,287 |
||||||||||||||||||||||||
|
• Net realized gain (loss) on investments |
64,366 |
72,755 |
164,320 |
90,076 |
108,722 |
(3,780 |
) |
106,948 |
|||||||||||||||||||||||
|
• Net change in unrealized appreciation or depreciation on investments |
1,338,803 |
2,296,785 |
1,901,173 |
1,556,172 |
2,050,533 |
316,387 |
1,251,151 |
||||||||||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS |
1,544,002 |
2,558,780 |
2,195,781 |
1,724,473 |
2,238,541 |
1,044,550 |
1,423,386 |
||||||||||||||||||||||||
|
Change From Unit Transactions: |
|||||||||||||||||||||||||||||||
|
• Net unit transactions |
5,941,621 |
(551,652 |
) |
3,747,470 |
6,850,182 |
(27,756 |
) |
13,121,900 |
(200,060 |
) |
|||||||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM UNIT TRANSACTIONS |
5,941,621 |
(551,652 |
) |
3,747,470 |
6,850,182 |
(27,756 |
) |
13,121,900 |
(200,060 |
) |
|||||||||||||||||||||
|
TOTAL INCREASE (DECREASE) IN NET ASSETS |
7,485,623 |
2,007,128 |
5,943,251 |
8,574,655 |
2,210,785 |
14,166,450 |
1,223,326 |
||||||||||||||||||||||||
|
NET ASSETS AT DECEMBER 31, 2017 |
11,806,540 |
12,127,978 |
15,019,963 |
15,356,035 |
14,123,058 |
57,564,268 |
8,156,943 |
||||||||||||||||||||||||
|
Changes From Operations: |
|||||||||||||||||||||||||||||||
|
• Net investment income (loss) |
230,437 |
162,878 |
207,522 |
106,448 |
56,180 |
1,103,405 |
73,994 |
||||||||||||||||||||||||
|
• Net realized gain (loss) on investments |
4,729 |
62,870 |
676,059 |
201,195 |
338,331 |
(90,169 |
) |
186,895 |
|||||||||||||||||||||||
|
• Net change in unrealized appreciation or depreciation on investments |
(3,647,541 |
) |
(2,324,986 |
) |
(2,764,110 |
) |
(2,743,223 |
) |
(1,399,809 |
) |
(1,362,849 |
) |
(1,046,427 |
) |
|||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS |
(3,412,375 |
) |
(2,099,238 |
) |
(1,880,529 |
) |
(2,435,580 |
) |
(1,005,298 |
) |
(349,613 |
) |
(785,538 |
) |
|||||||||||||||||
|
Change From Unit Transactions: |
|||||||||||||||||||||||||||||||
|
• Net unit transactions |
8,929,679 |
960,272 |
5,950,926 |
9,692,529 |
(1,145,520 |
) |
14,254,275 |
77,075 |
|||||||||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM UNIT TRANSACTIONS |
8,929,679 |
960,272 |
5,950,926 |
9,692,529 |
(1,145,520 |
) |
14,254,275 |
77,075 |
|||||||||||||||||||||||
|
TOTAL INCREASE (DECREASE) IN NET ASSETS |
5,517,304 |
(1,138,966 |
) |
4,070,397 |
7,256,949 |
(2,150,818 |
) |
13,904,662 |
(708,463 |
) |
|||||||||||||||||||||
|
NET ASSETS AT DECEMBER 31, 2018 |
$ |
17,323,844 |
$ |
10,989,012 |
$ |
19,090,360 |
$ |
22,612,984 |
$ |
11,972,240 |
$ |
71,468,930 |
$ |
7,448,480 |
|||||||||||||||||
See accompanying notes.
M-22
|
LVIP Global Conservative Allocation Managed Risk Fund - Standard Class Subaccount |
LVIP Global Growth Allocation Managed Risk Fund - Standard Class Subaccount |
LVIP Global Income Fund - Standard Class Subaccount |
LVIP Global Moderate Allocation Managed Risk Fund - Standard Class Subaccount |
LVIP Government Money Market Fund - Standard Class Subaccount |
LVIP Invesco Diversified Equity-Income Managed Volatility Fund - Standard Class Subaccount |
||||||||||||||||||||||
|
NET ASSETS AT JANUARY 1, 2017 |
$ |
32,878,208 |
$ |
103,606,539 |
$ |
10,048,437 |
$ |
93,881,212 |
$ |
93,224,650 |
$ |
1,471,551 |
|||||||||||||||
|
Changes From Operations: |
|||||||||||||||||||||||||||
|
• Net investment income (loss) |
679,295 |
2,118,631 |
(58,793 |
) |
1,780,372 |
(132,853 |
) |
9,586 |
|||||||||||||||||||
|
• Net realized gain (loss) on investments |
438,979 |
2,407,186 |
50,967 |
2,011,361 |
2,318 |
38,858 |
|||||||||||||||||||||
|
• Net change in unrealized appreciation or depreciation on investments |
2,182,719 |
11,055,588 |
484,299 |
9,081,054 |
— |
100,144 |
|||||||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS |
3,300,993 |
15,581,405 |
476,473 |
12,872,787 |
(130,535 |
) |
148,588 |
||||||||||||||||||||
|
Change From Unit Transactions: |
|||||||||||||||||||||||||||
|
• Net unit transactions |
3,819,170 |
2,757,214 |
2,098,079 |
5,662 |
8,765,763 |
23,507 |
|||||||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM UNIT TRANSACTIONS |
3,819,170 |
2,757,214 |
2,098,079 |
5,662 |
8,765,763 |
23,507 |
|||||||||||||||||||||
|
TOTAL INCREASE (DECREASE) IN NET ASSETS |
7,120,163 |
18,338,619 |
2,574,552 |
12,878,449 |
8,635,228 |
172,095 |
|||||||||||||||||||||
|
NET ASSETS AT DECEMBER 31, 2017 |
39,998,371 |
121,945,158 |
12,622,989 |
106,759,661 |
101,859,878 |
1,643,646 |
|||||||||||||||||||||
|
Changes From Operations: |
|||||||||||||||||||||||||||
|
• Net investment income (loss) |
889,643 |
2,391,827 |
460,351 |
1,946,663 |
671,618 |
18,616 |
|||||||||||||||||||||
|
• Net realized gain (loss) on investments |
770,111 |
2,315,188 |
15,772 |
3,296,859 |
16 |
61,658 |
|||||||||||||||||||||
|
• Net change in unrealized appreciation or depreciation on investments |
(3,815,377 |
) |
(13,179,042 |
) |
(303,448 |
) |
(11,174,877 |
) |
2 |
(242,441 |
) |
||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS |
(2,155,623 |
) |
(8,472,027 |
) |
172,675 |
(5,931,355 |
) |
671,636 |
(162,167 |
) |
|||||||||||||||||
|
Change From Unit Transactions: |
|||||||||||||||||||||||||||
|
• Net unit transactions |
4,276,737 |
2,267,869 |
222,996 |
(5,040,806 |
) |
11,691,571 |
101,616 |
||||||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM UNIT TRANSACTIONS |
4,276,737 |
2,267,869 |
222,996 |
(5,040,806 |
) |
11,691,571 |
101,616 |
||||||||||||||||||||
|
TOTAL INCREASE (DECREASE) IN NET ASSETS |
2,121,114 |
(6,204,158 |
) |
395,671 |
(10,972,161 |
) |
12,363,207 |
(60,551 |
) |
||||||||||||||||||
|
NET ASSETS AT DECEMBER 31, 2018 |
$ |
42,119,485 |
$ |
115,741,000 |
$ |
13,018,660 |
$ |
95,787,500 |
$ |
114,223,085 |
$ |
1,583,095 |
|||||||||||||||
M-23
Lincoln Life Flexible Premium Variable Life Account M
Statements of changes in net assets (continued)
Years Ended December 31, 2017 and 2018
|
LVIP JPMorgan High Yield Fund - Standard Class Subaccount |
LVIP JPMorgan Select Mid Cap Value Managed VolatilityFund - Standard Class Subaccount |
LVIP MFS International Growth Fund - Standard Class Subaccount |
LVIP MFS Value Fund - Standard Class Subaccount |
LVIP Mondrian International Value Fund - Standard Class Subaccount |
LVIP Multi-Manager Global Equity Managed Volatility Fund - Standard Class Subaccount |
LVIP SSGA Bond Index Fund - Standard Class Subaccount |
|||||||||||||||||||||||||
|
NET ASSETS AT JANUARY 1, 2017 |
$ |
35,978,118 |
$ |
12,985,982 |
$ |
22,859,412 |
$ |
68,828,939 |
$ |
31,157,739 |
$ |
325,507 |
$ |
25,939,724 |
|||||||||||||||||
|
Changes From Operations: |
|||||||||||||||||||||||||||||||
|
• Net investment income (loss) |
2,355,677 |
58,859 |
182,215 |
1,116,864 |
1,025,315 |
4,151 |
625,443 |
||||||||||||||||||||||||
|
• Net realized gain (loss) on investments |
20,739 |
216,183 |
503,490 |
2,573,415 |
265,078 |
7,022 |
(16,146 |
) |
|||||||||||||||||||||||
|
• Net change in unrealized appreciation or depreciation on investments |
(66,102 |
) |
1,567,686 |
6,826,915 |
9,163,146 |
5,328,631 |
55,019 |
85,521 |
|||||||||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS |
2,310,314 |
1,842,728 |
7,512,620 |
12,853,425 |
6,619,024 |
66,192 |
694,818 |
||||||||||||||||||||||||
|
Change From Unit Transactions: |
|||||||||||||||||||||||||||||||
|
• Net unit transactions |
6,482,933 |
22,541 |
2,693,314 |
15,687,507 |
973,798 |
57,916 |
9,314,445 |
||||||||||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM UNIT TRANSACTIONS |
6,482,933 |
22,541 |
2,693,314 |
15,687,507 |
973,798 |
57,916 |
9,314,445 |
||||||||||||||||||||||||
|
TOTAL INCREASE (DECREASE) IN NET ASSETS |
8,793,247 |
1,865,269 |
10,205,934 |
28,540,932 |
7,592,822 |
124,108 |
10,009,263 |
||||||||||||||||||||||||
|
NET ASSETS AT DECEMBER 31, 2017 |
44,771,365 |
14,851,251 |
33,065,346 |
97,369,871 |
38,750,561 |
449,615 |
35,948,987 |
||||||||||||||||||||||||
|
Changes From Operations: |
|||||||||||||||||||||||||||||||
|
• Net investment income (loss) |
2,542,434 |
113,100 |
285,742 |
1,262,066 |
1,062,702 |
60 |
1,062,894 |
||||||||||||||||||||||||
|
• Net realized gain (loss) on investments |
(261,360 |
) |
223,018 |
1,390,844 |
5,084,686 |
666,706 |
57,278 |
(147,756 |
) |
||||||||||||||||||||||
|
• Net change in unrealized appreciation or depreciation on investments |
(4,008,286 |
) |
(2,165,049 |
) |
(5,013,321 |
) |
(17,464,382 |
) |
(6,558,947 |
) |
(77,225 |
) |
(1,137,567 |
) |
|||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS |
(1,727,212 |
) |
(1,828,931 |
) |
(3,336,735 |
) |
(11,117,630 |
) |
(4,829,539 |
) |
(19,887 |
) |
(222,429 |
) |
|||||||||||||||||
|
Change From Unit Transactions: |
|||||||||||||||||||||||||||||||
|
• Net unit transactions |
4,081,304 |
158,014 |
5,953,508 |
10,772,204 |
2,224,393 |
(171,685 |
) |
13,914,971 |
|||||||||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM UNIT TRANSACTIONS |
4,081,304 |
158,014 |
5,953,508 |
10,772,204 |
2,224,393 |
(171,685 |
) |
13,914,971 |
|||||||||||||||||||||||
|
TOTAL INCREASE (DECREASE) IN NET ASSETS |
2,354,092 |
(1,670,917 |
) |
2,616,773 |
(345,426 |
) |
(2,605,146 |
) |
(191,572 |
) |
13,692,542 |
||||||||||||||||||||
|
NET ASSETS AT DECEMBER 31, 2018 |
$ |
47,125,457 |
$ |
13,180,334 |
$ |
35,682,119 |
$ |
97,024,445 |
$ |
36,145,415 |
$ |
258,043 |
$ |
49,641,529 |
|||||||||||||||||
See accompanying notes.
M-24
|
LVIP SSGA Conservative Index Allocation Fund - Standard Class Subaccount |
LVIP SSGA Conservative Structured Allocation Fund - Standard Class Subaccount |
LVIP SSGA Developed International 150 Fund - Standard Class Subaccount |
LVIP SSGA Emerging Markets 100 Fund - Standard Class Subaccount |
LVIP SSGA Global Tactical Allocation Managed Volatility Fund - Standard Class Subaccount |
LVIP SSGA International Index Fund - Standard Class Subaccount |
||||||||||||||||||||||
|
NET ASSETS AT JANUARY 1, 2017 |
$ |
13,074,821 |
$ |
9,716,216 |
$ |
12,110,200 |
$ |
20,166,518 |
$ |
21,365,684 |
$ |
25,160,758 |
|||||||||||||||
|
Changes From Operations: |
|||||||||||||||||||||||||||
|
• Net investment income (loss) |
282,757 |
334,731 |
641,842 |
632,121 |
794,812 |
698,265 |
|||||||||||||||||||||
|
• Net realized gain (loss) on investments |
98,126 |
142,070 |
53,945 |
113,702 |
231,739 |
168,334 |
|||||||||||||||||||||
|
• Net change in unrealized appreciation or depreciation on investments |
1,106,128 |
446,577 |
2,481,812 |
4,350,385 |
1,966,446 |
5,658,198 |
|||||||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS |
1,487,011 |
923,378 |
3,177,599 |
5,096,208 |
2,992,997 |
6,524,797 |
|||||||||||||||||||||
|
Change From Unit Transactions: |
|||||||||||||||||||||||||||
|
• Net unit transactions |
4,613,557 |
1,692,773 |
3,988,469 |
5,850,366 |
(721,991 |
) |
5,941,719 |
||||||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM UNIT TRANSACTIONS |
4,613,557 |
1,692,773 |
3,988,469 |
5,850,366 |
(721,991 |
) |
5,941,719 |
||||||||||||||||||||
|
TOTAL INCREASE (DECREASE) IN NET ASSETS |
6,100,568 |
2,616,151 |
7,166,068 |
10,946,574 |
2,271,006 |
12,466,516 |
|||||||||||||||||||||
|
NET ASSETS AT DECEMBER 31, 2017 |
19,175,389 |
12,332,367 |
19,276,268 |
31,113,092 |
23,636,690 |
37,627,274 |
|||||||||||||||||||||
|
Changes From Operations: |
|||||||||||||||||||||||||||
|
• Net investment income (loss) |
347,354 |
288,502 |
776,768 |
1,666,706 |
555,284 |
961,722 |
|||||||||||||||||||||
|
• Net realized gain (loss) on investments |
156,286 |
130,947 |
646,935 |
23,017 |
210,177 |
149,894 |
|||||||||||||||||||||
|
• Net change in unrealized appreciation or depreciation on investments |
(1,566,983 |
) |
(1,139,861 |
) |
(5,697,506 |
) |
(6,931,970 |
) |
(2,812,589 |
) |
(8,010,764 |
) |
|||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS |
(1,063,343 |
) |
(720,412 |
) |
(4,273,803 |
) |
(5,242,247 |
) |
(2,047,128 |
) |
(6,899,148 |
) |
|||||||||||||||
|
Change From Unit Transactions: |
|||||||||||||||||||||||||||
|
• Net unit transactions |
2,291,768 |
530,559 |
9,808,804 |
13,714,019 |
(22,440 |
) |
13,383,678 |
||||||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM UNIT TRANSACTIONS |
2,291,768 |
530,559 |
9,808,804 |
13,714,019 |
(22,440 |
) |
13,383,678 |
||||||||||||||||||||
|
TOTAL INCREASE (DECREASE) IN NET ASSETS |
1,228,425 |
(189,853 |
) |
5,535,001 |
8,471,772 |
(2,069,568 |
) |
6,484,530 |
|||||||||||||||||||
|
NET ASSETS AT DECEMBER 31, 2018 |
$ |
20,403,814 |
$ |
12,142,514 |
$ |
24,811,269 |
$ |
39,584,864 |
$ |
21,567,122 |
$ |
44,111,804 |
|||||||||||||||
M-25
Lincoln Life Flexible Premium Variable Life Account M
Statements of changes in net assets (continued)
Years Ended December 31, 2017 and 2018
|
LVIP SSGA International Managed Volatility Fund - Standard Class Subaccount |
LVIP SSGA Large Cap 100 Fund - Standard Class Subaccount |
LVIP SSGA Moderate Index Allocation Fund - Standard Class Subaccount |
LVIP SSGA Moderate Structured Allocation Fund - Standard Class Subaccount |
LVIP SSGA Moderately Aggressive Index Allocation Fund - Standard Class Subaccount |
LVIP SSGA Moderately Aggressive Structured Allocation Fund - Standard Class Subaccount |
LVIP SSGA S&P 500 Index Fund - Standard Class Subaccount |
|||||||||||||||||||||||||
|
NET ASSETS AT JANUARY 1, 2017 |
$ |
8,797,185 |
$ |
19,319,987 |
$ |
50,711,847 |
$ |
47,076,770 |
$ |
65,233,456 |
$ |
39,006,718 |
$ |
217,044,152 |
|||||||||||||||||
|
Changes From Operations: |
|||||||||||||||||||||||||||||||
|
• Net investment income (loss) |
156,687 |
613,586 |
1,080,225 |
1,982,040 |
1,370,745 |
1,828,431 |
4,006,109 |
||||||||||||||||||||||||
|
• Net realized gain (loss) on investments |
79,782 |
3,586,188 |
591,518 |
1,054,548 |
656,578 |
919,125 |
6,755,975 |
||||||||||||||||||||||||
|
• Net change in unrealized appreciation or depreciation on investments |
1,805,236 |
(174,278 |
) |
6,296,461 |
3,403,936 |
10,028,263 |
3,176,442 |
42,017,917 |
|||||||||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS |
2,041,705 |
4,025,496 |
7,968,204 |
6,440,524 |
12,055,586 |
5,923,998 |
52,780,001 |
||||||||||||||||||||||||
|
Change From Unit Transactions: |
|||||||||||||||||||||||||||||||
|
• Net unit transactions |
(264,186 |
) |
5,370,297 |
16,209,583 |
9,792,959 |
20,475,111 |
8,937,094 |
76,611,354 |
|||||||||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM UNIT TRANSACTIONS |
(264,186 |
) |
5,370,297 |
16,209,583 |
9,792,959 |
20,475,111 |
8,937,094 |
76,611,354 |
|||||||||||||||||||||||
|
TOTAL INCREASE (DECREASE) IN NET ASSETS |
1,777,519 |
9,395,793 |
24,177,787 |
16,233,483 |
32,530,697 |
14,861,092 |
129,391,355 |
||||||||||||||||||||||||
|
NET ASSETS AT DECEMBER 31, 2017 |
10,574,704 |
28,715,780 |
74,889,634 |
63,310,253 |
97,764,153 |
53,867,810 |
346,435,507 |
||||||||||||||||||||||||
|
Changes From Operations: |
|||||||||||||||||||||||||||||||
|
• Net investment income (loss) |
171,833 |
552,612 |
1,383,473 |
1,595,670 |
1,579,784 |
1,584,053 |
5,253,775 |
||||||||||||||||||||||||
|
• Net realized gain (loss) on investments |
56,336 |
1,841,947 |
653,897 |
1,074,136 |
1,138,781 |
559,340 |
13,385,211 |
||||||||||||||||||||||||
|
• Net change in unrealized appreciation or depreciation on investments |
(1,615,988 |
) |
(6,463,343 |
) |
(8,228,274 |
) |
(7,880,325 |
) |
(11,558,807 |
) |
(7,477,667 |
) |
(44,634,350 |
) |
|||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS |
(1,387,819 |
) |
(4,068,784 |
) |
(6,190,904 |
) |
(5,210,519 |
) |
(8,840,242 |
) |
(5,334,274 |
) |
(25,995,364 |
) |
|||||||||||||||||
|
Change From Unit Transactions: |
|||||||||||||||||||||||||||||||
|
• Net unit transactions |
415,191 |
6,721,583 |
16,121,776 |
4,540,832 |
14,944,923 |
7,646,066 |
110,767,706 |
||||||||||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM UNIT TRANSACTIONS |
415,191 |
6,721,583 |
16,121,776 |
4,540,832 |
14,944,923 |
7,646,066 |
110,767,706 |
||||||||||||||||||||||||
|
TOTAL INCREASE (DECREASE) IN NET ASSETS |
(972,628 |
) |
2,652,799 |
9,930,872 |
(669,687 |
) |
6,104,681 |
2,311,792 |
84,772,342 |
||||||||||||||||||||||
|
NET ASSETS AT DECEMBER 31, 2018 |
$ |
9,602,076 |
$ |
31,368,579 |
$ |
84,820,506 |
$ |
62,640,566 |
$ |
103,868,834 |
$ |
56,179,602 |
$ |
431,207,849 |
|||||||||||||||||
See accompanying notes.
M-26
|
LVIP SSGA Small-Cap Index Fund - Standard Class Subaccount |
LVIP SSGA Small-Mid Cap 200 Fund - Standard Class Subaccount |
LVIP T. Rowe Price 2010 Fund - Standard Class Subaccount |
LVIP T. Rowe Price 2020 Fund - Standard Class Subaccount |
LVIP T. Rowe Price 2030 Fund - Standard Class Subaccount |
LVIP T. Rowe Price 2040 Fund - Standard Class Subaccount |
||||||||||||||||||||||
|
NET ASSETS AT JANUARY 1, 2017 |
$ |
34,206,627 |
$ |
24,540,696 |
$ |
295,330 |
$ |
941,136 |
$ |
2,555,494 |
$ |
3,529,632 |
|||||||||||||||
|
Changes From Operations: |
|||||||||||||||||||||||||||
|
• Net investment income (loss) |
187,563 |
615,423 |
3,441 |
14,721 |
33,506 |
60,313 |
|||||||||||||||||||||
|
• Net realized gain (loss) on investments |
1,732,536 |
2,757,013 |
9,851 |
39,889 |
62,292 |
187,595 |
|||||||||||||||||||||
|
• Net change in unrealized appreciation or depreciation on investments |
3,587,575 |
(1,605,881 |
) |
7,837 |
47,102 |
188,345 |
249,409 |
||||||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS |
5,507,674 |
1,766,555 |
21,129 |
101,712 |
284,143 |
497,317 |
|||||||||||||||||||||
|
Change From Unit Transactions: |
|||||||||||||||||||||||||||
|
• Net unit transactions |
10,476,240 |
7,838,670 |
(83,842 |
) |
(51,822 |
) |
(606,055 |
) |
(133,577 |
) |
|||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM UNIT TRANSACTIONS |
10,476,240 |
7,838,670 |
(83,842 |
) |
(51,822 |
) |
(606,055 |
) |
(133,577 |
) |
|||||||||||||||||
|
TOTAL INCREASE (DECREASE) IN NET ASSETS |
15,983,914 |
9,605,225 |
(62,713 |
) |
49,890 |
(321,912 |
) |
363,740 |
|||||||||||||||||||
|
NET ASSETS AT DECEMBER 31, 2017 |
50,190,541 |
34,145,921 |
232,617 |
991,026 |
2,233,582 |
3,893,372 |
|||||||||||||||||||||
|
Changes From Operations: |
|||||||||||||||||||||||||||
|
• Net investment income (loss) |
211,048 |
1,029,168 |
4,268 |
15,414 |
32,558 |
45,311 |
|||||||||||||||||||||
|
• Net realized gain (loss) on investments |
3,889,167 |
1,044,368 |
15,351 |
90,271 |
141,011 |
208,920 |
|||||||||||||||||||||
|
• Net change in unrealized appreciation or depreciation on investments |
(11,523,412 |
) |
(8,029,485 |
) |
(30,227 |
) |
(168,721 |
) |
(349,724 |
) |
(583,399 |
) |
|||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS |
(7,423,197 |
) |
(5,955,949 |
) |
(10,608 |
) |
(63,036 |
) |
(176,155 |
) |
(329,168 |
) |
|||||||||||||||
|
Change From Unit Transactions: |
|||||||||||||||||||||||||||
|
• Net unit transactions |
11,315,037 |
10,422,231 |
350 |
12,202 |
(2,076 |
) |
(311,708 |
) |
|||||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM UNIT TRANSACTIONS |
11,315,037 |
10,422,231 |
350 |
12,202 |
(2,076 |
) |
(311,708 |
) |
|||||||||||||||||||
|
TOTAL INCREASE (DECREASE) IN NET ASSETS |
3,891,840 |
4,466,282 |
(10,258 |
) |
(50,834 |
) |
(178,231 |
) |
(640,876 |
) |
|||||||||||||||||
|
NET ASSETS AT DECEMBER 31, 2018 |
$ |
54,082,381 |
$ |
38,612,203 |
$ |
222,359 |
$ |
940,192 |
$ |
2,055,351 |
$ |
3,252,496 |
|||||||||||||||
M-27
Lincoln Life Flexible Premium Variable Life Account M
Statements of changes in net assets (continued)
Years Ended December 31, 2017 and 2018
|
LVIP T. Rowe Price Growth Stock Fund - Standard Class Subaccount |
LVIP T. Rowe Price Structured Mid-Cap Growth Fund - Standard Class Subaccount |
LVIP U.S. Growth Allocation Managed Risk Fund - Standard Class Subaccount |
LVIP Vanguard Domestic Equity ETF Fund - Standard Class Subaccount |
LVIP Vanguard International Equity ETF Fund - Standard Class Subaccount |
LVIP Wellington Capital Growth Fund - Standard Class Subaccount |
LVIP Wellington Mid-Cap Value Fund - Standard Class Subaccount |
|||||||||||||||||||||||||
|
NET ASSETS AT JANUARY 1, 2017 |
$ |
35,251,022 |
$ |
21,280,456 |
$ |
1,591,773 |
$ |
49,917,610 |
$ |
36,297,522 |
$ |
14,925,116 |
$ |
13,570,353 |
|||||||||||||||||
|
Changes From Operations: |
|||||||||||||||||||||||||||||||
|
• Net investment income (loss) |
(187,293 |
) |
(110,264 |
) |
39,319 |
657,533 |
772,491 |
(102,134 |
) |
(28,203 |
) |
||||||||||||||||||||
|
• Net realized gain (loss) on investments |
2,227,805 |
1,184,569 |
52,502 |
698,403 |
278,487 |
1,574,667 |
989,607 |
||||||||||||||||||||||||
|
• Net change in unrealized appreciation or depreciation on investments |
10,354,693 |
4,385,706 |
251,832 |
9,947,190 |
10,095,532 |
3,975,176 |
1,174,074 |
||||||||||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS |
12,395,205 |
5,460,011 |
343,653 |
11,303,126 |
11,146,510 |
5,447,709 |
2,135,478 |
||||||||||||||||||||||||
|
Change From Unit Transactions: |
|||||||||||||||||||||||||||||||
|
• Net unit transactions |
7,303,920 |
3,584,957 |
2,035,996 |
18,732,747 |
11,152,839 |
1,964,141 |
4,855,593 |
||||||||||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM UNIT TRANSACTIONS |
7,303,920 |
3,584,957 |
2,035,996 |
18,732,747 |
11,152,839 |
1,964,141 |
4,855,593 |
||||||||||||||||||||||||
|
TOTAL INCREASE (DECREASE) IN NET ASSETS |
19,699,125 |
9,044,968 |
2,379,649 |
30,035,873 |
22,299,349 |
7,411,850 |
6,991,071 |
||||||||||||||||||||||||
|
NET ASSETS AT DECEMBER 31, 2017 |
54,950,147 |
30,325,424 |
3,971,422 |
79,953,483 |
58,596,871 |
22,336,966 |
20,561,424 |
||||||||||||||||||||||||
|
Changes From Operations: |
|||||||||||||||||||||||||||||||
|
• Net investment income (loss) |
(311,539 |
) |
(84,533 |
) |
115,598 |
810,393 |
1,152,936 |
(157,108 |
) |
22,686 |
|||||||||||||||||||||
|
• Net realized gain (loss) on investments |
7,208,921 |
3,438,785 |
85,470 |
1,740,487 |
308,142 |
2,693,152 |
1,091,065 |
||||||||||||||||||||||||
|
• Net change in unrealized appreciation or depreciation on investments |
(8,778,898 |
) |
(4,863,061 |
) |
(830,801 |
) |
(8,263,156 |
) |
(12,778,822 |
) |
(3,169,226 |
) |
(4,857,353 |
) |
|||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS |
(1,881,516 |
) |
(1,508,809 |
) |
(629,733 |
) |
(5,712,276 |
) |
(11,317,744 |
) |
(633,182 |
) |
(3,743,602 |
) |
|||||||||||||||||
|
Change From Unit Transactions: |
|||||||||||||||||||||||||||||||
|
• Net unit transactions |
11,389,201 |
5,464,698 |
6,601,059 |
20,861,507 |
20,130,052 |
7,433,419 |
4,956,354 |
||||||||||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM UNIT TRANSACTIONS |
11,389,201 |
5,464,698 |
6,601,059 |
20,861,507 |
20,130,052 |
7,433,419 |
4,956,354 |
||||||||||||||||||||||||
|
TOTAL INCREASE (DECREASE) IN NET ASSETS |
9,507,685 |
3,955,889 |
5,971,326 |
15,149,231 |
8,812,308 |
6,800,237 |
1,212,752 |
||||||||||||||||||||||||
|
NET ASSETS AT DECEMBER 31, 2018 |
$ |
64,457,832 |
$ |
34,281,313 |
$ |
9,942,748 |
$ |
95,102,714 |
$ |
67,409,179 |
$ |
29,137,203 |
$ |
21,774,176 |
|||||||||||||||||
See accompanying notes.
M-28
|
M Capital Appreciation Fund Subaccount |
M International Equity Fund Subaccount |
M Large Cap Growth Fund Subaccount |
M Large Cap Value Fund Subaccount |
MFS® VIT Growth Series - Initial Class Subaccount |
MFS® VIT Total Return Series - Initial Class Subaccount |
||||||||||||||||||||||
|
NET ASSETS AT JANUARY 1, 2017 |
$ |
1,425,209 |
$ |
1,609,705 |
$ |
2,369,313 |
$ |
2,005,540 |
$ |
29,131,037 |
$ |
31,361,222 |
|||||||||||||||
|
Changes From Operations: |
|||||||||||||||||||||||||||
|
• Net investment income (loss) |
(4,932 |
) |
24,486 |
(9,612 |
) |
25,625 |
(167,851 |
) |
669,645 |
||||||||||||||||||
|
• Net realized gain (loss) on investments |
173,939 |
5,137 |
130,847 |
115,418 |
2,528,611 |
1,560,644 |
|||||||||||||||||||||
|
• Net change in unrealized appreciation or depreciation on investments |
74,004 |
330,199 |
759,079 |
150,758 |
7,043,164 |
1,669,429 |
|||||||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS |
243,011 |
359,822 |
880,314 |
291,801 |
9,403,924 |
3,899,718 |
|||||||||||||||||||||
|
Change From Unit Transactions: |
|||||||||||||||||||||||||||
|
• Net unit transactions |
(151,015 |
) |
(95,765 |
) |
(322,572 |
) |
(64,586 |
) |
3,251,983 |
4,607,503 |
|||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM UNIT TRANSACTIONS |
(151,015 |
) |
(95,765 |
) |
(322,572 |
) |
(64,586 |
) |
3,251,983 |
4,607,503 |
|||||||||||||||||
|
TOTAL INCREASE (DECREASE) IN NET ASSETS |
91,996 |
264,057 |
557,742 |
227,215 |
12,655,907 |
8,507,221 |
|||||||||||||||||||||
|
NET ASSETS AT DECEMBER 31, 2017 |
1,517,205 |
1,873,762 |
2,927,055 |
2,232,755 |
41,786,944 |
39,868,443 |
|||||||||||||||||||||
|
Changes From Operations: |
|||||||||||||||||||||||||||
|
• Net investment income (loss) |
(75 |
) |
22,867 |
(9,583 |
) |
26,492 |
(239,899 |
) |
763,756 |
||||||||||||||||||
|
• Net realized gain (loss) on investments |
323,185 |
13,380 |
538,588 |
202,509 |
5,076,595 |
2,394,582 |
|||||||||||||||||||||
|
• Net change in unrealized appreciation or depreciation on investments |
(535,501 |
) |
(456,174 |
) |
(669,086 |
) |
(504,589 |
) |
(4,401,116 |
) |
(6,049,394 |
) |
|||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS |
(212,391 |
) |
(419,927 |
) |
(140,081 |
) |
(275,588 |
) |
435,580 |
(2,891,056 |
) |
||||||||||||||||
|
Change From Unit Transactions: |
|||||||||||||||||||||||||||
|
• Net unit transactions |
90,436 |
189,435 |
(64,108 |
) |
57,646 |
5,962,751 |
7,403,644 |
||||||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM UNIT TRANSACTIONS |
90,436 |
189,435 |
(64,108 |
) |
57,646 |
5,962,751 |
7,403,644 |
||||||||||||||||||||
|
TOTAL INCREASE (DECREASE) IN NET ASSETS |
(121,955 |
) |
(230,492 |
) |
(204,189 |
) |
(217,942 |
) |
6,398,331 |
4,512,588 |
|||||||||||||||||
|
NET ASSETS AT DECEMBER 31, 2018 |
$ |
1,395,250 |
$ |
1,643,270 |
$ |
2,722,866 |
$ |
2,014,813 |
$ |
48,185,275 |
$ |
44,381,031 |
|||||||||||||||
M-29
Lincoln Life Flexible Premium Variable Life Account M
Statements of changes in net assets (continued)
Years Ended December 31, 2017 and 2018
|
MFS® VIT Utilities Series - Initial Class Subaccount |
MFS® VIT II Core Equity Portfolio - Initial Class Subaccount |
Neuberger Berman AMT Large Cap Value Portfolio - I Class Subaccount |
Neuberger Berman AMT Mid Cap Growth Portfolio - I Class Subaccount |
Neuberger Berman AMT Mid Cap Intrinsic Value Portfolio - I Class Subaccount |
PIMCO VIT Commodity- RealReturn® Strategy Portfolio - Administrative Class Subaccount |
Putnam VT Equity Income Fund - Class IB Subaccount |
|||||||||||||||||||||||||
|
NET ASSETS AT JANUARY 1, 2017 |
$ |
35,740,262 |
$ |
1,053,679 |
$ |
1,647,804 |
$ |
16,982,080 |
$ |
5,819,933 |
$ |
18,599,830 |
$ |
— |
|||||||||||||||||
|
Changes From Operations: |
|||||||||||||||||||||||||||||||
|
• Net investment income (loss) |
1,405,220 |
5,007 |
387 |
(79,513 |
) |
26,196 |
2,206,348 |
(5,073 |
) |
||||||||||||||||||||||
|
• Net realized gain (loss) on investments |
98,427 |
60,608 |
115,030 |
463,675 |
135,841 |
(794,972 |
) |
4,038 |
|||||||||||||||||||||||
|
• Net change in unrealized appreciation or depreciation on investments |
3,371,315 |
155,033 |
81,687 |
3,580,008 |
749,666 |
(897,600 |
) |
195,250 |
|||||||||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS |
4,874,962 |
220,648 |
197,104 |
3,964,170 |
911,703 |
513,776 |
194,215 |
||||||||||||||||||||||||
|
Change From Unit Transactions: |
|||||||||||||||||||||||||||||||
|
• Net unit transactions |
(1,370,566 |
) |
(247,870 |
) |
(250,071 |
) |
(2,063,452 |
) |
(412,806 |
) |
4,251,360 |
1,503,055 |
|||||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM UNIT TRANSACTIONS |
(1,370,566 |
) |
(247,870 |
) |
(250,071 |
) |
(2,063,452 |
) |
(412,806 |
) |
4,251,360 |
1,503,055 |
|||||||||||||||||||
|
TOTAL INCREASE (DECREASE) IN NET ASSETS |
3,504,396 |
(27,222 |
) |
(52,967 |
) |
1,900,718 |
498,897 |
4,765,136 |
1,697,270 |
||||||||||||||||||||||
|
NET ASSETS AT DECEMBER 31, 2017 |
39,244,658 |
1,026,457 |
1,594,837 |
18,882,798 |
6,318,830 |
23,364,966 |
1,697,270 |
||||||||||||||||||||||||
|
Changes From Operations: |
|||||||||||||||||||||||||||||||
|
• Net investment income (loss) |
227,792 |
2,655 |
9,263 |
(82,823 |
) |
16,490 |
363,591 |
3,586 |
|||||||||||||||||||||||
|
• Net realized gain (loss) on investments |
452,843 |
119,536 |
224,451 |
1,674,833 |
417,539 |
(795,647 |
) |
91,580 |
|||||||||||||||||||||||
|
• Net change in unrealized appreciation or depreciation on investments |
(401,868 |
) |
(160,932 |
) |
(253,021 |
) |
(2,620,821 |
) |
(1,347,829 |
) |
(3,245,940 |
) |
(234,926 |
) |
|||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS |
278,767 |
(38,741 |
) |
(19,307 |
) |
(1,028,811 |
) |
(913,800 |
) |
(3,677,996 |
) |
(139,760 |
) |
||||||||||||||||||
|
Change From Unit Transactions: |
|||||||||||||||||||||||||||||||
|
• Net unit transactions |
(2,343,360 |
) |
(66,607 |
) |
(169,899 |
) |
(2,042,726 |
) |
(405,146 |
) |
2,694,098 |
(115,391 |
) |
||||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM UNIT TRANSACTIONS |
(2,343,360 |
) |
(66,607 |
) |
(169,899 |
) |
(2,042,726 |
) |
(405,146 |
) |
2,694,098 |
(115,391 |
) |
||||||||||||||||||
|
TOTAL INCREASE (DECREASE) IN NET ASSETS |
(2,064,593 |
) |
(105,348 |
) |
(189,206 |
) |
(3,071,537 |
) |
(1,318,946 |
) |
(983,898 |
) |
(255,151 |
) |
|||||||||||||||||
|
NET ASSETS AT DECEMBER 31, 2018 |
$ |
37,180,065 |
$ |
921,109 |
$ |
1,405,631 |
$ |
15,811,261 |
$ |
4,999,884 |
$ |
22,381,068 |
$ |
1,442,119 |
|||||||||||||||||
See accompanying notes.
M-30
|
Putnam VT Global Health Care Fund - Class IB Subaccount |
Putnam VT Growth & Income Fund - Class IB Subaccount |
Templeton Foreign VIP Fund - Class 1 Subaccount |
Templeton Foreign VIP Fund - Class 2 Subaccount |
Templeton Global Bond VIP Fund - Class 1 Subaccount |
Templeton Growth VIP Fund - Class 1 Subaccount |
||||||||||||||||||||||
|
NET ASSETS AT JANUARY 1, 2017 |
$ |
2,014,431 |
$ |
1,395,426 |
$ |
1,318,979 |
$ |
3,196,546 |
$ |
27,617,345 |
$ |
7,464,657 |
|||||||||||||||
|
Changes From Operations: |
|||||||||||||||||||||||||||
|
• Net investment income (loss) |
128 |
27,569 |
30,179 |
71,218 |
(201,895 |
) |
111,782 |
||||||||||||||||||||
|
• Net realized gain (loss) on investments |
152,550 |
316,451 |
10,184 |
29,518 |
(48,391 |
) |
120,131 |
||||||||||||||||||||
|
• Net change in unrealized appreciation or depreciation on investments |
116,167 |
(275,023 |
) |
165,471 |
390,661 |
601,859 |
1,095,209 |
||||||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS |
268,845 |
68,997 |
205,834 |
491,397 |
351,573 |
1,327,122 |
|||||||||||||||||||||
|
Change From Unit Transactions: |
|||||||||||||||||||||||||||
|
• Net unit transactions |
(401,967 |
) |
(1,464,423 |
) |
(177,534 |
) |
(136,591 |
) |
7,954,441 |
(340,827 |
) |
||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM UNIT TRANSACTIONS |
(401,967 |
) |
(1,464,423 |
) |
(177,534 |
) |
(136,591 |
) |
7,954,441 |
(340,827 |
) |
||||||||||||||||
|
TOTAL INCREASE (DECREASE) IN NET ASSETS |
(133,122 |
) |
(1,395,426 |
) |
28,300 |
354,806 |
8,306,014 |
986,295 |
|||||||||||||||||||
|
NET ASSETS AT DECEMBER 31, 2017 |
1,881,309 |
— |
1,347,279 |
3,551,352 |
35,923,359 |
8,450,952 |
|||||||||||||||||||||
|
Changes From Operations: |
|||||||||||||||||||||||||||
|
• Net investment income (loss) |
8,708 |
— |
29,149 |
72,051 |
(276,304 |
) |
142,963 |
||||||||||||||||||||
|
• Net realized gain (loss) on investments |
281,442 |
— |
4,765 |
(27,343 |
) |
(52,437 |
) |
774,169 |
|||||||||||||||||||
|
• Net change in unrealized appreciation or depreciation on investments |
(303,322 |
) |
— |
(237,352 |
) |
(584,380 |
) |
971,607 |
(2,106,628 |
) |
|||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS |
(13,172 |
) |
— |
(203,438 |
) |
(539,672 |
) |
642,866 |
(1,189,496 |
) |
|||||||||||||||||
|
Change From Unit Transactions: |
|||||||||||||||||||||||||||
|
• Net unit transactions |
(167,147 |
) |
— |
(60,334 |
) |
(587,593 |
) |
8,624,824 |
(707,238 |
) |
|||||||||||||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM UNIT TRANSACTIONS |
(167,147 |
) |
— |
(60,334 |
) |
(587,593 |
) |
8,624,824 |
(707,238 |
) |
|||||||||||||||||
|
TOTAL INCREASE (DECREASE) IN NET ASSETS |
(180,319 |
) |
— |
(263,772 |
) |
(1,127,265 |
) |
9,267,690 |
(1,896,734 |
) |
|||||||||||||||||
|
NET ASSETS AT DECEMBER 31, 2018 |
$ |
1,700,990 |
$ |
— |
$ |
1,083,507 |
$ |
2,424,087 |
$ |
45,191,049 |
$ |
6,554,218 |
|||||||||||||||
M-31
Lincoln Life Flexible Premium Variable Life Account M
Statements of changes in net assets (continued)
Years Ended December 31, 2017 and 2018
|
Templeton Growth VIP Fund - Class 2 Subaccount |
|||||||
|
NET ASSETS AT JANUARY 1, 2017 |
$ |
1,083,095 |
|||||
|
Changes From Operations: |
|||||||
|
• Net investment income |
13,385 |
||||||
|
• Net realized gain on investments |
29,317 |
||||||
|
• Net change in unrealized appreciation or depreciation on investments |
151,021 |
||||||
|
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS |
193,723 |
||||||
|
Change From Unit Transactions: |
|||||||
|
• Net unit transactions |
(19,141 |
) |
|||||
|
NET DECREASE IN NET ASSETS RESULTING FROM UNIT TRANSACTIONS |
(19,141 |
) |
|||||
|
TOTAL INCREASE (DECREASE) IN NET ASSETS |
174,582 |
||||||
|
NET ASSETS AT DECEMBER 31, 2017 |
1,257,677 |
||||||
|
Changes From Operations: |
|||||||
|
• Net investment income |
17,661 |
||||||
|
• Net realized gain on investments |
118,249 |
||||||
|
• Net change in unrealized appreciation or depreciation on investments |
(319,425 |
) |
|||||
|
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS |
(183,515 |
) |
|||||
|
Change From Unit Transactions: |
|||||||
|
• Net unit transactions |
(57,660 |
) |
|||||
|
NET DECREASE IN NET ASSETS RESULTING FROM UNIT TRANSACTIONS |
(57,660 |
) |
|||||
|
TOTAL DECREASE IN NET ASSETS |
(241,175 |
) |
|||||
|
NET ASSETS AT DECEMBER 31, 2018 |
$ |
1,016,502 |
|||||
See accompanying notes.
M-32
Lincoln Life Flexible Premium Variable
Life Account M
Notes to financial statements
December 31, 2018
1. Accounting Policies and Variable Account Information
The Variable Account: Lincoln Life Flexible Premium Variable Life Account M (the Variable Account) is a segregated investment account of The Lincoln National Life Insurance Company (the Company) and is registered as a unit investment trust with the Securities and Exchange Commission under the Investment Company Act of 1940, as amended. The operations of the Variable Account, which commenced on June 18, 1998, are part of the operations of the Company. The Variable Account consists of eighteen products as follows:
|
• VUL-I • Lincoln VULCV • Lincoln VULCV-II • Lincoln VULCV-III • Lincoln VULCV-IV • Lincoln VULDB • Lincoln VULDB-II • Lincoln VULDB-IV • MoneyGuard VUL • Lincoln VULONE • Lincoln Momentum VULONE |
• Lincoln VULONE 2005 • Lincoln Momentum VULONE 2005 • Lincoln VULONE 2007 • Lincoln Momentum VULONE 2007 • Lincoln AssetEdge VUL • Lincoln VULONE 2012 • Lincoln VULONE 2014 |
||||||
The assets of the Variable Account are owned by the Company. The Variable Account's assets support the variable life policies and may not be used to satisfy liabilities arising from any other business of the Company.
Basis of Presentation: The accompanying financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for unit investment trusts.
Accounting Estimates: The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions affecting the reported amounts as of the date of the financial statements. Those estimates are inherently subject to change and actual results could differ from those estimates. Included among the material (or potentially material) reported amounts that require use of estimates is the fair value of certain assets.
Investments: The assets of the Variable Account are divided into variable subaccounts, each of which may be invested in shares of one of one hundred thirty mutual funds (the Funds) of twenty open-ended management
investment companies, each Fund with its own investment objective. The Funds are:
AIM Variable Insurance Funds (Invesco Variable Insurance Funds):
Invesco V.I. American Franchise Fund - Series I Shares
Invesco V.I. Core Equity Fund - Series I Shares
Invesco V.I. Core Plus Bond Fund - Series I Shares
Invesco V.I. International Growth Fund - Series I Shares
AllianceBernstein Variable Products Series Fund:
AB VPS Global Thematic Growth Portfolio - Class A
AB VPS Growth and Income Portfolio - Class A
AB VPS International Value Portfolio - Class A
AB VPS Large Cap Growth Portfolio - Class A
AB VPS Small/Mid Cap Value Portfolio - Class A
American Century Variable Portfolios, Inc.:
American Century VP Balanced Fund - Class I
American Century VP Inflation Protection Fund - Class I
American Funds Insurance Series®:
American Funds Global Growth Fund - Class 2
American Funds Global Small Capitalization Fund - Class 2
American Funds Growth Fund - Class 2
American Funds Growth-Income Fund - Class 2
American Funds International Fund - Class 2
BlackRock Variable Series Funds, Inc.:
BlackRock Global Allocation V.I. Fund - Class I
Delaware VIP® Trust:
Delaware VIP® Diversified Income Series - Standard Class
Delaware VIP® Emerging Markets Series - Standard Class
Delaware VIP® High Yield Series - Standard Class
Delaware VIP® Limited-Term Diversified Income Series - Standard Class
Delaware VIP® REIT Series - Standard Class
Delaware VIP® Small Cap Value Series - Standard Class
Delaware VIP® Smid Cap Core Series - Standard Class
Delaware VIP® U.S. Growth Series - Standard Class
Delaware VIP® Value Series - Standard Class
Deutsche DWS Investments VIT Funds:
DWS Equity 500 Index VIP Portfolio - Class A
DWS Small Cap Index VIP Portfolio - Class A
Deutsche DWS Variable Series II:
DWS Alternative Asset Allocation VIP Portfolio - Class A
Fidelity® Variable Insurance Products:
Fidelity® VIP Asset Manager Portfolio - Initial Class
Fidelity® VIP Contrafund® Portfolio - Service Class
Fidelity® VIP Equity-Income Portfolio - Initial Class
Fidelity® VIP Equity-Income Portfolio - Service Class
Fidelity® VIP Growth Opportunities Portfolio - Service Class
Fidelity® VIP Growth Portfolio - Service Class
Fidelity® VIP High Income Portfolio - Service Class
Fidelity® VIP Investment Grade Bond Portfolio - Initial Class
Fidelity® VIP Mid Cap Portfolio - Service Class
Fidelity® VIP Overseas Portfolio - Service Class
M-33
Lincoln Life Flexible Premium Variable
Life Account M
Notes to financial statements (continued)
1. Accounting Policies and Variable Account Information (continued)
Franklin Templeton Variable Insurance Products Trust:
Franklin Income VIP Fund - Class 1
Franklin Mutual Shares VIP Fund - Class 1
Franklin Small-Mid Cap Growth VIP Fund - Class 1
Templeton Foreign VIP Fund - Class 1
Templeton Foreign VIP Fund - Class 2
Templeton Global Bond VIP Fund - Class 1
Templeton Growth VIP Fund - Class 1
Templeton Growth VIP Fund - Class 2
Janus Aspen Series:
Janus Henderson Balanced Portfolio - Institutional Shares
Janus Henderson Balanced Portfolio - Service Shares
Janus Henderson Enterprise Portfolio - Service Shares
Janus Henderson Global Research Portfolio - Institutional Shares
Janus Henderson Global Research Portfolio - Service Shares
Janus Henderson Global Technology Portfolio - Service Shares
JPMorgan Insurance Trust:
JPMorgan Insurance Trust Global Allocation Portfolio - Class 1
Legg Mason Partners Variable Equity Trust:
ClearBridge Variable Mid Cap Portfolio - Class I
Lincoln Variable Insurance Products Trust*:
LVIP Baron Growth Opportunities Fund - Service Class
LVIP Baron Growth Opportunities Fund - Standard Class
LVIP BlackRock Dividend Value Managed Volatility Fund - Standard Class
LVIP BlackRock Global Growth ETF Allocation Managed Risk Fund - Standard Class
LVIP BlackRock Inflation Protected Bond Fund - Standard Class
LVIP BlackRock U.S. Growth ETF Allocation Managed Risk Fund - Standard Class
LVIP Blended Large Cap Growth Managed Volatility Fund - Standard Class
LVIP Blended Mid Cap Managed Volatility Fund - Standard Class
LVIP Clarion Global Real Estate Fund - Standard Class
LVIP ClearBridge Large Cap Managed Volatility Fund - Standard Class
LVIP Delaware Bond Fund - Standard Class
LVIP Delaware Diversified Floating Rate Fund - Standard Class
LVIP Delaware Social Awareness Fund - Standard Class
LVIP Delaware Special Opportunities Fund - Standard Class
LVIP Delaware Wealth Builder Fund - Standard Class
LVIP Dimensional International Core Equity Fund - Standard Class
LVIP Dimensional International Equity Managed Volatility Fund - Standard Class
LVIP Dimensional U.S. Core Equity 1 Fund - Standard Class
LVIP Dimensional U.S. Core Equity 2 Fund - Standard Class
LVIP Dimensional U.S. Equity Managed Volatility Fund - Standard Class
LVIP Dimensional/Vanguard Total Bond Fund - Standard Class
LVIP Franklin Templeton Global Equity Managed Volatility Fund - Standard Class
LVIP Global Conservative Allocation Managed Risk Fund - Standard Class
LVIP Global Growth Allocation Managed Risk Fund - Standard Class
LVIP Global Income Fund - Standard Class
LVIP Global Moderate Allocation Managed Risk Fund - Standard Class
LVIP Government Money Market Fund - Standard Class
LVIP Invesco Diversified Equity-Income Managed Volatility Fund - Standard Class
LVIP JPMorgan High Yield Fund - Standard Class
LVIP JPMorgan Select Mid Cap Value Managed Volatility Fund - Standard Class
LVIP MFS International Growth Fund - Standard Class
LVIP MFS Value Fund - Standard Class
LVIP Mondrian International Value Fund - Standard Class
LVIP Multi-Manager Global Equity Managed Volatility Fund - Standard Class
LVIP SSGA Bond Index Fund - Standard Class
LVIP SSGA Conservative Index Allocation Fund - Standard Class
LVIP SSGA Conservative Structured Allocation Fund - Standard Class
LVIP SSGA Developed International 150 Fund - Standard Class
LVIP SSGA Emerging Markets 100 Fund - Standard Class
LVIP SSGA Global Tactical Allocation Managed Volatility Fund - Standard Class
LVIP SSGA International Index Fund - Standard Class
LVIP SSGA International Managed Volatility Fund - Standard Class
LVIP SSGA Large Cap 100 Fund - Standard Class
LVIP SSGA Moderate Index Allocation Fund - Standard Class
LVIP SSGA Moderate Structured Allocation Fund - Standard Class
M-34
Lincoln Life Flexible Premium Variable
Life Account M
Notes to financial statements (continued)
1. Accounting Policies and Variable Account Information (continued)
LVIP SSGA Moderately Aggressive Index Allocation Fund - Standard Class
LVIP SSGA Moderately Aggressive Structured Allocation Fund - Standard Class
LVIP SSGA S&P 500 Index Fund - Standard Class
LVIP SSGA Small-Cap Index Fund - Standard Class
LVIP SSGA Small-Mid Cap 200 Fund - Standard Class
LVIP T. Rowe Price 2010 Fund - Standard Class
LVIP T. Rowe Price 2020 Fund - Standard Class
LVIP T. Rowe Price 2030 Fund - Standard Class
LVIP T. Rowe Price 2040 Fund - Standard Class
LVIP T. Rowe Price Growth Stock Fund - Standard Class
LVIP T. Rowe Price Structured Mid-Cap Growth Fund - Standard Class
LVIP U.S. Growth Allocation Managed Risk Fund - Standard Class
LVIP Vanguard Domestic Equity ETF Fund - Standard Class
LVIP Vanguard International Equity ETF Fund - Standard Class
LVIP Wellington Capital Growth Fund - Standard Class
LVIP Wellington Mid-Cap Value Fund - Standard Class
M Fund, Inc.:
M Capital Appreciation Fund
M International Equity Fund
M Large Cap Growth Fund
M Large Cap Value Fund
MFS Variable Insurance Trust:
MFS® VIT Growth Series - Initial Class
MFS® VIT Total Return Series - Initial Class
MFS® VIT Utilities Series - Initial Class
MFS Variable Insurance Trust II:
MFS® VIT II Core Equity Portfolio - Initial Class
Neuberger Berman Advisers Management Trust:
Neuberger Berman AMT Large Cap Value Portfolio - I Class
Neuberger Berman AMT Mid Cap Growth Portfolio - I Class
Neuberger Berman AMT Mid Cap Intrinsic Value Portfolio - I Class
PIMCO Variable Insurance Trust:
PIMCO VIT CommodityRealReturn® Strategy Portfolio - Administrative Class
Putnam Variable Trust:
Putnam VT Equity Income Fund - Class IB
Putnam VT Global Health Care Fund - Class IB
* Denotes an affiliate of the Company
Each subaccount invests in shares of a single underlying Fund. The investment performance of each subaccount will reflect the investment performance of the underlying Fund less separate account expenses. There is no assurance that the investment objective of any underlying Fund will be met. A Fund calculates a daily net asset value per share ("NAV") which is based on the market value of its investment portfolio. The amount of risk varies significantly between subaccounts. Due to the level of risk associated with certain investment portfolios, it is at least reasonably possible that changes in the values of investment portfolios will occur in the near term and that such changes could materially affect contract holders' investments in the Funds and the amounts reported in the financial statements. The contract holder assumes all of the investment performance risk for the subaccounts selected.
Investments in the Funds are stated at fair value as determined by the closing net asset value per share on December 31, 2018. Net asset value is quoted by the Funds as derived by the fair value of the Funds' underlying investments. The difference between cost and net asset value is reflected as unrealized appreciation or depreciation of investments. There are no redemption restrictions on investments in the Funds.
Investments for which the fair value is measured at NAV using the practical expedient (investments in investees measured at NAV) are excluded from the fair value hierarchy. Accordingly, the Variable Account's investments in the Funds have not been classified in the fair value hierarchy.
Investment transactions are accounted for on a trade-date basis. The cost of investments sold is determined by the average cost method.
ASC 946-10-15, "Financial Services - Investment Companies (Topic 946) - Scope and Scope Exceptions" provides accounting guidance for assessing whether an entity is an investment company. This guidance evaluates the entity's purpose and design to determine whether the entity is an investment company. The standard also adds additional disclosure requirements regarding contractually required commitments to investees. Management has evaluated the criteria in the standard and concluded that the Variable Account qualifies as an investment company and therefore applies the accounting requirements of ASC 946.
M-35
Lincoln Life Flexible Premium Variable Life Account M
Notes to financial statements (continued)
1. Accounting Policies and Variable Account Information (continued)
Dividends: Dividends paid to the Variable Account are automatically reinvested in shares of the Funds on the payable date. Dividend income is recorded on the ex-dividend date.
Federal Income Taxes: Operations of the Variable Account form a part of and are taxed with operations of the Company, which is taxed as a "life insurance company" under the Internal Revenue Code. The Variable Account will not be taxed as a regulated investment company under Subchapter M of the Internal Revenue Code, as amended. Under current federal income tax law, no federal income taxes are payable or receivable with respect to the Variable Account's net investment income and the net realized gain (loss) on investments.
Investment Fund Changes: During 2017, the following funds changed their names:
|
Previous Fund Name |
New Fund Name |
||||||
|
Delaware VIP® Smid Cap Growth Series - Standard Class |
Delaware VIP® Smid Cap Core Series - Standard Class |
||||||
|
Janus Aspen Balanced Portfolio - Institutional Shares |
Janus Henderson Balanced Portfolio - Institutional Shares |
||||||
|
Janus Aspen Balanced Portfolio - Service Shares |
Janus Henderson Balanced Portfolio - Service Shares |
||||||
|
Janus Aspen Enterprise Portfolio - Service Shares |
Janus Henderson Enterprise Portfolio - Service Shares |
||||||
|
Janus Aspen Global Research Portfolio - Institutional Shares |
Janus Henderson Global Research Portfolio - Institutional Shares |
||||||
|
Janus Aspen Global Research Portfolio - Service Shares |
Janus Henderson Global Research Portfolio - Service Shares |
||||||
|
Janus Aspen Global Technology Portfolio - Service Shares |
Janus Henderson Global Technology Portfolio - Service Shares |
||||||
|
LVIP Delaware Foundation Aggressive Allocation Fund - Standard Class |
LVIP Delaware Wealth Builder Fund - Standard Class |
||||||
During 2017, the following fund merger occurred:
|
Fund Acquired |
Acquiring Fund |
||||||
|
Putnam VT Growth & Income Fund - Class IB |
Putnam VT Equity Income Fund - Class IB |
||||||
During 2018, the following funds changed their names:
|
Previous Fund Name |
New Fund Name |
||||||
|
LVIP Managed Risk Profile 2010 Fund - Standard Class |
LVIP T. Rowe Price 2010 Fund - Standard Class |
||||||
|
LVIP Managed Risk Profile 2020 Fund - Standard Class |
LVIP T. Rowe Price 2020 Fund - Standard Class |
||||||
|
LVIP Managed Risk Profile 2030 Fund - Standard Class |
LVIP T. Rowe Price 2030 Fund - Standard Class |
||||||
|
LVIP Managed Risk Profile 2040 Fund - Standard Class |
LVIP T. Rowe Price 2040 Fund - Standard Class |
||||||
Also during 2018, the following fund families changed their names:
|
Previous Fund Family Name |
New Fund Family Name |
||||||
|
Deutsche Investments VIT Funds |
Deutsche DWS Investments VIT Funds |
||||||
|
Deutsche Variable Series II |
Deutsche DWS Variable Series II |
||||||
2. Mortality and Expense Guarantees and Other Transactions with Affiliates
Amounts are paid to the Company for mortality and expense guarantees at a percentage of the current value of the Variable Account each day. The mortality and expense risk charges for each of the variable subaccounts are reported in the statements of operations. The rates are as follows for the eighteen policy types within the Variable Account:
• VUL-I - annual rate of .80% for policy years one through twelve and .55% thereafter.
• Lincoln VULCV - annual rate of .75% for policy years one through ten, .35% for policy years eleven through twenty and .20% thereafter.
• Lincoln VULCV-II - annual rate of .75% for policy years one through ten, .35% for policy years eleven through twenty and .20% thereafter.
• Lincoln VULCV-III - annual rate of .75% for policy years one through ten, .35% for policy years eleven through twenty and .20% thereafter.
• Lincoln VULCV-IV - annual rate of .60% for policy years one through ten and .20% thereafter.
• Lincoln VULDB - annual rate of .90% for policy years one through nineteen and .20% thereafter.
• Lincoln VULDB-II - annual rate of .90% for policy years one through nineteen and .20% thereafter.
• Lincoln VULDB-IV - annual rate of .90% for policy years one through nineteen and .20% thereafter.
• MoneyGuard VUL - annual rate of 1.00%.
M-36
Lincoln Life Flexible Premium Variable
Life Account M
Notes to financial statements (continued)
2. Mortality and Expense Guarantees and Other Transactions with Affiliates
• Lincoln VULONE - annual rate of .50% for policy years one through ten and .20% thereafter.
• Lincoln Momentum VULONE - annual rate of .50% for policy years one through ten and .20% thereafter.
• Lincoln VULONE 2005 - annual rate of .50% for policy years one through ten and .20% thereafter.
• Lincoln Momentum VULONE 2005 - annual rate of .50% for policy years one through ten and .20% thereafter.
• Lincoln VULONE 2007 - annual rate of .60% for policy years one through ten, .20% for policy years eleven through twenty and 0.00% thereafter.
• Lincoln Momentum VULONE 2007 - annual rate of .60% for policy years one through ten, .20% for policy years eleven through twenty and 0.00% thereafter.
• Lincoln AssetEdge VUL - annual rate of .10% for policy years one through twenty and 0.00% thereafter for policies issued before 10/19/09. For policies issued on or after 10/19/09 an annual rate of .15% is charged for policy years one through fifteen and 0.00% thereafter.
• Lincoln VULONE 2012 - annual rate of .60% for policy years one through ten, .20% for policy years eleven through twenty and 0.00% thereafter.
• Lincoln VULONE 2014 - annual rate of .90% for policy years one through ten, .20% for policy years eleven through twenty and 0.00% thereafter.
The Company deducts a premium load, based on product, to cover state taxes and federal income tax liabilities and a portion of the sales expenses incurred by the Company. Refer to the product prospectuses for the applicable rate. The premium loads for the years ended December 31, 2018 and 2017, amounted to $96,384,189 and $72,147,738, respectively.
The Company charges a monthly administrative fee for items such as premium billings and collection, policy
value calculation, confirmations and periodic reports. Refer to the product prospectus for the applicable administrative fee rates. Administrative fees for the years ended December 31, 2018 and 2017, totaled $102,483,311 and $83,910,228, respectively.
The Company assumes responsibility for providing the insurance benefit included in the policy. On a monthly basis, a cost of insurance charge is deducted proportionately from the value of each variable subaccount and/or fixed account funding option. The fixed account is part of the general account of the Company and is not included in these financial statements. The cost of insurance charge depends on the attained age, risk classification, gender classification (in accordance with state law) and the current net amount at risk. The cost of insurance charges for the years ended December 31, 2018 and 2017, amounted to $140,798,015 and $124,716,418, respectively.
Under certain circumstances, the Company reserves the right to charge a transfer fee, refer to the product prospectus for applicable rates. For the years ended December 31, 2018 and 2017, transfer charges amounted to $194 and $364, respectively.
The Company, upon full surrender of a policy, may charge a surrender charge. This charge is in part a deferred sales charge and in part a recovery of certain first year administrative costs. The amount of the surrender charge, if any, will depend on the amount of the death benefit, the amount of premium payments made during the first two policy years and the age of the policy. In no event will the surrender charge exceed the maximum allowed by state or federal law. No surrender charge is imposed on partial surrenders for Lincoln VULONE 2007, Lincoln Momentum VULONE 2007, Lincoln VULONE 2012, Lincoln VULONE 2014 and Lincoln AssetEdge VUL. For all other products, an administrative fee of $25 (not to exceed 2% of the amount withdrawn) is imposed, allocated pro-rata among the variable subaccounts (and, where applicable, the fixed account) from which the partial surrender proceeds are taken. Full surrender charges and partial surrender administrative charges paid to the Company attributable to the variable subaccounts for the years ended December 31, 2018 and 2017, were $6,388,046 and $5,995,316, respectively.
Premium load, cost of insurance, administrative, surrender and transfer fees are included within Contract withdrawals on the Statements of Changes in Net Assets.
M-37
Lincoln Life Flexible Premium Variable Life Account M
Notes to financial statements (continued)
3. Financial Highlights
A summary of the fee rates, unit values, units outstanding, net assets and total return and investment income ratios for variable life contracts as of and for each year or period in the five years ended December 31, 2018, follows:
|
Subaccount |
Year |
Commencement Date(1) |
Minimum Fee Rate(2) |
Maximum Fee Rate(2) |
Minimum Unit Value(3) |
Maximum Unit Value(3) |
Units Outstanding |
Net Assets |
Minimum Total Return(4) |
Maximum Total Return(4) |
Investment Income Ratio(5) |
||||||||||||||||||||||||||||||||||||
|
AB VPS Global Thematic Growth Portfolio - Class A |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
$ |
11.23 |
$ |
26.94 |
547,623 |
$ |
8,151,257 |
-10.60 |
% |
-9.89 |
% |
0.00 |
% |
||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
12.84 |
29.97 |
496,531 |
8,594,636 |
35.44 |
% |
36.53 |
% |
0.48 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
9.41 |
22.01 |
419,905 |
5,477,044 |
-1.51 |
% |
-0.72 |
% |
0.00 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
10.70 |
22.22 |
401,151 |
5,474,239 |
1.97 |
% |
2.79 |
% |
0.00 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
11.53 |
21.68 |
338,698 |
4,612,558 |
4.12 |
% |
4.96 |
% |
0.00 |
% |
|||||||||||||||||||||||||||||||||
|
AB VPS Growth and Income Portfolio - Class A |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
10.93 |
34.87 |
912,651 |
16,768,385 |
-6.45 |
% |
-5.70 |
% |
0.98 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
13.59 |
37.07 |
1,047,809 |
20,780,746 |
17.86 |
% |
18.81 |
% |
1.45 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
11.45 |
31.28 |
1,088,497 |
19,044,608 |
10.30 |
% |
11.19 |
% |
0.93 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
10.97 |
28.21 |
1,069,410 |
18,358,604 |
0.79 |
% |
1.60 |
% |
1.44 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
13.98 |
27.83 |
992,623 |
18,629,064 |
8.56 |
% |
9.43 |
% |
1.38 |
% |
|||||||||||||||||||||||||||||||||
|
AB VPS International Value Portfolio - Class A |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
6.37 |
11.99 |
881,280 |
8,425,814 |
-23.48 |
% |
-22.87 |
% |
1.55 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
8.29 |
15.58 |
860,133 |
10,339,799 |
24.30 |
% |
25.29 |
% |
2.21 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
6.65 |
12.47 |
956,276 |
8,805,530 |
-1.39 |
% |
-0.60 |
% |
1.23 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
6.73 |
12.57 |
946,832 |
8,677,035 |
1.66 |
% |
2.49 |
% |
2.47 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
6.60 |
12.30 |
989,312 |
8,864,342 |
-7.06 |
% |
-6.30 |
% |
3.71 |
% |
|||||||||||||||||||||||||||||||||
|
AB VPS Large Cap Growth Portfolio - Class A |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.20 |
% |
0.90 |
% |
17.37 |
41.70 |
128,466 |
3,310,424 |
1.66 |
% |
2.39 |
% |
0.00 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.20 |
% |
0.90 |
% |
16.97 |
40.79 |
107,378 |
2,905,893 |
30.80 |
% |
31.73 |
% |
0.00 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.20 |
% |
0.90 |
% |
12.88 |
31.02 |
122,418 |
2,539,571 |
1.71 |
% |
2.42 |
% |
0.00 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.20 |
% |
0.90 |
% |
12.58 |
30.33 |
146,506 |
2,988,450 |
10.12 |
% |
10.89 |
% |
0.00 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.20 |
% |
0.90 |
% |
16.05 |
27.39 |
127,878 |
2,357,039 |
13.12 |
% |
13.74 |
% |
0.00 |
% |
|||||||||||||||||||||||||||||||||
|
AB VPS Small/Mid Cap Value Portfolio - Class A |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
1.00 |
% |
9.30 |
42.86 |
2,561,697 |
39,596,867 |
-15.87 |
% |
-15.11 |
% |
0.48 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
1.00 |
% |
12.80 |
50.95 |
2,270,416 |
44,103,285 |
12.03 |
% |
13.03 |
% |
0.47 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
1.00 |
% |
11.33 |
45.48 |
1,928,473 |
35,255,726 |
23.84 |
% |
24.96 |
% |
0.57 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
1.00 |
% |
9.90 |
36.72 |
1,713,484 |
27,362,997 |
-6.43 |
% |
-5.58 |
% |
0.81 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
1.00 |
% |
15.83 |
39.25 |
1,360,777 |
26,108,168 |
8.11 |
% |
9.09 |
% |
0.71 |
% |
|||||||||||||||||||||||||||||||||
|
American Century VP Balanced Fund - Class I |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.15 |
% |
0.90 |
% |
11.25 |
11.48 |
1,639,629 |
18,464,017 |
-4.69 |
% |
-3.97 |
% |
1.65 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.15 |
% |
0.90 |
% |
11.81 |
11.95 |
546,506 |
6,458,581 |
12.89 |
% |
13.74 |
% |
1.76 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
6/7/16 |
0.15 |
% |
0.90 |
% |
10.46 |
10.51 |
151,196 |
1,582,479 |
0.29 |
% |
3.84 |
% |
1.04 |
% |
||||||||||||||||||||||||||||||||
|
American Century VP Inflation Protection Fund - Class I |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
10.01 |
14.59 |
1,008,166 |
11,202,108 |
-3.44 |
% |
-2.67 |
% |
3.07 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
10.37 |
15.11 |
1,048,384 |
12,406,425 |
2.99 |
% |
3.82 |
% |
2.85 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
10.02 |
14.67 |
1,027,551 |
12,142,362 |
3.77 |
% |
4.60 |
% |
1.94 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
9.60 |
14.81 |
986,137 |
11,577,435 |
-3.16 |
% |
-2.38 |
% |
2.35 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
9.86 |
15.24 |
977,276 |
12,687,686 |
2.65 |
% |
3.47 |
% |
1.47 |
% |
|||||||||||||||||||||||||||||||||
|
American Funds Global Growth Fund - Class 2 |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
11.27 |
31.71 |
6,501,824 |
96,750,118 |
-9.86 |
% |
-9.13 |
% |
0.74 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
12.80 |
34.99 |
4,998,285 |
86,532,641 |
30.29 |
% |
31.34 |
% |
0.71 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
9.75 |
26.78 |
4,100,726 |
58,234,955 |
-0.28 |
% |
0.52 |
% |
0.88 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
11.06 |
26.75 |
3,238,915 |
50,119,731 |
5.98 |
% |
6.83 |
% |
1.09 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
14.03 |
25.14 |
2,426,384 |
39,922,848 |
1.40 |
% |
2.21 |
% |
1.24 |
% |
|||||||||||||||||||||||||||||||||
|
American Funds Global Small Capitalization Fund - Class 2 |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
10.17 |
31.97 |
5,607,302 |
75,647,034 |
-11.35 |
% |
-10.64 |
% |
0.08 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
11.39 |
36.06 |
4,868,057 |
77,181,740 |
24.77 |
% |
25.77 |
% |
0.43 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
9.07 |
28.91 |
4,358,690 |
57,801,698 |
1.18 |
% |
2.00 |
% |
0.24 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
1.00 |
% |
9.93 |
35.54 |
3,770,193 |
52,642,645 |
-0.74 |
% |
0.17 |
% |
0.00 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
1.00 |
% |
11.49 |
35.81 |
2,554,875 |
41,676,174 |
1.10 |
% |
2.02 |
% |
0.13 |
% |
|||||||||||||||||||||||||||||||||
M-38
Lincoln Life Flexible Premium Variable Life Account M
Notes to financial statements (continued)
3. Financial Highlights (continued)
|
Subaccount |
Year |
Commencement Date(1) |
Minimum Fee Rate(2) |
Maximum Fee Rate(2) |
Minimum Unit Value(3) |
Maximum Unit Value(3) |
Units Outstanding |
Net Assets |
Minimum Total Return(4) |
Maximum Total Return(4) |
Investment Income Ratio(5) |
||||||||||||||||||||||||||||||||||||
|
American Funds Growth Fund - Class 2 |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
$ |
11.94 |
$ |
41.05 |
15,511,357 |
$ |
296,842,587 |
-1.14 |
% |
-0.35 |
% |
0.45 |
% |
||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
13.99 |
41.29 |
13,849,034 |
281,539,220 |
27.14 |
% |
28.16 |
% |
0.52 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
10.93 |
32.30 |
12,238,220 |
208,322,080 |
8.51 |
% |
9.38 |
% |
0.73 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
1.00 |
% |
11.52 |
29.60 |
10,748,835 |
183,473,700 |
5.80 |
% |
6.75 |
% |
0.61 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
1.00 |
% |
14.43 |
27.80 |
9,669,408 |
172,499,620 |
7.43 |
% |
8.40 |
% |
0.84 |
% |
|||||||||||||||||||||||||||||||||
|
American Funds Growth-Income Fund - Class 2 |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
1.00 |
% |
11.37 |
34.50 |
17,347,308 |
304,616,643 |
-2.76 |
% |
-1.88 |
% |
1.47 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
1.00 |
% |
13.17 |
35.25 |
15,241,486 |
288,725,558 |
21.17 |
% |
22.26 |
% |
1.48 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
1.00 |
% |
10.79 |
28.90 |
12,593,854 |
210,742,257 |
10.41 |
% |
11.41 |
% |
1.42 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
1.00 |
% |
10.87 |
26.01 |
10,692,293 |
174,387,716 |
0.45 |
% |
1.35 |
% |
1.36 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
1.00 |
% |
14.41 |
25.73 |
8,867,192 |
156,746,820 |
9.53 |
% |
10.52 |
% |
1.36 |
% |
|||||||||||||||||||||||||||||||||
|
American Funds International Fund - Class 2 |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
1.00 |
% |
10.37 |
26.36 |
13,473,368 |
170,734,564 |
-14.00 |
% |
-13.22 |
% |
1.82 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
1.00 |
% |
11.96 |
30.65 |
11,304,100 |
172,310,088 |
30.83 |
% |
32.01 |
% |
1.31 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
1.00 |
% |
9.07 |
23.43 |
10,273,705 |
123,514,398 |
2.50 |
% |
3.43 |
% |
1.32 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
1.00 |
% |
9.14 |
22.85 |
8,917,707 |
110,505,162 |
-5.48 |
% |
-4.62 |
% |
1.59 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
1.00 |
% |
10.87 |
24.18 |
6,536,858 |
93,859,012 |
-3.62 |
% |
-2.75 |
% |
1.51 |
% |
|||||||||||||||||||||||||||||||||
|
BlackRock Global Allocation V.I. Fund - Class I |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
10.20 |
17.36 |
16,018,000 |
191,949,905 |
-8.17 |
% |
-7.43 |
% |
1.00 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
11.14 |
18.75 |
14,609,706 |
192,945,905 |
12.84 |
% |
13.74 |
% |
1.39 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
9.80 |
16.49 |
12,838,157 |
153,277,088 |
3.18 |
% |
4.01 |
% |
1.28 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
10.11 |
15.85 |
10,817,612 |
127,975,889 |
-1.60 |
% |
-0.81 |
% |
1.23 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
11.94 |
15.98 |
7,870,482 |
99,358,349 |
1.19 |
% |
2.01 |
% |
2.64 |
% |
|||||||||||||||||||||||||||||||||
|
ClearBridge Variable Mid Cap Portfolio - Class I |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
10.39 |
11.72 |
1,422,884 |
15,982,409 |
-13.30 |
% |
-12.61 |
% |
0.60 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
11.90 |
13.42 |
985,363 |
12,850,270 |
11.77 |
% |
12.69 |
% |
0.55 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
10.56 |
11.91 |
522,516 |
6,099,071 |
8.34 |
% |
9.24 |
% |
0.87 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
10.75 |
10.89 |
330,107 |
3,558,292 |
1.37 |
% |
2.15 |
% |
0.05 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
6/26/14 |
0.15 |
% |
0.90 |
% |
10.61 |
10.66 |
85,980 |
912,662 |
0.95 |
% |
4.67 |
% |
0.60 |
% |
||||||||||||||||||||||||||||||||
|
Delaware VIP® Diversified Income Series - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
10.17 |
18.37 |
5,948,099 |
68,003,570 |
-3.00 |
% |
-2.22 |
% |
3.13 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
10.58 |
18.94 |
5,406,839 |
65,217,966 |
4.28 |
% |
5.12 |
% |
2.53 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
10.08 |
19.10 |
4,261,885 |
52,057,689 |
2.60 |
% |
3.42 |
% |
2.99 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
10.02 |
18.55 |
3,833,088 |
47,192,164 |
-1.97 |
% |
-1.18 |
% |
2.98 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
10.48 |
18.84 |
3,191,545 |
43,062,799 |
4.37 |
% |
5.21 |
% |
2.18 |
% |
|||||||||||||||||||||||||||||||||
|
Delaware VIP® Emerging Markets Series - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
10.40 |
49.79 |
6,546,303 |
78,289,796 |
-16.56 |
% |
-15.89 |
% |
3.18 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
12.38 |
59.67 |
4,915,691 |
74,061,466 |
39.29 |
% |
40.41 |
% |
0.57 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
8.82 |
42.84 |
4,525,250 |
51,078,363 |
12.91 |
% |
13.82 |
% |
0.99 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
7.76 |
37.94 |
4,002,325 |
42,423,283 |
-15.27 |
% |
-14.59 |
% |
0.85 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
9.30 |
45.14 |
3,005,846 |
41,131,740 |
-8.88 |
% |
-8.15 |
% |
0.63 |
% |
|||||||||||||||||||||||||||||||||
|
Delaware VIP® High Yield Series - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
1.00 |
% |
10.03 |
29.08 |
1,216,308 |
16,423,564 |
-5.42 |
% |
-4.57 |
% |
6.17 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
1.00 |
% |
10.82 |
30.74 |
1,311,694 |
19,777,266 |
6.42 |
% |
7.38 |
% |
5.76 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
1.00 |
% |
10.09 |
28.89 |
1,357,114 |
19,916,891 |
12.03 |
% |
13.05 |
% |
6.57 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
1.00 |
% |
8.93 |
25.79 |
1,230,142 |
17,691,901 |
-7.53 |
% |
-6.69 |
% |
6.90 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
1.00 |
% |
11.88 |
27.88 |
1,168,732 |
19,744,934 |
-1.28 |
% |
-0.39 |
% |
6.92 |
% |
|||||||||||||||||||||||||||||||||
|
Delaware VIP® Limited-Term Diversified Income Series - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
10.17 |
12.91 |
5,642,703 |
59,690,568 |
-0.66 |
% |
0.15 |
% |
2.72 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
10.27 |
13.47 |
4,534,141 |
48,447,654 |
1.25 |
% |
2.07 |
% |
2.06 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
10.14 |
13.43 |
3,138,535 |
33,450,746 |
1.17 |
% |
1.99 |
% |
1.52 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
10.00 |
13.22 |
2,611,448 |
27,574,993 |
-0.12 |
% |
0.69 |
% |
1.70 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
9.98 |
13.18 |
2,211,452 |
23,581,584 |
0.78 |
% |
1.59 |
% |
1.61 |
% |
|||||||||||||||||||||||||||||||||
|
Delaware VIP® REIT Series - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
9.32 |
50.98 |
3,512,947 |
50,644,552 |
-8.05 |
% |
-7.31 |
% |
2.11 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
11.23 |
55.44 |
3,383,354 |
54,493,327 |
0.63 |
% |
1.43 |
% |
1.54 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
11.08 |
55.10 |
3,037,931 |
51,206,803 |
4.92 |
% |
5.76 |
% |
1.14 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
11.60 |
52.51 |
2,557,553 |
44,256,914 |
2.82 |
% |
3.64 |
% |
1.23 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
13.20 |
51.08 |
2,327,519 |
42,855,301 |
28.30 |
% |
29.33 |
% |
1.32 |
% |
|||||||||||||||||||||||||||||||||
M-39
Lincoln Life Flexible Premium Variable Life Account M
Notes to financial statements (continued)
3. Financial Highlights (continued)
|
Subaccount |
Year |
Commencement Date(1) |
Minimum Fee Rate(2) |
Maximum Fee Rate(2) |
Minimum Unit Value(3) |
Maximum Unit Value(3) |
Units Outstanding |
Net Assets |
Minimum Total Return(4) |
Maximum Total Return(4) |
Investment Income Ratio(5) |
||||||||||||||||||||||||||||||||||||
|
Delaware VIP® Small Cap Value Series - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
$ |
9.04 |
$ |
51.04 |
4,256,007 |
$ |
66,328,856 |
-17.46 |
% |
-16.80 |
% |
0.84 |
% |
||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
13.44 |
61.83 |
3,588,361 |
73,592,347 |
11.05 |
% |
11.94 |
% |
0.83 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
12.01 |
55.68 |
3,235,143 |
64,478,321 |
30.23 |
% |
31.27 |
% |
0.88 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
1.00 |
% |
9.60 |
42.76 |
3,099,508 |
50,688,724 |
-7.15 |
% |
-6.31 |
% |
0.71 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
1.00 |
% |
14.40 |
46.01 |
2,641,599 |
53,090,851 |
4.81 |
% |
5.76 |
% |
0.54 |
% |
|||||||||||||||||||||||||||||||||
|
Delaware VIP® Smid Cap Core Series - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
1.00 |
% |
9.96 |
46.80 |
3,361,222 |
55,888,358 |
-12.99 |
% |
-12.21 |
% |
0.17 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
1.00 |
% |
12.75 |
53.44 |
2,751,030 |
56,690,538 |
17.47 |
% |
18.53 |
% |
0.29 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
1.00 |
% |
10.78 |
45.20 |
2,295,043 |
43,872,895 |
7.22 |
% |
8.19 |
% |
0.21 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
1.00 |
% |
11.60 |
41.89 |
1,950,621 |
39,170,046 |
6.47 |
% |
7.43 |
% |
0.37 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
1.00 |
% |
14.17 |
39.09 |
1,677,683 |
34,991,225 |
2.12 |
% |
3.05 |
% |
0.07 |
% |
|||||||||||||||||||||||||||||||||
|
Delaware VIP® U.S. Growth Series - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
11.74 |
39.54 |
1,435,601 |
27,294,598 |
-3.87 |
% |
-3.10 |
% |
0.00 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
12.17 |
40.90 |
1,442,528 |
29,003,038 |
27.13 |
% |
28.15 |
% |
0.00 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
9.50 |
32.00 |
1,474,284 |
23,616,731 |
-6.01 |
% |
-5.26 |
% |
0.60 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
11.82 |
33.86 |
1,253,641 |
22,166,112 |
4.44 |
% |
5.28 |
% |
0.54 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
15.24 |
32.24 |
900,788 |
15,883,188 |
11.77 |
% |
12.67 |
% |
0.20 |
% |
|||||||||||||||||||||||||||||||||
|
Delaware VIP® Value Series - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
10.83 |
34.80 |
3,516,817 |
61,195,667 |
-3.60 |
% |
-2.83 |
% |
1.63 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
12.57 |
35.90 |
3,296,413 |
61,597,728 |
12.78 |
% |
13.68 |
% |
1.67 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
11.07 |
31.66 |
3,077,982 |
53,318,964 |
13.62 |
% |
14.53 |
% |
1.72 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
10.88 |
27.71 |
2,635,438 |
42,976,167 |
-1.31 |
% |
-0.51 |
% |
1.64 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
14.82 |
27.92 |
1,941,037 |
36,435,135 |
12.97 |
% |
13.88 |
% |
1.61 |
% |
|||||||||||||||||||||||||||||||||
|
DWS Alternative Asset Allocation VIP Portfolio - Class A |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
9.43 |
13.88 |
1,357,501 |
13,828,335 |
-9.95 |
% |
-9.23 |
% |
2.15 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
10.40 |
15.29 |
1,276,419 |
14,472,510 |
6.44 |
% |
7.30 |
% |
2.35 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
9.70 |
14.25 |
1,261,529 |
13,672,891 |
4.34 |
% |
5.19 |
% |
2.04 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
9.47 |
13.54 |
1,114,483 |
11,658,619 |
-7.13 |
% |
-6.39 |
% |
3.00 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
10.61 |
14.47 |
869,841 |
10,210,134 |
2.57 |
% |
3.40 |
% |
1.77 |
% |
|||||||||||||||||||||||||||||||||
|
DWS Equity 500 Index VIP Portfolio - Class A |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.20 |
% |
0.90 |
% |
12.63 |
34.02 |
1,803,008 |
40,025,649 |
-5.51 |
% |
-4.84 |
% |
1.68 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.20 |
% |
0.90 |
% |
13.27 |
35.81 |
1,971,921 |
46,641,587 |
20.45 |
% |
21.29 |
% |
1.75 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.20 |
% |
0.90 |
% |
10.94 |
29.57 |
2,079,174 |
41,477,903 |
10.61 |
% |
11.39 |
% |
1.90 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.20 |
% |
0.90 |
% |
11.07 |
26.58 |
2,192,981 |
41,249,244 |
0.22 |
% |
0.93 |
% |
1.64 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.20 |
% |
0.90 |
% |
15.69 |
26.38 |
2,185,602 |
44,421,974 |
12.38 |
% |
12.99 |
% |
1.86 |
% |
|||||||||||||||||||||||||||||||||
|
DWS Small Cap Index VIP Portfolio - Class A |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.20 |
% |
0.90 |
% |
11.30 |
33.43 |
497,756 |
9,293,371 |
-12.03 |
% |
-11.41 |
% |
0.95 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.20 |
% |
0.90 |
% |
12.76 |
38.00 |
536,805 |
11,673,122 |
13.30 |
% |
14.10 |
% |
0.95 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.20 |
% |
0.90 |
% |
11.18 |
33.53 |
549,713 |
10,955,142 |
19.94 |
% |
20.79 |
% |
1.01 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.20 |
% |
0.90 |
% |
10.19 |
27.96 |
554,862 |
9,776,984 |
-5.45 |
% |
-4.79 |
% |
1.03 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.20 |
% |
0.90 |
% |
15.60 |
29.57 |
544,841 |
11,279,050 |
3.80 |
% |
4.38 |
% |
0.96 |
% |
|||||||||||||||||||||||||||||||||
|
Fidelity® VIP Asset Manager Portfolio - Initial Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.55 |
% |
0.55 |
% |
19.40 |
19.40 |
28,030 |
543,774 |
-5.87 |
% |
-5.87 |
% |
1.63 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.55 |
% |
0.55 |
% |
20.61 |
20.61 |
30,235 |
623,114 |
13.48 |
% |
13.48 |
% |
1.88 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.55 |
% |
0.55 |
% |
18.16 |
18.16 |
31,718 |
576,034 |
2.51 |
% |
2.51 |
% |
1.33 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.55 |
% |
0.55 |
% |
17.72 |
17.72 |
37,733 |
668,525 |
-0.41 |
% |
-0.41 |
% |
1.56 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.55 |
% |
0.55 |
% |
17.79 |
17.79 |
39,399 |
700,893 |
5.25 |
% |
5.25 |
% |
1.46 |
% |
|||||||||||||||||||||||||||||||||
|
Fidelity® VIP Contrafund® Portfolio - Service Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
10.74 |
33.36 |
10,934,915 |
177,076,913 |
-7.32 |
% |
-6.58 |
% |
0.62 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
12.64 |
35.80 |
9,885,038 |
178,604,967 |
20.67 |
% |
21.64 |
% |
0.93 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
10.40 |
29.50 |
8,137,498 |
131,831,325 |
6.95 |
% |
7.80 |
% |
0.71 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
10.97 |
27.43 |
6,987,656 |
114,483,145 |
-0.34 |
% |
0.46 |
% |
0.99 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
14.72 |
27.69 |
5,747,873 |
106,484,014 |
10.81 |
% |
11.70 |
% |
0.93 |
% |
|||||||||||||||||||||||||||||||||
|
Fidelity® VIP Equity-Income Portfolio - Initial Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.55 |
% |
0.55 |
% |
26.40 |
26.40 |
62,494 |
1,649,586 |
-8.80 |
% |
-8.80 |
% |
2.20 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.55 |
% |
0.55 |
% |
28.94 |
28.94 |
71,613 |
2,072,602 |
12.27 |
% |
12.27 |
% |
1.70 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.55 |
% |
0.55 |
% |
25.78 |
25.78 |
79,526 |
2,049,982 |
17.37 |
% |
17.37 |
% |
2.11 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.55 |
% |
0.55 |
% |
21.96 |
21.96 |
87,054 |
1,911,926 |
-4.49 |
% |
-4.49 |
% |
3.07 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.55 |
% |
0.55 |
% |
23.00 |
23.00 |
96,339 |
2,215,341 |
8.12 |
% |
8.12 |
% |
2.69 |
% |
|||||||||||||||||||||||||||||||||
M-40
Lincoln Life Flexible Premium Variable Life Account M
Notes to financial statements (continued)
3. Financial Highlights (continued)
|
Subaccount |
Year |
Commencement Date(1) |
Minimum Fee Rate(2) |
Maximum Fee Rate(2) |
Minimum Unit Value(3) |
Maximum Unit Value(3) |
Units Outstanding |
Net Assets |
Minimum Total Return(4) |
Maximum Total Return(4) |
Investment Income Ratio(5) |
||||||||||||||||||||||||||||||||||||
|
Fidelity® VIP Equity-Income Portfolio - Service Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.20 |
% |
0.90 |
% |
$ |
12.13 |
$ |
22.61 |
278,515 |
$ |
5,173,212 |
-9.22 |
% |
-8.58 |
% |
2.15 |
% |
||||||||||||||||||||||||||||||
|
2017 |
0.20 |
% |
0.90 |
% |
13.27 |
24.91 |
314,891 |
6,368,009 |
11.79 |
% |
12.58 |
% |
1.58 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.20 |
% |
0.90 |
% |
11.79 |
22.28 |
346,349 |
6,203,382 |
16.85 |
% |
17.67 |
% |
2.07 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.20 |
% |
0.90 |
% |
10.02 |
19.07 |
371,143 |
5,641,373 |
-4.95 |
% |
-4.28 |
% |
2.98 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.20 |
% |
0.90 |
% |
15.02 |
20.28 |
407,591 |
6,936,144 |
7.67 |
% |
8.27 |
% |
2.73 |
% |
|||||||||||||||||||||||||||||||||
|
Fidelity® VIP Growth Opportunities Portfolio - Service Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.20 |
% |
0.90 |
% |
24.28 |
53.42 |
81,034 |
3,480,213 |
11.34 |
% |
11.95 |
% |
0.11 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.35 |
% |
0.90 |
% |
21.81 |
47.72 |
88,150 |
3,370,921 |
33.20 |
% |
33.93 |
% |
0.20 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.35 |
% |
0.90 |
% |
16.37 |
35.63 |
92,573 |
2,686,871 |
-0.65 |
% |
-0.10 |
% |
0.21 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.35 |
% |
0.90 |
% |
16.48 |
35.67 |
102,196 |
2,912,087 |
4.54 |
% |
5.11 |
% |
0.06 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.35 |
% |
0.90 |
% |
15.76 |
33.93 |
123,758 |
3,420,124 |
11.10 |
% |
11.71 |
% |
0.11 |
% |
|||||||||||||||||||||||||||||||||
|
Fidelity® VIP Growth Portfolio - Service Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
12.39 |
39.99 |
2,337,292 |
41,783,109 |
-1.17 |
% |
-0.38 |
% |
0.15 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
13.84 |
40.24 |
1,853,706 |
36,040,561 |
33.79 |
% |
34.87 |
% |
0.12 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
10.28 |
29.91 |
1,559,524 |
23,916,861 |
-0.19 |
% |
0.61 |
% |
0.00 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
11.37 |
29.80 |
1,283,933 |
21,214,286 |
6.09 |
% |
6.95 |
% |
0.17 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
12.29 |
27.94 |
945,587 |
16,141,779 |
10.19 |
% |
11.08 |
% |
0.11 |
% |
|||||||||||||||||||||||||||||||||
|
Fidelity® VIP High Income Portfolio - Service Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.35 |
% |
0.90 |
% |
15.32 |
22.48 |
85,546 |
1,641,237 |
-4.46 |
% |
-3.94 |
% |
5.55 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.35 |
% |
0.90 |
% |
15.95 |
23.40 |
85,795 |
1,718,077 |
6.11 |
% |
6.70 |
% |
5.31 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.35 |
% |
0.90 |
% |
14.95 |
21.93 |
85,940 |
1,611,420 |
13.35 |
% |
13.97 |
% |
4.81 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.35 |
% |
0.90 |
% |
13.11 |
19.24 |
89,564 |
1,477,402 |
-4.62 |
% |
-4.09 |
% |
6.21 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.35 |
% |
0.90 |
% |
13.67 |
20.06 |
95,999 |
1,661,378 |
0.17 |
% |
0.72 |
% |
5.68 |
% |
|||||||||||||||||||||||||||||||||
|
Fidelity® VIP Investment Grade Bond Portfolio - Initial Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.55 |
% |
0.55 |
% |
14.31 |
14.31 |
63,554 |
909,422 |
-1.08 |
% |
-1.08 |
% |
2.31 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.55 |
% |
0.55 |
% |
14.47 |
14.47 |
74,280 |
1,074,477 |
3.64 |
% |
3.64 |
% |
2.41 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.55 |
% |
0.55 |
% |
13.96 |
13.96 |
75,044 |
1,047,349 |
4.17 |
% |
4.17 |
% |
2.13 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.55 |
% |
0.55 |
% |
13.40 |
13.40 |
80,283 |
1,075,646 |
-1.14 |
% |
-1.14 |
% |
2.49 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.55 |
% |
0.55 |
% |
13.55 |
13.55 |
89,859 |
1,217,830 |
5.25 |
% |
5.25 |
% |
2.14 |
% |
|||||||||||||||||||||||||||||||||
|
Fidelity® VIP Mid Cap Portfolio - Service Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
9.76 |
25.83 |
5,148,888 |
71,663,805 |
-15.40 |
% |
-14.72 |
% |
0.57 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
12.56 |
32.11 |
4,556,712 |
77,563,466 |
19.62 |
% |
20.58 |
% |
0.66 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
10.43 |
26.74 |
3,728,133 |
56,446,576 |
11.11 |
% |
12.00 |
% |
0.42 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
10.61 |
23.97 |
3,150,320 |
46,204,816 |
-2.38 |
% |
-1.60 |
% |
0.43 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
14.79 |
24.49 |
2,046,748 |
36,365,274 |
5.24 |
% |
6.09 |
% |
0.18 |
% |
|||||||||||||||||||||||||||||||||
|
Fidelity® VIP Overseas Portfolio - Service Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
9.72 |
19.74 |
462,338 |
5,793,865 |
-15.65 |
% |
-14.97 |
% |
1.49 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
11.44 |
23.40 |
461,523 |
7,060,344 |
28.94 |
% |
29.97 |
% |
1.34 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
8.81 |
18.15 |
464,842 |
5,709,533 |
-5.97 |
% |
-5.22 |
% |
1.26 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
9.77 |
19.30 |
468,025 |
6,502,646 |
2.56 |
% |
3.39 |
% |
1.28 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
9.63 |
18.82 |
464,026 |
6,786,528 |
-8.98 |
% |
-8.25 |
% |
1.32 |
% |
|||||||||||||||||||||||||||||||||
|
Franklin Income VIP Fund - Class 1 |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
10.26 |
19.22 |
6,200,452 |
78,605,217 |
-4.96 |
% |
-4.19 |
% |
4.86 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
11.38 |
20.07 |
5,759,766 |
78,550,647 |
8.96 |
% |
9.83 |
% |
4.16 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
10.36 |
18.28 |
4,693,244 |
60,965,041 |
13.31 |
% |
14.22 |
% |
4.64 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
9.60 |
16.01 |
4,050,890 |
47,720,750 |
-7.67 |
% |
-6.93 |
% |
4.77 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
12.23 |
17.21 |
2,873,517 |
38,884,441 |
3.98 |
% |
4.82 |
% |
4.95 |
% |
|||||||||||||||||||||||||||||||||
|
Franklin Mutual Shares VIP Fund - Class 1 |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
9.55 |
20.51 |
3,320,248 |
48,058,842 |
-9.67 |
% |
-8.95 |
% |
2.70 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
11.47 |
22.53 |
3,038,881 |
49,819,581 |
7.66 |
% |
8.53 |
% |
2.52 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
10.58 |
20.77 |
2,599,392 |
41,017,546 |
15.31 |
% |
16.24 |
% |
2.12 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
10.36 |
17.88 |
2,311,014 |
32,607,707 |
-5.55 |
% |
-4.79 |
% |
3.45 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
12.66 |
18.79 |
1,879,457 |
28,721,822 |
6.42 |
% |
7.27 |
% |
2.35 |
% |
|||||||||||||||||||||||||||||||||
|
Franklin Small-Mid Cap Growth VIP Fund - Class 1 |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
10.80 |
35.15 |
728,980 |
12,475,396 |
-6.00 |
% |
-5.25 |
% |
0.00 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
11.51 |
37.19 |
765,005 |
14,628,179 |
20.66 |
% |
21.62 |
% |
0.00 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
9.48 |
30.66 |
736,704 |
12,249,103 |
3.47 |
% |
4.30 |
% |
0.00 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
1.00 |
% |
10.52 |
29.47 |
725,305 |
12,559,923 |
-3.42 |
% |
-2.54 |
% |
0.00 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
1.00 |
% |
14.71 |
30.31 |
722,860 |
13,768,375 |
6.71 |
% |
7.67 |
% |
0.00 |
% |
|||||||||||||||||||||||||||||||||
M-41
Lincoln Life Flexible Premium Variable Life Account M
Notes to financial statements (continued)
3. Financial Highlights (continued)
|
Subaccount |
Year |
Commencement Date(1) |
Minimum Fee Rate(2) |
Maximum Fee Rate(2) |
Minimum Unit Value(3) |
Maximum Unit Value(3) |
Units Outstanding |
Net Assets |
Minimum Total Return(4) |
Maximum Total Return(4) |
Investment Income Ratio(5) |
||||||||||||||||||||||||||||||||||||
|
Invesco V.I. American Franchise Fund - Series I Shares |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.20 |
% |
1.00 |
% |
$ |
11.90 |
$ |
29.12 |
481,592 |
$ |
10,420,588 |
-4.59 |
% |
-3.96 |
% |
0.00 |
% |
||||||||||||||||||||||||||||||
|
2017 |
0.35 |
% |
1.00 |
% |
12.46 |
30.33 |
518,985 |
11,715,569 |
26.08 |
% |
26.90 |
% |
0.08 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.35 |
% |
1.00 |
% |
9.87 |
23.90 |
596,631 |
10,444,955 |
1.25 |
% |
1.91 |
% |
0.00 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.35 |
% |
1.00 |
% |
9.74 |
23.45 |
679,941 |
11,520,736 |
3.96 |
% |
4.64 |
% |
0.00 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.35 |
% |
1.00 |
% |
9.36 |
22.41 |
735,141 |
11,999,408 |
7.36 |
% |
8.06 |
% |
0.04 |
% |
|||||||||||||||||||||||||||||||||
|
Invesco V.I. Core Equity Fund - Series I Shares |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.20 |
% |
0.90 |
% |
15.34 |
24.20 |
626,273 |
12,491,090 |
-10.21 |
% |
-9.71 |
% |
0.89 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.35 |
% |
0.90 |
% |
16.99 |
26.81 |
664,935 |
14,837,315 |
12.16 |
% |
12.78 |
% |
1.03 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.35 |
% |
0.90 |
% |
15.07 |
23.77 |
721,661 |
14,213,747 |
9.28 |
% |
9.88 |
% |
0.70 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.35 |
% |
0.90 |
% |
13.71 |
21.63 |
794,112 |
14,238,813 |
-6.61 |
% |
-6.10 |
% |
1.12 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.35 |
% |
0.90 |
% |
14.60 |
23.04 |
859,196 |
16,429,355 |
7.18 |
% |
7.77 |
% |
0.84 |
% |
|||||||||||||||||||||||||||||||||
|
Invesco V.I. Core Plus Bond Fund - Series I Shares |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.55 |
% |
0.55 |
% |
16.61 |
16.61 |
57,267 |
951,073 |
-2.90 |
% |
-2.90 |
% |
3.23 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.55 |
% |
0.55 |
% |
17.10 |
17.10 |
36,722 |
628,087 |
5.76 |
% |
5.76 |
% |
3.41 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.55 |
% |
0.55 |
% |
16.17 |
16.17 |
36,647 |
592,668 |
6.07 |
% |
6.07 |
% |
3.72 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.55 |
% |
0.55 |
% |
15.25 |
15.25 |
40,163 |
612,341 |
-0.92 |
% |
-0.92 |
% |
4.61 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.55 |
% |
0.55 |
% |
15.39 |
15.39 |
40,893 |
629,241 |
7.43 |
% |
7.43 |
% |
5.11 |
% |
|||||||||||||||||||||||||||||||||
|
Invesco V.I. International Growth Fund - Series I Shares |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
9.36 |
23.41 |
2,142,830 |
22,500,087 |
-15.74 |
% |
-15.06 |
% |
2.15 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
11.02 |
27.78 |
1,851,655 |
23,409,844 |
21.90 |
% |
22.88 |
% |
1.51 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
8.98 |
22.79 |
1,477,707 |
16,185,923 |
-1.34 |
% |
-0.55 |
% |
1.36 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
9.36 |
23.10 |
932,955 |
11,234,187 |
-3.22 |
% |
-2.44 |
% |
1.59 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
12.72 |
23.87 |
481,302 |
7,258,541 |
-0.57 |
% |
-0.02 |
% |
1.62 |
% |
|||||||||||||||||||||||||||||||||
|
Janus Henderson Balanced Portfolio - Institutional Shares |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.20 |
% |
0.90 |
% |
19.74 |
30.84 |
314,783 |
8,485,275 |
-0.22 |
% |
0.33 |
% |
2.15 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.35 |
% |
0.90 |
% |
19.67 |
30.91 |
339,964 |
9,258,569 |
17.37 |
% |
18.02 |
% |
1.58 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.35 |
% |
0.90 |
% |
16.67 |
26.34 |
379,735 |
8,772,068 |
3.67 |
% |
4.24 |
% |
2.02 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.35 |
% |
0.90 |
% |
15.99 |
25.41 |
421,246 |
9,365,077 |
-0.28 |
% |
0.27 |
% |
1.58 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.35 |
% |
0.90 |
% |
15.95 |
25.48 |
466,155 |
10,349,899 |
7.54 |
% |
8.13 |
% |
1.72 |
% |
|||||||||||||||||||||||||||||||||
|
Janus Henderson Balanced Portfolio - Service Shares |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.20 |
% |
0.90 |
% |
13.04 |
27.92 |
424,213 |
8,029,845 |
-0.47 |
% |
0.23 |
% |
1.78 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.20 |
% |
0.90 |
% |
13.01 |
28.05 |
454,449 |
8,675,892 |
17.08 |
% |
17.90 |
% |
1.40 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.20 |
% |
0.90 |
% |
11.03 |
23.96 |
456,700 |
7,472,045 |
3.39 |
% |
4.12 |
% |
1.76 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.20 |
% |
0.90 |
% |
10.60 |
23.17 |
503,303 |
7,985,501 |
-0.49 |
% |
0.21 |
% |
1.36 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.20 |
% |
0.90 |
% |
13.48 |
23.53 |
518,113 |
8,526,062 |
7.27 |
% |
7.86 |
% |
1.51 |
% |
|||||||||||||||||||||||||||||||||
|
Janus Henderson Enterprise Portfolio - Service Shares |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.20 |
% |
0.90 |
% |
16.13 |
48.67 |
166,559 |
4,695,207 |
-1.56 |
% |
-0.84 |
% |
0.11 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.20 |
% |
0.90 |
% |
16.27 |
49.16 |
191,701 |
5,276,567 |
25.95 |
% |
26.84 |
% |
0.15 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.20 |
% |
0.90 |
% |
12.83 |
38.82 |
185,039 |
3,990,719 |
11.10 |
% |
11.88 |
% |
0.02 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.20 |
% |
0.90 |
% |
11.47 |
34.75 |
184,285 |
3,595,877 |
2.84 |
% |
3.56 |
% |
0.53 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.20 |
% |
0.90 |
% |
15.53 |
33.64 |
156,349 |
3,362,687 |
11.24 |
% |
11.85 |
% |
0.03 |
% |
|||||||||||||||||||||||||||||||||
|
Janus Henderson Global Research Portfolio - Institutional Shares |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.20 |
% |
0.90 |
% |
15.73 |
29.11 |
334,260 |
7,835,523 |
-7.70 |
% |
-7.19 |
% |
1.12 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.35 |
% |
0.90 |
% |
17.05 |
31.36 |
361,514 |
9,252,775 |
25.89 |
% |
26.58 |
% |
0.82 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.35 |
% |
0.90 |
% |
13.54 |
24.77 |
404,834 |
8,155,378 |
1.15 |
% |
1.71 |
% |
0.99 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.35 |
% |
0.90 |
% |
13.39 |
24.36 |
435,385 |
8,681,008 |
-3.16 |
% |
-2.63 |
% |
0.64 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.35 |
% |
0.90 |
% |
13.82 |
25.02 |
488,076 |
10,035,395 |
6.48 |
% |
7.07 |
% |
1.06 |
% |
|||||||||||||||||||||||||||||||||
|
Janus Henderson Global Research Portfolio - Service Shares |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.35 |
% |
0.90 |
% |
17.03 |
18.84 |
100,883 |
1,789,437 |
-7.91 |
% |
-7.41 |
% |
0.97 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.35 |
% |
0.90 |
% |
18.39 |
20.34 |
109,072 |
2,089,172 |
25.55 |
% |
26.24 |
% |
0.67 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.35 |
% |
0.90 |
% |
14.57 |
16.11 |
128,263 |
1,953,244 |
0.91 |
% |
1.46 |
% |
0.86 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.35 |
% |
0.90 |
% |
14.36 |
15.88 |
153,288 |
2,309,212 |
-3.41 |
% |
-2.87 |
% |
0.52 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.35 |
% |
0.90 |
% |
14.78 |
16.35 |
164,319 |
2,556,958 |
6.22 |
% |
6.81 |
% |
0.97 |
% |
|||||||||||||||||||||||||||||||||
|
Janus Henderson Global Technology Portfolio - Service Shares |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.35 |
% |
0.90 |
% |
14.05 |
59.21 |
93,148 |
2,645,643 |
0.01 |
% |
0.56 |
% |
0.00 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.35 |
% |
0.90 |
% |
14.05 |
58.88 |
90,981 |
2,622,767 |
43.62 |
% |
44.41 |
% |
0.00 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.35 |
% |
0.90 |
% |
9.78 |
40.78 |
76,160 |
1,537,667 |
12.83 |
% |
13.45 |
% |
0.08 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.35 |
% |
0.90 |
% |
8.67 |
35.94 |
101,709 |
1,664,620 |
3.71 |
% |
4.28 |
% |
0.00 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.35 |
% |
0.90 |
% |
8.36 |
34.46 |
102,897 |
1,624,767 |
8.37 |
% |
8.97 |
% |
0.00 |
% |
|||||||||||||||||||||||||||||||||
M-42
Lincoln Life Flexible Premium Variable Life Account M
Notes to financial statements (continued)
3. Financial Highlights (continued)
|
Subaccount |
Year |
Commencement Date(1) |
Minimum Fee Rate(2) |
Maximum Fee Rate(2) |
Minimum Unit Value(3) |
Maximum Unit Value(3) |
Units Outstanding |
Net Assets |
Minimum Total Return(4) |
Maximum Total Return(4) |
Investment Income Ratio(5) |
||||||||||||||||||||||||||||||||||||
|
JPMorgan Insurance Trust Global Allocation Portfolio - Class 1 |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
$ |
10.79 |
$ |
11.10 |
1,762,102 |
$ |
19,073,296 |
-6.91 |
% |
-6.16 |
% |
0.00 |
% |
||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
11.59 |
11.82 |
571,085 |
6,657,814 |
16.06 |
% |
16.94 |
% |
1.79 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.15 |
% |
0.90 |
% |
9.99 |
10.11 |
386,823 |
3,876,049 |
5.18 |
% |
5.97 |
% |
4.66 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
7/7/15 |
0.15 |
% |
0.90 |
% |
9.49 |
9.54 |
40,309 |
382,980 |
-5.82 |
% |
3.11 |
% |
3.57 |
% |
||||||||||||||||||||||||||||||||
|
LVIP Baron Growth Opportunities Fund - Service Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
11.50 |
47.91 |
2,017,346 |
34,875,984 |
-4.80 |
% |
-4.03 |
% |
0.00 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
12.35 |
50.33 |
1,766,497 |
33,730,267 |
26.10 |
% |
27.11 |
% |
0.00 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
9.72 |
39.91 |
1,552,326 |
25,522,295 |
4.62 |
% |
5.46 |
% |
0.49 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
10.28 |
38.15 |
1,396,857 |
22,940,593 |
-5.62 |
% |
-4.87 |
% |
0.00 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
15.33 |
40.42 |
1,055,825 |
20,430,416 |
3.92 |
% |
4.75 |
% |
0.21 |
% |
|||||||||||||||||||||||||||||||||
|
LVIP Baron Growth Opportunities Fund - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.20 |
% |
0.90 |
% |
11.95 |
29.65 |
68,821 |
1,200,762 |
-4.57 |
% |
-3.89 |
% |
0.00 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.20 |
% |
0.90 |
% |
12.44 |
31.07 |
67,774 |
1,266,992 |
26.42 |
% |
27.35 |
% |
0.00 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.20 |
% |
0.90 |
% |
9.77 |
25.75 |
75,297 |
1,142,148 |
4.88 |
% |
5.65 |
% |
0.66 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.20 |
% |
0.90 |
% |
10.48 |
24.45 |
90,195 |
1,385,268 |
-5.39 |
% |
-4.72 |
% |
0.00 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.20 |
% |
0.90 |
% |
16.15 |
25.74 |
67,246 |
1,348,301 |
4.18 |
% |
4.75 |
% |
0.39 |
% |
|||||||||||||||||||||||||||||||||
|
LVIP BlackRock Dividend Value Managed Volatility Fund - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
10.42 |
24.34 |
2,914,917 |
37,380,872 |
-8.74 |
% |
-8.00 |
% |
2.22 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
12.31 |
26.52 |
2,964,341 |
41,650,533 |
15.38 |
% |
16.31 |
% |
1.88 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
10.59 |
22.86 |
3,224,512 |
39,620,282 |
10.96 |
% |
11.85 |
% |
1.88 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
10.07 |
20.49 |
2,746,244 |
30,871,078 |
-5.72 |
% |
-4.96 |
% |
2.00 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
11.20 |
21.61 |
1,409,023 |
18,348,002 |
2.56 |
% |
3.39 |
% |
1.76 |
% |
|||||||||||||||||||||||||||||||||
|
LVIP BlackRock Emerging Markets Managed Volatility Fund - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2016 |
0.00 |
% |
0.00 |
% |
— |
— |
— |
— |
0.00 |
% |
0.00 |
% |
3.89 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
7.43 |
8.60 |
1,013,569 |
7,857,815 |
-15.77 |
% |
-15.10 |
% |
1.96 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
8.86 |
8.93 |
429,029 |
3,858,326 |
-5.47 |
% |
-5.03 |
% |
1.63 |
% |
|||||||||||||||||||||||||||||||||
|
LVIP BlackRock Global Growth ETF Allocation Managed Risk Fund - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.15 |
% |
0.90 |
% |
10.75 |
11.34 |
1,534,454 |
17,066,798 |
-3.88 |
% |
-3.15 |
% |
2.29 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.15 |
% |
0.90 |
% |
11.56 |
11.71 |
684,857 |
7,920,789 |
13.33 |
% |
14.18 |
% |
3.42 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
5/20/16 |
0.15 |
% |
0.90 |
% |
10.20 |
10.25 |
129,243 |
1,318,727 |
-0.21 |
% |
2.65 |
% |
4.02 |
% |
||||||||||||||||||||||||||||||||
|
LVIP BlackRock Inflation Protected Bond Fund - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
9.66 |
11.78 |
3,067,594 |
31,362,287 |
-0.64 |
% |
0.17 |
% |
5.41 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
9.69 |
11.76 |
2,649,013 |
27,285,208 |
1.27 |
% |
2.08 |
% |
1.74 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
9.54 |
11.52 |
1,931,359 |
19,654,849 |
2.64 |
% |
3.47 |
% |
1.29 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
9.26 |
11.14 |
1,588,294 |
15,760,994 |
-3.70 |
% |
-2.92 |
% |
1.25 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
9.59 |
11.47 |
1,261,371 |
13,093,600 |
2.14 |
% |
2.96 |
% |
1.58 |
% |
|||||||||||||||||||||||||||||||||
|
LVIP BlackRock U.S. Growth ETF Allocation Managed Risk Fund - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.15 |
% |
0.90 |
% |
11.37 |
11.60 |
373,349 |
4,252,378 |
-3.61 |
% |
-2.88 |
% |
1.89 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.15 |
% |
0.90 |
% |
11.80 |
11.95 |
216,440 |
2,557,126 |
12.47 |
% |
13.32 |
% |
2.00 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
5/20/16 |
0.15 |
% |
0.90 |
% |
10.49 |
10.54 |
58,410 |
612,825 |
1.69 |
% |
5.51 |
% |
1.64 |
% |
||||||||||||||||||||||||||||||||
|
LVIP BlackRock U.S. Opportunities Managed Volatility Fund - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2016 |
0.00 |
% |
0.00 |
% |
— |
— |
— |
— |
0.00 |
% |
0.00 |
% |
0.72 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
8/5/15 |
0.15 |
% |
0.90 |
% |
8.99 |
9.03 |
20,798 |
186,980 |
-9.54 |
% |
-0.11 |
% |
0.60 |
% |
||||||||||||||||||||||||||||||||
|
LVIP Blended Large Cap Growth Managed Volatility Fund - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
11.28 |
28.11 |
468,469 |
7,922,610 |
-5.17 |
% |
-4.41 |
% |
0.71 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
12.31 |
29.48 |
464,917 |
8,464,349 |
25.00 |
% |
26.01 |
% |
0.64 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
9.78 |
23.45 |
480,678 |
7,253,704 |
-2.20 |
% |
-1.41 |
% |
0.44 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
10.52 |
23.85 |
458,834 |
7,375,932 |
0.43 |
% |
1.24 |
% |
0.00 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
13.05 |
23.62 |
554,946 |
9,352,418 |
4.41 |
% |
5.24 |
% |
0.00 |
% |
|||||||||||||||||||||||||||||||||
|
LVIP Blended Mid Cap Managed Volatility Fund - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
10.83 |
19.96 |
626,239 |
8,114,271 |
-0.56 |
% |
0.26 |
% |
0.00 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
10.89 |
19.92 |
641,649 |
8,396,003 |
24.44 |
% |
25.43 |
% |
0.00 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
8.75 |
15.89 |
669,213 |
7,047,390 |
1.34 |
% |
2.16 |
% |
0.00 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
8.64 |
15.56 |
579,644 |
6,192,811 |
-5.06 |
% |
-4.30 |
% |
0.00 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
11.07 |
16.26 |
491,623 |
5,762,778 |
-8.14 |
% |
-7.40 |
% |
0.00 |
% |
|||||||||||||||||||||||||||||||||
M-43
Lincoln Life Flexible Premium Variable Life Account M
Notes to financial statements (continued)
3. Financial Highlights (continued)
|
Subaccount |
Year |
Commencement Date(1) |
Minimum Fee Rate(2) |
Maximum Fee Rate(2) |
Minimum Unit Value(3) |
Maximum Unit Value(3) |
Units Outstanding |
Net Assets |
Minimum Total Return(4) |
Maximum Total Return(4) |
Investment Income Ratio(5) |
||||||||||||||||||||||||||||||||||||
|
LVIP Clarion Global Real Estate Fund - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
$ |
9.61 |
$ |
17.67 |
1,885,814 |
$ |
22,541,058 |
-9.16 |
% |
-8.43 |
% |
3.87 |
% |
||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
10.58 |
19.31 |
1,761,820 |
23,073,042 |
9.87 |
% |
10.75 |
% |
4.61 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
9.63 |
17.44 |
1,571,668 |
18,644,346 |
0.28 |
% |
1.08 |
% |
4.12 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
9.60 |
17.27 |
1,293,390 |
15,331,533 |
-2.11 |
% |
-1.32 |
% |
3.16 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
9.81 |
17.51 |
1,171,019 |
14,129,192 |
12.87 |
% |
13.78 |
% |
2.94 |
% |
|||||||||||||||||||||||||||||||||
|
LVIP ClearBridge Large Cap Managed Volatility Fund - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.15 |
% |
0.90 |
% |
10.52 |
10.81 |
99,292 |
1,047,740 |
-6.39 |
% |
-5.68 |
% |
1.04 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.15 |
% |
0.90 |
% |
11.23 |
11.46 |
101,945 |
1,148,336 |
16.98 |
% |
17.86 |
% |
1.09 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.15 |
% |
0.90 |
% |
9.60 |
9.72 |
85,557 |
822,256 |
2.85 |
% |
3.63 |
% |
1.20 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
6/29/15 |
0.15 |
% |
0.90 |
% |
9.34 |
9.38 |
38,579 |
360,395 |
-7.12 |
% |
0.16 |
% |
1.92 |
% |
||||||||||||||||||||||||||||||||
|
LVIP Delaware Bond Fund - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
10.26 |
22.85 |
12,949,764 |
153,286,719 |
-1.72 |
% |
-0.93 |
% |
3.32 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
10.63 |
23.25 |
11,669,804 |
143,147,977 |
3.44 |
% |
4.27 |
% |
3.02 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
10.21 |
22.47 |
10,230,826 |
123,172,536 |
1.80 |
% |
2.62 |
% |
2.57 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
10.28 |
22.08 |
9,404,253 |
113,893,044 |
-0.51 |
% |
0.29 |
% |
2.49 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
10.42 |
22.19 |
7,889,337 |
101,292,592 |
5.03 |
% |
5.87 |
% |
2.13 |
% |
|||||||||||||||||||||||||||||||||
|
LVIP Delaware Diversified Floating Rate Fund - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
10.02 |
11.08 |
2,463,061 |
25,338,826 |
-0.65 |
% |
0.17 |
% |
3.95 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
10.09 |
11.06 |
2,151,373 |
22,295,069 |
1.62 |
% |
2.44 |
% |
1.16 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
9.93 |
10.80 |
1,568,004 |
15,973,683 |
1.33 |
% |
2.15 |
% |
0.00 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
9.80 |
10.57 |
1,342,754 |
13,509,540 |
-1.60 |
% |
-0.81 |
% |
1.61 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
10.12 |
10.66 |
1,232,257 |
12,607,589 |
-0.29 |
% |
0.52 |
% |
1.65 |
% |
|||||||||||||||||||||||||||||||||
|
LVIP Delaware Social Awareness Fund - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
11.67 |
32.14 |
385,147 |
6,845,718 |
-5.43 |
% |
-4.65 |
% |
1.39 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
12.26 |
33.79 |
352,683 |
6,931,545 |
19.12 |
% |
20.07 |
% |
1.29 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
10.23 |
28.21 |
381,280 |
6,522,336 |
5.68 |
% |
6.53 |
% |
1.46 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
10.98 |
26.55 |
342,168 |
6,098,818 |
-1.55 |
% |
-0.76 |
% |
1.49 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
15.64 |
26.82 |
319,793 |
6,056,599 |
14.17 |
% |
15.09 |
% |
1.67 |
% |
|||||||||||||||||||||||||||||||||
|
LVIP Delaware Special Opportunities Fund - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
9.52 |
26.78 |
859,368 |
12,910,655 |
-15.52 |
% |
-14.84 |
% |
1.44 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
13.45 |
31.46 |
711,368 |
13,197,525 |
16.70 |
% |
17.64 |
% |
1.42 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
11.46 |
26.76 |
599,662 |
10,086,430 |
19.33 |
% |
20.29 |
% |
1.74 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
10.96 |
22.26 |
470,557 |
6,918,385 |
-0.64 |
% |
0.16 |
% |
1.27 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
14.63 |
22.23 |
430,119 |
6,699,585 |
6.67 |
% |
7.52 |
% |
1.37 |
% |
|||||||||||||||||||||||||||||||||
|
LVIP Delaware Wealth Builder Fund - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
10.28 |
23.75 |
192,661 |
2,565,769 |
-6.07 |
% |
-5.31 |
% |
2.92 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
11.57 |
25.14 |
206,122 |
3,055,850 |
11.28 |
% |
12.18 |
% |
2.20 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
10.33 |
22.47 |
216,110 |
3,001,439 |
4.67 |
% |
5.51 |
% |
1.57 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
10.56 |
21.35 |
187,523 |
2,963,110 |
-2.22 |
% |
-1.43 |
% |
1.71 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
13.18 |
21.71 |
193,574 |
3,183,760 |
3.41 |
% |
4.24 |
% |
2.18 |
% |
|||||||||||||||||||||||||||||||||
|
LVIP Dimensional International Core Equity Fund - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
9.54 |
9.93 |
1,807,794 |
17,323,844 |
-18.29 |
% |
-17.64 |
% |
2.25 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
11.67 |
11.90 |
1,006,542 |
11,806,540 |
26.22 |
% |
27.17 |
% |
2.82 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.15 |
% |
0.90 |
% |
9.25 |
9.36 |
466,735 |
4,320,917 |
3.57 |
% |
4.35 |
% |
3.62 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
6/11/15 |
0.15 |
% |
0.90 |
% |
8.93 |
8.97 |
36,173 |
323,392 |
-10.07 |
% |
5.99 |
% |
2.12 |
% |
||||||||||||||||||||||||||||||||
|
LVIP Dimensional International Equity Managed Volatility Fund - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
9.36 |
11.90 |
1,047,110 |
10,989,012 |
-16.84 |
% |
-16.17 |
% |
1.93 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
11.18 |
14.23 |
962,805 |
12,127,978 |
25.03 |
% |
26.03 |
% |
2.24 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
8.88 |
11.32 |
1,007,564 |
10,120,850 |
1.06 |
% |
1.87 |
% |
2.19 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
8.99 |
11.14 |
963,886 |
9,566,345 |
-4.83 |
% |
-4.07 |
% |
1.08 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
10.28 |
11.64 |
584,808 |
6,384,907 |
-8.31 |
% |
-7.59 |
% |
2.62 |
% |
|||||||||||||||||||||||||||||||||
|
LVIP Dimensional U.S. Core Equity 1 Fund - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
10.74 |
26.95 |
1,464,677 |
19,090,360 |
-8.14 |
% |
-7.39 |
% |
1.86 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
13.12 |
29.11 |
992,461 |
15,019,963 |
19.79 |
% |
20.76 |
% |
1.71 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
11.29 |
24.12 |
661,673 |
9,076,712 |
13.38 |
% |
14.29 |
% |
3.43 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
11.55 |
21.11 |
180,829 |
3,143,938 |
-2.88 |
% |
-2.10 |
% |
1.49 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
14.77 |
21.58 |
187,609 |
3,460,327 |
12.16 |
% |
13.06 |
% |
1.98 |
% |
|||||||||||||||||||||||||||||||||
M-44
Lincoln Life Flexible Premium Variable Life Account M
Notes to financial statements (continued)
3. Financial Highlights (continued)
|
Subaccount |
Year |
Commencement Date(1) |
Minimum Fee Rate(2) |
Maximum Fee Rate(2) |
Minimum Unit Value(3) |
Maximum Unit Value(3) |
Units Outstanding |
Net Assets |
Minimum Total Return(4) |
Maximum Total Return(4) |
Investment Income Ratio(5) |
||||||||||||||||||||||||||||||||||||
|
LVIP Dimensional U.S. Core Equity 2 Fund - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
$ |
11.34 |
$ |
11.67 |
1,984,912 |
$ |
22,612,984 |
-10.45 |
% |
-9.73 |
% |
1.31 |
% |
||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
12.66 |
12.91 |
1,207,325 |
15,356,035 |
17.22 |
% |
18.13 |
% |
1.58 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.15 |
% |
0.90 |
% |
10.80 |
10.93 |
627,366 |
6,781,380 |
15.71 |
% |
16.58 |
% |
1.88 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
5/21/15 |
0.15 |
% |
0.90 |
% |
9.33 |
9.38 |
57,524 |
537,556 |
-8.36 |
% |
0.31 |
% |
1.87 |
% |
||||||||||||||||||||||||||||||||
|
LVIP Dimensional U.S. Equity Managed Volatility Fund - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
11.12 |
16.82 |
830,252 |
11,972,240 |
-8.62 |
% |
-7.88 |
% |
0.96 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
12.09 |
18.26 |
902,552 |
14,123,058 |
18.10 |
% |
19.05 |
% |
1.17 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
10.26 |
15.34 |
898,963 |
11,912,273 |
10.14 |
% |
11.02 |
% |
1.20 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
9.86 |
13.82 |
853,366 |
10,485,699 |
-8.44 |
% |
-7.71 |
% |
1.27 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
13.85 |
14.97 |
634,936 |
8,924,401 |
4.07 |
% |
4.59 |
% |
1.18 |
% |
|||||||||||||||||||||||||||||||||
|
LVIP Dimensional/Vanguard Total Bond Fund - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
10.20 |
11.54 |
6,795,506 |
71,468,930 |
-1.04 |
% |
-0.25 |
% |
2.34 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
10.45 |
11.57 |
5,411,712 |
57,564,268 |
2.00 |
% |
2.84 |
% |
2.17 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
10.18 |
11.25 |
4,161,260 |
43,397,818 |
1.19 |
% |
2.01 |
% |
1.95 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
10.14 |
11.03 |
2,816,332 |
28,994,884 |
-0.60 |
% |
0.21 |
% |
1.87 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
10.17 |
11.01 |
1,981,245 |
20,526,346 |
3.70 |
% |
4.54 |
% |
2.42 |
% |
|||||||||||||||||||||||||||||||||
|
LVIP Franklin Templeton Global Equity Managed Volatility Fund - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
9.80 |
16.33 |
596,162 |
7,448,480 |
-9.97 |
% |
-9.23 |
% |
1.42 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
10.79 |
18.00 |
585,988 |
8,156,943 |
20.32 |
% |
21.28 |
% |
1.38 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
8.91 |
14.85 |
600,535 |
6,933,617 |
1.50 |
% |
2.32 |
% |
1.47 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
9.06 |
14.52 |
558,459 |
6,389,354 |
-8.85 |
% |
-8.12 |
% |
1.32 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
10.85 |
15.81 |
581,505 |
7,411,680 |
-2.87 |
% |
-2.09 |
% |
1.66 |
% |
|||||||||||||||||||||||||||||||||
|
LVIP Global Conservative Allocation Managed Risk Fund - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
10.31 |
20.17 |
3,437,135 |
42,119,485 |
-5.31 |
% |
-4.55 |
% |
2.81 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
11.00 |
21.18 |
3,054,150 |
39,998,371 |
9.50 |
% |
10.38 |
% |
2.52 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
9.98 |
19.23 |
2,686,367 |
32,878,208 |
4.08 |
% |
4.92 |
% |
2.10 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
10.26 |
18.38 |
2,633,648 |
31,919,169 |
-2.87 |
% |
-2.09 |
% |
2.18 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
11.74 |
18.82 |
2,465,241 |
31,448,806 |
4.75 |
% |
5.59 |
% |
2.32 |
% |
|||||||||||||||||||||||||||||||||
|
LVIP Global Growth Allocation Managed Risk Fund - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
10.45 |
21.30 |
9,408,947 |
115,741,000 |
-7.17 |
% |
-6.42 |
% |
2.48 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
11.21 |
22.82 |
8,991,292 |
121,945,158 |
14.60 |
% |
15.52 |
% |
2.42 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
9.72 |
19.80 |
8,409,472 |
103,606,539 |
3.81 |
% |
4.64 |
% |
1.84 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
9.73 |
18.97 |
7,873,065 |
99,090,242 |
-4.55 |
% |
-3.79 |
% |
2.04 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
11.98 |
19.77 |
7,001,549 |
94,753,350 |
2.54 |
% |
3.36 |
% |
2.23 |
% |
|||||||||||||||||||||||||||||||||
|
LVIP Global Income Fund - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
10.27 |
13.35 |
1,193,230 |
13,018,660 |
0.99 |
% |
1.80 |
% |
4.13 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
10.14 |
13.11 |
1,166,381 |
12,622,989 |
4.08 |
% |
4.94 |
% |
0.00 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
9.71 |
12.49 |
963,861 |
10,048,437 |
-0.39 |
% |
0.41 |
% |
0.00 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
9.72 |
12.44 |
834,838 |
8,737,823 |
-2.90 |
% |
-2.12 |
% |
3.06 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
9.98 |
12.71 |
889,200 |
9,723,726 |
1.03 |
% |
1.84 |
% |
0.64 |
% |
|||||||||||||||||||||||||||||||||
|
LVIP Global Moderate Allocation Managed Risk Fund - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
10.45 |
20.85 |
7,713,604 |
95,787,500 |
-6.28 |
% |
-5.53 |
% |
2.44 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
11.09 |
22.12 |
7,873,285 |
106,759,661 |
13.29 |
% |
14.20 |
% |
2.31 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
9.72 |
19.42 |
7,607,349 |
93,881,212 |
3.41 |
% |
4.24 |
% |
1.71 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
10.06 |
18.68 |
7,508,533 |
93,090,092 |
-4.24 |
% |
-3.47 |
% |
2.08 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
11.89 |
19.40 |
6,492,534 |
90,005,016 |
3.21 |
% |
4.04 |
% |
2.13 |
% |
|||||||||||||||||||||||||||||||||
|
LVIP Government Money Market Fund - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
9.67 |
11.43 |
11,561,552 |
114,223,085 |
0.49 |
% |
1.29 |
% |
1.40 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
9.60 |
11.37 |
10,378,415 |
101,859,878 |
-0.49 |
% |
0.31 |
% |
0.41 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
9.62 |
11.43 |
9,452,345 |
93,224,650 |
-0.87 |
% |
-0.07 |
% |
0.03 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
9.67 |
11.53 |
7,456,983 |
74,285,516 |
-0.87 |
% |
-0.08 |
% |
0.02 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
9.72 |
11.63 |
9,828,992 |
98,499,101 |
-0.87 |
% |
-0.07 |
% |
0.03 |
% |
|||||||||||||||||||||||||||||||||
|
LVIP Invesco Diversified Equity-Income Managed Volatility Fund - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.15 |
% |
0.90 |
% |
10.53 |
11.06 |
147,534 |
1,583,095 |
-9.62 |
% |
-8.94 |
% |
1.91 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.15 |
% |
0.90 |
% |
11.56 |
12.14 |
138,757 |
1,643,646 |
10.14 |
% |
10.97 |
% |
1.43 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.15 |
% |
0.90 |
% |
10.42 |
10.94 |
136,979 |
1,471,551 |
10.15 |
% |
10.98 |
% |
1.23 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.15 |
% |
0.90 |
% |
9.74 |
9.86 |
75,374 |
735,205 |
-5.69 |
% |
-4.98 |
% |
2.38 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
6/20/14 |
0.15 |
% |
0.90 |
% |
10.33 |
10.38 |
31,641 |
327,156 |
-0.91 |
% |
2.95 |
% |
1.12 |
% |
||||||||||||||||||||||||||||||||
M-45
Lincoln Life Flexible Premium Variable Life Account M
Notes to financial statements (continued)
3. Financial Highlights (continued)
|
Subaccount |
Year |
Commencement Date(1) |
Minimum Fee Rate(2) |
Maximum Fee Rate(2) |
Minimum Unit Value(3) |
Maximum Unit Value(3) |
Units Outstanding |
Net Assets |
Minimum Total Return(4) |
Maximum Total Return(4) |
Investment Income Ratio(5) |
||||||||||||||||||||||||||||||||||||
|
LVIP JPMorgan High Yield Fund - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
$ |
10.11 |
$ |
15.82 |
3,858,152 |
$ |
47,125,457 |
-3.74 |
% |
-2.95 |
% |
5.87 |
% |
||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
11.16 |
16.31 |
3,497,853 |
44,771,365 |
5.79 |
% |
6.66 |
% |
6.46 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
10.49 |
15.29 |
2,920,520 |
35,978,118 |
12.25 |
% |
13.15 |
% |
5.46 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
9.49 |
13.51 |
2,433,013 |
27,182,994 |
-4.80 |
% |
-4.03 |
% |
5.46 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
11.36 |
14.08 |
1,872,808 |
22,500,980 |
1.92 |
% |
2.74 |
% |
5.24 |
% |
|||||||||||||||||||||||||||||||||
|
LVIP JPMorgan Select Mid Cap Value Managed Volatility Fund - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
9.73 |
20.43 |
1,014,064 |
13,180,334 |
-12.60 |
% |
-11.89 |
% |
1.40 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
11.53 |
23.20 |
994,222 |
14,851,251 |
13.66 |
% |
14.57 |
% |
1.05 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
10.07 |
20.26 |
978,019 |
12,985,982 |
9.02 |
% |
9.90 |
% |
0.71 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
9.73 |
18.45 |
877,760 |
10,911,022 |
-8.57 |
% |
-7.83 |
% |
0.83 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
13.62 |
20.02 |
722,650 |
10,148,482 |
7.15 |
% |
8.01 |
% |
1.04 |
% |
|||||||||||||||||||||||||||||||||
|
LVIP MFS International Growth Fund - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
11.21 |
17.48 |
2,717,467 |
35,682,119 |
-9.06 |
% |
-8.33 |
% |
1.39 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
12.24 |
19.12 |
2,250,682 |
33,065,346 |
30.68 |
% |
31.73 |
% |
1.22 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
9.31 |
14.55 |
2,001,926 |
22,859,412 |
0.75 |
% |
1.56 |
% |
1.56 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
9.26 |
14.36 |
1,578,613 |
18,159,884 |
0.38 |
% |
1.19 |
% |
1.29 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
9.15 |
14.23 |
1,239,853 |
14,286,741 |
-5.90 |
% |
-5.14 |
% |
1.24 |
% |
|||||||||||||||||||||||||||||||||
|
LVIP MFS Value Fund - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
10.20 |
24.80 |
6,146,585 |
97,024,445 |
-10.80 |
% |
-10.08 |
% |
1.84 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
12.94 |
27.60 |
5,327,817 |
97,369,871 |
16.58 |
% |
17.51 |
% |
1.94 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
11.02 |
23.50 |
4,183,396 |
68,828,939 |
13.04 |
% |
13.95 |
% |
2.01 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
11.20 |
20.63 |
3,265,979 |
49,920,713 |
-1.43 |
% |
-0.64 |
% |
2.30 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
14.63 |
20.77 |
2,489,200 |
40,629,184 |
9.52 |
% |
10.40 |
% |
2.83 |
% |
|||||||||||||||||||||||||||||||||
|
LVIP Mondrian International Value Fund - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
9.61 |
23.01 |
3,080,114 |
36,145,415 |
-12.27 |
% |
-11.56 |
% |
3.31 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
10.88 |
26.23 |
2,836,181 |
38,750,561 |
20.25 |
% |
21.22 |
% |
3.42 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
8.98 |
21.81 |
2,683,568 |
31,157,739 |
3.08 |
% |
3.91 |
% |
2.92 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
8.73 |
21.16 |
2,178,712 |
26,465,929 |
-4.65 |
% |
-3.89 |
% |
3.26 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
9.51 |
22.19 |
1,530,365 |
21,752,727 |
-3.41 |
% |
-2.64 |
% |
4.26 |
% |
|||||||||||||||||||||||||||||||||
|
LVIP Multi-Manager Global Equity Managed Volatility Fund - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.15 |
% |
0.90 |
% |
10.40 |
10.77 |
24,651 |
258,043 |
-9.04 |
% |
-8.36 |
% |
0.75 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.15 |
% |
0.90 |
% |
11.44 |
11.76 |
39,232 |
449,615 |
19.53 |
% |
20.43 |
% |
1.90 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.15 |
% |
0.90 |
% |
9.54 |
9.76 |
33,977 |
325,507 |
4.95 |
% |
5.74 |
% |
2.02 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.15 |
% |
0.90 |
% |
9.12 |
9.12 |
21,795 |
198,758 |
-7.61 |
% |
-7.61 |
% |
4.54 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
10/23/14 |
0.90 |
% |
0.90 |
% |
9.87 |
9.87 |
1,964 |
19,379 |
1.28 |
% |
1.28 |
% |
1.74 |
% |
||||||||||||||||||||||||||||||||
|
LVIP SSGA Bond Index Fund - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
10.47 |
13.73 |
4,625,750 |
49,641,529 |
-1.22 |
% |
-0.42 |
% |
3.22 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
10.52 |
13.79 |
3,283,574 |
35,948,987 |
2.26 |
% |
3.08 |
% |
2.79 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
10.21 |
13.38 |
2,406,150 |
25,939,724 |
1.36 |
% |
2.17 |
% |
2.58 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
10.25 |
13.10 |
1,327,020 |
14,410,073 |
-0.65 |
% |
0.15 |
% |
2.80 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
10.29 |
13.08 |
920,793 |
10,320,436 |
4.81 |
% |
5.65 |
% |
2.24 |
% |
|||||||||||||||||||||||||||||||||
|
LVIP SSGA Conservative Index Allocation Fund - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.15 |
% |
0.90 |
% |
10.33 |
14.50 |
1,784,619 |
20,403,814 |
-5.20 |
% |
-4.48 |
% |
2.49 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.15 |
% |
0.90 |
% |
11.21 |
15.18 |
1,583,092 |
19,175,389 |
9.72 |
% |
10.55 |
% |
2.51 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.15 |
% |
0.90 |
% |
10.14 |
13.73 |
1,162,208 |
13,074,821 |
4.06 |
% |
4.86 |
% |
2.27 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.15 |
% |
0.90 |
% |
10.23 |
13.10 |
783,320 |
8,609,558 |
-1.83 |
% |
-1.09 |
% |
2.25 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
11.36 |
13.26 |
566,276 |
6,467,570 |
3.79 |
% |
4.61 |
% |
2.09 |
% |
|||||||||||||||||||||||||||||||||
|
LVIP SSGA Conservative Structured Allocation Fund - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.15 |
% |
0.90 |
% |
10.58 |
14.38 |
1,010,652 |
12,142,514 |
-5.86 |
% |
-5.15 |
% |
3.01 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.15 |
% |
0.90 |
% |
11.15 |
15.16 |
965,655 |
12,332,367 |
8.71 |
% |
9.53 |
% |
3.75 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
10.18 |
13.89 |
819,050 |
9,716,216 |
5.88 |
% |
6.73 |
% |
2.72 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
10.20 |
13.01 |
453,297 |
5,129,115 |
-2.74 |
% |
-1.96 |
% |
2.79 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
11.51 |
13.27 |
403,758 |
4,737,219 |
4.59 |
% |
5.43 |
% |
2.84 |
% |
|||||||||||||||||||||||||||||||||
|
LVIP SSGA Developed International 150 Fund - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
9.77 |
15.32 |
2,188,595 |
24,811,269 |
-15.99 |
% |
-15.32 |
% |
4.03 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
11.54 |
18.13 |
1,384,231 |
19,276,268 |
22.47 |
% |
23.45 |
% |
4.72 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
9.35 |
14.72 |
1,038,447 |
12,110,200 |
8.75 |
% |
9.62 |
% |
3.76 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
9.30 |
13.46 |
860,268 |
9,494,438 |
-5.16 |
% |
-4.39 |
% |
3.55 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
9.80 |
14.12 |
501,522 |
6,123,586 |
0.00 |
% |
0.81 |
% |
5.69 |
% |
|||||||||||||||||||||||||||||||||
M-46
Lincoln Life Flexible Premium Variable Life Account M
Notes to financial statements (continued)
3. Financial Highlights (continued)
|
Subaccount |
Year |
Commencement Date(1) |
Minimum Fee Rate(2) |
Maximum Fee Rate(2) |
Minimum Unit Value(3) |
Maximum Unit Value(3) |
Units Outstanding |
Net Assets |
Minimum Total Return(4) |
Maximum Total Return(4) |
Investment Income Ratio(5) |
||||||||||||||||||||||||||||||||||||
|
LVIP SSGA Emerging Markets 100 Fund - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
$ |
9.27 |
$ |
13.98 |
3,711,501 |
$ |
39,584,864 |
-13.12 |
% |
-12.40 |
% |
5.17 |
% |
||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
10.60 |
15.96 |
2,503,358 |
31,113,092 |
22.72 |
% |
23.71 |
% |
3.00 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
8.58 |
12.90 |
1,969,963 |
20,166,518 |
14.40 |
% |
15.32 |
% |
2.87 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
7.90 |
11.19 |
1,624,339 |
14,790,712 |
-17.78 |
% |
-17.12 |
% |
4.78 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
9.56 |
13.50 |
1,231,033 |
13,822,758 |
-4.24 |
% |
-3.47 |
% |
3.31 |
% |
|||||||||||||||||||||||||||||||||
|
LVIP SSGA Global Tactical Allocation Managed Volatility Fund - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
10.13 |
19.89 |
1,816,594 |
21,567,122 |
-9.00 |
% |
-8.27 |
% |
2.86 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
11.05 |
21.74 |
1,791,549 |
23,636,690 |
13.78 |
% |
14.70 |
% |
4.04 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
9.64 |
19.00 |
1,808,130 |
21,365,684 |
4.68 |
% |
5.52 |
% |
1.88 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
9.73 |
18.05 |
1,648,494 |
19,089,809 |
-7.36 |
% |
-6.61 |
% |
3.09 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
10.54 |
19.38 |
1,520,967 |
19,161,929 |
3.04 |
% |
3.87 |
% |
2.38 |
% |
|||||||||||||||||||||||||||||||||
|
LVIP SSGA International Index Fund - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
9.16 |
14.65 |
4,089,319 |
44,111,804 |
-14.48 |
% |
-13.79 |
% |
2.98 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
10.72 |
17.04 |
2,926,267 |
37,627,274 |
23.57 |
% |
24.57 |
% |
2.92 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
8.67 |
13.71 |
2,386,974 |
25,160,758 |
0.09 |
% |
0.89 |
% |
3.25 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
8.66 |
13.62 |
1,627,020 |
17,651,137 |
-2.10 |
% |
-1.32 |
% |
2.96 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
8.85 |
13.84 |
968,852 |
11,299,705 |
-6.69 |
% |
-5.94 |
% |
4.04 |
% |
|||||||||||||||||||||||||||||||||
|
LVIP SSGA International Managed Volatility Fund - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.15 |
% |
0.90 |
% |
8.40 |
10.43 |
1,080,124 |
9,602,076 |
-13.00 |
% |
-12.34 |
% |
2.32 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.15 |
% |
0.90 |
% |
9.66 |
11.18 |
1,037,831 |
10,574,704 |
23.15 |
% |
24.08 |
% |
2.27 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
12/9/16 |
0.15 |
% |
0.90 |
% |
7.84 |
9.08 |
1,068,276 |
8,797,185 |
-0.43 |
% |
-0.38 |
% |
1.00 |
% |
||||||||||||||||||||||||||||||||
|
LVIP SSGA Large Cap 100 Fund - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
11.68 |
29.16 |
1,977,389 |
31,368,579 |
-11.90 |
% |
-11.20 |
% |
2.42 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
13.16 |
32.85 |
1,511,932 |
28,715,780 |
17.69 |
% |
18.64 |
% |
3.20 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
11.10 |
27.70 |
1,136,849 |
19,319,987 |
20.44 |
% |
21.41 |
% |
2.52 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
11.36 |
22.83 |
909,839 |
13,366,510 |
-5.53 |
% |
-4.77 |
% |
2.88 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
16.13 |
23.98 |
731,892 |
12,013,723 |
15.66 |
% |
16.61 |
% |
3.46 |
% |
|||||||||||||||||||||||||||||||||
|
LVIP SSGA Moderate Index Allocation Fund - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
10.85 |
16.07 |
7,119,100 |
84,820,506 |
-7.11 |
% |
-6.37 |
% |
2.47 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
11.59 |
17.16 |
5,792,800 |
74,889,634 |
13.53 |
% |
14.44 |
% |
2.47 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
10.13 |
15.00 |
4,393,504 |
50,711,847 |
5.69 |
% |
6.54 |
% |
2.24 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
10.24 |
14.08 |
3,183,111 |
35,480,330 |
-2.36 |
% |
-1.57 |
% |
2.40 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
12.02 |
14.30 |
1,581,349 |
18,969,549 |
3.79 |
% |
4.31 |
% |
3.04 |
% |
|||||||||||||||||||||||||||||||||
|
LVIP SSGA Moderate Structured Allocation Fund - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.15 |
% |
0.90 |
% |
10.68 |
15.85 |
5,114,268 |
62,640,566 |
-7.96 |
% |
-7.26 |
% |
3.22 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.15 |
% |
0.90 |
% |
11.52 |
17.09 |
4,726,704 |
63,310,253 |
12.13 |
% |
12.98 |
% |
4.27 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.15 |
% |
0.90 |
% |
10.19 |
15.13 |
3,895,800 |
47,076,770 |
8.29 |
% |
9.11 |
% |
2.44 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.15 |
% |
0.90 |
% |
10.22 |
13.86 |
2,978,701 |
34,030,195 |
-3.57 |
% |
-2.84 |
% |
3.29 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.15 |
% |
0.90 |
% |
12.24 |
14.27 |
1,910,289 |
23,583,158 |
4.61 |
% |
5.40 |
% |
3.40 |
% |
|||||||||||||||||||||||||||||||||
|
LVIP SSGA Moderately Aggressive Index Allocation Fund - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.15 |
% |
0.90 |
% |
10.88 |
16.51 |
8,529,062 |
103,868,834 |
-8.25 |
% |
-7.56 |
% |
2.28 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.15 |
% |
0.90 |
% |
11.77 |
17.87 |
7,319,600 |
97,764,153 |
15.92 |
% |
16.80 |
% |
2.40 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.15 |
% |
0.90 |
% |
10.08 |
15.30 |
5,540,298 |
65,233,456 |
6.40 |
% |
7.21 |
% |
2.31 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.15 |
% |
0.90 |
% |
10.21 |
14.27 |
3,997,802 |
45,387,396 |
-2.91 |
% |
-2.18 |
% |
2.39 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.15 |
% |
0.90 |
% |
12.28 |
14.59 |
2,378,208 |
29,283,033 |
3.08 |
% |
3.85 |
% |
2.98 |
% |
|||||||||||||||||||||||||||||||||
|
LVIP SSGA Moderately Aggressive Structured Allocation Fund - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
10.66 |
16.64 |
4,417,799 |
56,179,602 |
-9.03 |
% |
-8.29 |
% |
3.43 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
11.63 |
18.14 |
3,810,703 |
53,867,810 |
13.87 |
% |
14.78 |
% |
4.66 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
10.14 |
15.81 |
3,094,017 |
39,006,718 |
9.49 |
% |
10.36 |
% |
2.60 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
10.18 |
14.32 |
2,246,158 |
26,556,539 |
-4.35 |
% |
-3.59 |
% |
3.65 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
12.52 |
14.86 |
1,601,218 |
20,347,953 |
4.65 |
% |
5.20 |
% |
3.85 |
% |
|||||||||||||||||||||||||||||||||
|
LVIP SSGA S&P 500 Index Fund - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
11.08 |
28.62 |
27,668,929 |
431,207,849 |
-5.50 |
% |
-4.74 |
% |
2.04 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
13.29 |
30.06 |
20,385,057 |
346,435,507 |
20.48 |
% |
21.45 |
% |
2.16 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
10.95 |
24.76 |
14,732,615 |
217,044,152 |
10.76 |
% |
11.64 |
% |
2.18 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
11.08 |
22.19 |
9,962,537 |
140,243,346 |
0.27 |
% |
1.07 |
% |
2.24 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
14.89 |
21.97 |
6,267,278 |
94,741,610 |
12.41 |
% |
13.31 |
% |
2.66 |
% |
|||||||||||||||||||||||||||||||||
M-47
Lincoln Life Flexible Premium Variable Life Account M
Notes to financial statements (continued)
3. Financial Highlights (continued)
|
Subaccount |
Year |
Commencement Date(1) |
Minimum Fee Rate(2) |
Maximum Fee Rate(2) |
Minimum Unit Value(3) |
Maximum Unit Value(3) |
Units Outstanding |
Net Assets |
Minimum Total Return(4) |
Maximum Total Return(4) |
Investment Income Ratio(5) |
||||||||||||||||||||||||||||||||||||
|
LVIP SSGA Small-Cap Index Fund - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
$ |
9.82 |
$ |
25.02 |
3,983,699 |
$ |
54,082,381 |
-12.16 |
% |
-11.47 |
% |
1.07 |
% |
||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
12.70 |
28.27 |
3,128,328 |
50,190,541 |
13.19 |
% |
14.11 |
% |
1.13 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
11.15 |
24.79 |
2,296,033 |
34,206,627 |
19.60 |
% |
20.56 |
% |
1.42 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
10.17 |
20.57 |
1,748,509 |
22,964,838 |
-5.57 |
% |
-4.81 |
% |
1.10 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
14.48 |
21.62 |
1,111,489 |
16,504,267 |
3.74 |
% |
4.57 |
% |
1.19 |
% |
|||||||||||||||||||||||||||||||||
|
LVIP SSGA Small-Mid Cap 200 Fund - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
9.05 |
24.62 |
3,022,030 |
38,612,203 |
-14.23 |
% |
-13.55 |
% |
3.34 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
12.15 |
28.49 |
2,222,341 |
34,145,921 |
5.38 |
% |
6.22 |
% |
2.87 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
11.46 |
26.83 |
1,627,475 |
24,540,696 |
28.92 |
% |
29.96 |
% |
2.63 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
10.09 |
20.66 |
986,778 |
12,721,287 |
-7.67 |
% |
-6.93 |
% |
2.82 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
14.58 |
22.21 |
702,771 |
10,483,832 |
3.37 |
% |
4.20 |
% |
4.36 |
% |
|||||||||||||||||||||||||||||||||
|
LVIP T. Rowe Price 2010 Fund - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.20 |
% |
0.90 |
% |
10.70 |
19.29 |
17,557 |
222,359 |
-5.08 |
% |
-4.41 |
% |
2.17 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.20 |
% |
0.90 |
% |
13.19 |
20.21 |
17,335 |
232,617 |
8.66 |
% |
9.26 |
% |
1.83 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.35 |
% |
0.90 |
% |
12.08 |
18.50 |
22,383 |
295,330 |
3.50 |
% |
4.07 |
% |
1.80 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.35 |
% |
0.90 |
% |
11.60 |
17.78 |
23,235 |
295,560 |
-2.49 |
% |
-1.95 |
% |
1.84 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.35 |
% |
0.90 |
% |
11.83 |
18.13 |
24,085 |
313,654 |
3.84 |
% |
4.41 |
% |
1.79 |
% |
|||||||||||||||||||||||||||||||||
|
LVIP T. Rowe Price 2020 Fund - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
10.71 |
19.77 |
73,223 |
940,192 |
-6.42 |
% |
-5.68 |
% |
1.99 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
11.37 |
21.01 |
69,991 |
991,026 |
11.02 |
% |
11.91 |
% |
2.02 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
10.81 |
18.82 |
73,470 |
941,136 |
3.52 |
% |
4.35 |
% |
1.76 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
11.72 |
18.08 |
79,239 |
1,009,846 |
-3.09 |
% |
-2.32 |
% |
1.79 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
12.03 |
18.56 |
83,370 |
1,107,409 |
3.45 |
% |
4.28 |
% |
2.05 |
% |
|||||||||||||||||||||||||||||||||
|
LVIP T. Rowe Price 2030 Fund - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
10.16 |
20.15 |
179,913 |
2,055,351 |
-8.42 |
% |
-7.68 |
% |
1.78 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
11.36 |
21.88 |
166,380 |
2,233,582 |
12.45 |
% |
13.35 |
% |
1.85 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
10.03 |
19.35 |
213,585 |
2,555,494 |
2.76 |
% |
3.61 |
% |
1.83 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
11.84 |
18.72 |
213,978 |
2,510,695 |
-3.53 |
% |
-2.76 |
% |
1.80 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
12.20 |
19.30 |
186,689 |
2,452,517 |
3.23 |
% |
4.05 |
% |
2.21 |
% |
|||||||||||||||||||||||||||||||||
|
LVIP T. Rowe Price 2040 Fund - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
10.11 |
20.97 |
250,772 |
3,252,496 |
-9.54 |
% |
-8.81 |
% |
1.55 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
11.42 |
23.06 |
269,091 |
3,893,372 |
13.60 |
% |
14.51 |
% |
2.00 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
10.10 |
20.19 |
269,921 |
3,529,632 |
2.88 |
% |
3.71 |
% |
1.75 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
11.30 |
19.51 |
268,057 |
3,474,566 |
-4.09 |
% |
-3.32 |
% |
1.69 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
11.78 |
20.23 |
269,388 |
3,711,005 |
2.55 |
% |
3.38 |
% |
2.22 |
% |
|||||||||||||||||||||||||||||||||
|
LVIP T. Rowe Price Growth Stock Fund - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
12.20 |
34.03 |
3,668,619 |
64,457,832 |
-2.01 |
% |
-1.22 |
% |
0.19 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
13.88 |
34.47 |
2,948,541 |
54,950,147 |
32.50 |
% |
33.56 |
% |
0.25 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
10.41 |
25.82 |
2,419,308 |
35,251,022 |
0.49 |
% |
1.29 |
% |
0.10 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
11.87 |
25.50 |
1,764,974 |
27,772,426 |
9.74 |
% |
10.62 |
% |
0.00 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
15.09 |
23.07 |
1,210,201 |
18,960,840 |
7.74 |
% |
8.60 |
% |
0.00 |
% |
|||||||||||||||||||||||||||||||||
|
LVIP T. Rowe Price Structured Mid-Cap Growth Fund - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
11.37 |
44.69 |
2,074,573 |
34,281,313 |
-3.94 |
% |
-3.17 |
% |
0.41 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
12.73 |
46.27 |
1,686,098 |
30,325,424 |
23.63 |
% |
24.62 |
% |
0.22 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
10.23 |
37.22 |
1,403,143 |
21,280,456 |
6.59 |
% |
7.45 |
% |
0.31 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
11.24 |
34.73 |
927,977 |
14,573,556 |
1.19 |
% |
2.00 |
% |
0.15 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
15.30 |
34.13 |
598,822 |
10,270,202 |
10.59 |
% |
11.48 |
% |
0.29 |
% |
|||||||||||||||||||||||||||||||||
|
LVIP U.S. Growth Allocation Managed Risk Fund - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
10.67 |
10.97 |
925,505 |
9,942,748 |
-5.47 |
% |
-4.76 |
% |
2.06 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.15 |
% |
0.90 |
% |
11.29 |
11.52 |
351,360 |
3,971,422 |
14.19 |
% |
15.06 |
% |
2.29 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.15 |
% |
0.90 |
% |
9.89 |
10.01 |
160,929 |
1,591,773 |
3.15 |
% |
3.94 |
% |
2.01 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
7/27/15 |
0.15 |
% |
0.90 |
% |
9.59 |
9.63 |
9,376 |
89,887 |
-2.81 |
% |
0.41 |
% |
3.04 |
% |
||||||||||||||||||||||||||||||||
|
LVIP Vanguard Domestic Equity ETF Fund - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
10.93 |
20.22 |
6,312,789 |
95,102,714 |
-5.78 |
% |
-5.02 |
% |
1.62 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
13.02 |
21.29 |
4,860,297 |
79,953,483 |
19.09 |
% |
20.05 |
% |
1.75 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
10.85 |
17.74 |
3,503,421 |
49,917,610 |
11.14 |
% |
12.03 |
% |
1.80 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
11.24 |
15.83 |
2,569,361 |
34,212,746 |
-1.22 |
% |
-0.41 |
% |
1.98 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
14.74 |
15.90 |
1,487,364 |
21,801,954 |
11.15 |
% |
12.10 |
% |
2.70 |
% |
|||||||||||||||||||||||||||||||||
M-48
Lincoln Life Flexible Premium Variable Life Account M
Notes to financial statements (continued)
3. Financial Highlights (continued)
|
Subaccount |
Year |
Commencement Date(1) |
Minimum Fee Rate(2) |
Maximum Fee Rate(2) |
Minimum Unit Value(3) |
Maximum Unit Value(3) |
Units Outstanding |
Net Assets |
Minimum Total Return(4) |
Maximum Total Return(4) |
Investment Income Ratio(5) |
||||||||||||||||||||||||||||||||||||
|
LVIP Vanguard International Equity ETF Fund - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
$ |
9.97 |
$ |
13.02 |
6,098,778 |
$ |
67,409,179 |
-15.47 |
% |
-14.79 |
% |
2.47 |
% |
||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
11.71 |
15.31 |
4,420,556 |
58,596,871 |
27.16 |
% |
28.18 |
% |
2.32 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
9.15 |
11.98 |
3,411,709 |
36,297,522 |
2.79 |
% |
3.61 |
% |
2.60 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
9.47 |
11.59 |
2,408,567 |
25,635,793 |
-3.82 |
% |
-3.04 |
% |
2.73 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
10.66 |
11.98 |
1,665,868 |
18,908,053 |
-5.54 |
% |
-4.74 |
% |
3.19 |
% |
|||||||||||||||||||||||||||||||||
|
LVIP VIP Mid Cap Managed Volatility Portfolio - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2015 |
0.15 |
% |
0.90 |
% |
9.66 |
9.77 |
18,204 |
175,773 |
-5.30 |
% |
-4.59 |
% |
0.96 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
6/5/14 |
0.15 |
% |
0.90 |
% |
10.20 |
10.25 |
11,079 |
113,238 |
-1.22 |
% |
-0.11 |
% |
1.21 |
% |
||||||||||||||||||||||||||||||||
|
LVIP Wellington Capital Growth Fund - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
12.75 |
32.13 |
1,492,880 |
29,137,203 |
0.44 |
% |
1.25 |
% |
0.00 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
13.92 |
31.75 |
1,071,493 |
22,336,966 |
34.64 |
% |
35.73 |
% |
0.00 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
10.26 |
23.40 |
921,930 |
14,925,116 |
-0.81 |
% |
0.00 |
% |
0.00 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
11.91 |
23.41 |
666,855 |
11,947,015 |
8.44 |
% |
9.31 |
% |
0.00 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
15.47 |
21.43 |
528,151 |
9,150,974 |
10.38 |
% |
11.26 |
% |
0.20 |
% |
|||||||||||||||||||||||||||||||||
|
LVIP Wellington Mid-Cap Value Fund - Standard Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
9.26 |
23.87 |
1,704,188 |
21,774,176 |
-15.30 |
% |
-14.62 |
% |
0.75 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
11.93 |
27.98 |
1,324,350 |
20,561,424 |
12.42 |
% |
13.32 |
% |
0.47 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
10.53 |
24.70 |
911,886 |
13,570,353 |
12.05 |
% |
12.95 |
% |
0.50 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
10.69 |
21.88 |
765,738 |
10,526,110 |
-2.40 |
% |
-1.61 |
% |
0.72 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
13.96 |
22.25 |
505,323 |
7,995,823 |
7.32 |
% |
8.18 |
% |
0.36 |
% |
|||||||||||||||||||||||||||||||||
|
M Capital Appreciation Fund |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.20 |
% |
0.90 |
% |
10.77 |
31.13 |
110,252 |
1,395,250 |
-14.92 |
% |
-14.32 |
% |
0.32 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.20 |
% |
0.90 |
% |
12.57 |
50.97 |
91,754 |
1,517,205 |
17.95 |
% |
18.78 |
% |
0.00 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.20 |
% |
0.90 |
% |
10.58 |
43.21 |
100,873 |
1,425,209 |
19.98 |
% |
20.82 |
% |
0.00 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.20 |
% |
0.90 |
% |
10.15 |
36.02 |
104,383 |
1,525,765 |
-7.42 |
% |
-6.77 |
% |
0.00 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.20 |
% |
0.90 |
% |
16.52 |
38.90 |
76,795 |
1,656,805 |
11.41 |
% |
12.03 |
% |
0.00 |
% |
|||||||||||||||||||||||||||||||||
|
M International Equity Fund |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.20 |
% |
0.90 |
% |
8.42 |
12.43 |
189,449 |
1,643,270 |
-21.28 |
% |
-20.73 |
% |
1.48 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.20 |
% |
0.90 |
% |
9.83 |
25.18 |
172,197 |
1,873,762 |
22.93 |
% |
23.80 |
% |
1.69 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.20 |
% |
0.90 |
% |
7.97 |
20.49 |
182,241 |
1,609,705 |
-0.95 |
% |
-0.25 |
% |
0.84 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.20 |
% |
0.90 |
% |
8.02 |
20.68 |
208,714 |
2,122,506 |
-4.80 |
% |
-4.13 |
% |
1.65 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.20 |
% |
0.90 |
% |
8.40 |
21.73 |
181,240 |
2,363,323 |
-7.89 |
% |
-7.38 |
% |
2.41 |
% |
|||||||||||||||||||||||||||||||||
|
M Large Cap Growth Fund |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.20 |
% |
0.90 |
% |
13.01 |
31.10 |
186,121 |
2,722,866 |
-5.80 |
% |
-5.14 |
% |
0.00 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.20 |
% |
0.90 |
% |
13.72 |
41.46 |
164,647 |
2,927,055 |
37.72 |
% |
38.70 |
% |
0.00 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.20 |
% |
0.90 |
% |
9.89 |
30.10 |
184,159 |
2,369,313 |
-3.20 |
% |
-2.52 |
% |
0.00 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.20 |
% |
0.90 |
% |
12.08 |
31.10 |
158,788 |
2,551,482 |
6.74 |
% |
7.49 |
% |
0.03 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.20 |
% |
0.90 |
% |
15.37 |
29.13 |
133,919 |
2,697,846 |
9.22 |
% |
9.83 |
% |
0.04 |
% |
|||||||||||||||||||||||||||||||||
|
M Large Cap Value Fund |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.20 |
% |
0.90 |
% |
10.48 |
20.62 |
179,719 |
2,014,813 |
-12.86 |
% |
-12.24 |
% |
1.44 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.20 |
% |
0.90 |
% |
11.94 |
32.04 |
165,519 |
2,232,755 |
13.96 |
% |
14.76 |
% |
1.54 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.20 |
% |
0.90 |
% |
10.40 |
28.12 |
168,942 |
2,005,540 |
8.66 |
% |
9.42 |
% |
1.48 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.20 |
% |
0.90 |
% |
10.48 |
25.88 |
164,363 |
2,201,681 |
-1.55 |
% |
-0.86 |
% |
1.35 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.20 |
% |
0.90 |
% |
13.74 |
26.28 |
123,742 |
2,235,746 |
8.69 |
% |
9.30 |
% |
1.18 |
% |
|||||||||||||||||||||||||||||||||
|
MFS® VIT Core Equity Series - Initial Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2015 |
0.00 |
% |
0.00 |
% |
— |
— |
— |
— |
0.00 |
% |
0.00 |
% |
0.95 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.35 |
% |
0.90 |
% |
15.73 |
27.98 |
46,751 |
846,498 |
10.24 |
% |
10.85 |
% |
0.78 |
% |
|||||||||||||||||||||||||||||||||
|
MFS® VIT Growth Series - Initial Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
12.55 |
41.11 |
2,331,007 |
48,185,275 |
1.75 |
% |
2.57 |
% |
0.09 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
13.85 |
40.19 |
1,935,174 |
41,786,944 |
30.23 |
% |
31.27 |
% |
0.11 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
10.56 |
30.69 |
1,667,122 |
29,131,037 |
1.53 |
% |
2.34 |
% |
0.04 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
11.62 |
30.06 |
1,320,680 |
24,733,134 |
6.60 |
% |
7.45 |
% |
0.16 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
15.10 |
28.05 |
1,079,429 |
20,806,013 |
7.97 |
% |
8.84 |
% |
0.11 |
% |
|||||||||||||||||||||||||||||||||
|
MFS® VIT Total Return Series - Initial Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
10.30 |
25.67 |
3,180,028 |
44,381,031 |
-6.46 |
% |
-5.71 |
% |
2.31 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
11.65 |
27.44 |
2,459,176 |
39,868,443 |
11.29 |
% |
12.19 |
% |
2.42 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
10.94 |
24.66 |
1,960,725 |
31,361,222 |
8.12 |
% |
8.99 |
% |
2.66 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
10.44 |
22.81 |
1,716,476 |
27,419,153 |
-1.26 |
% |
-0.47 |
% |
2.61 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
13.43 |
23.10 |
1,723,205 |
29,128,409 |
7.53 |
% |
8.39 |
% |
1.87 |
% |
|||||||||||||||||||||||||||||||||
M-49
Lincoln Life Flexible Premium Variable Life Account M
Notes to financial statements (continued)
3. Financial Highlights (continued)
|
Subaccount |
Year |
Commencement Date(1) |
Minimum Fee Rate(2) |
Maximum Fee Rate(2) |
Minimum Unit Value(3) |
Maximum Unit Value(3) |
Units Outstanding |
Net Assets |
Minimum Total Return(4) |
Maximum Total Return(4) |
Investment Income Ratio(5) |
||||||||||||||||||||||||||||||||||||
|
MFS® VIT Utilities Series - Initial Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
$ |
10.71 |
$ |
46.95 |
2,343,690 |
$ |
37,180,065 |
0.15 |
% |
0.96 |
% |
1.11 |
% |
||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
10.62 |
46.87 |
2,390,837 |
39,244,658 |
13.80 |
% |
14.72 |
% |
4.28 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
9.27 |
41.19 |
2,310,233 |
35,740,262 |
10.47 |
% |
11.36 |
% |
3.55 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
8.72 |
37.28 |
2,036,636 |
30,854,834 |
-15.28 |
% |
-14.60 |
% |
4.17 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
13.94 |
44.85 |
1,715,806 |
34,103,663 |
11.72 |
% |
12.62 |
% |
2.12 |
% |
|||||||||||||||||||||||||||||||||
|
MFS® VIT II Core Equity Portfolio - Initial Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.20 |
% |
0.90 |
% |
14.42 |
36.81 |
40,111 |
921,109 |
-4.69 |
% |
-3.99 |
% |
0.66 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.20 |
% |
0.90 |
% |
15.02 |
38.41 |
42,642 |
1,026,457 |
23.71 |
% |
24.58 |
% |
0.91 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.20 |
% |
0.90 |
% |
12.06 |
30.88 |
53,744 |
1,053,679 |
10.38 |
% |
11.15 |
% |
0.77 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
3/27/15 |
0.20 |
% |
0.90 |
% |
10.85 |
27.82 |
46,067 |
798,921 |
-3.21 |
% |
-2.69 |
% |
0.55 |
% |
||||||||||||||||||||||||||||||||
|
Neuberger Berman AMT Large Cap Value Portfolio - I Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.20 |
% |
0.90 |
% |
20.68 |
36.55 |
47,111 |
1,405,631 |
-1.93 |
% |
-1.39 |
% |
1.15 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.35 |
% |
0.90 |
% |
20.97 |
37.06 |
52,764 |
1,594,837 |
12.35 |
% |
12.96 |
% |
0.57 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.35 |
% |
0.90 |
% |
18.56 |
32.81 |
60,482 |
1,647,804 |
26.23 |
% |
26.92 |
% |
0.73 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.35 |
% |
0.90 |
% |
14.62 |
25.85 |
56,983 |
1,215,782 |
-12.60 |
% |
-12.11 |
% |
0.75 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.35 |
% |
0.90 |
% |
16.64 |
29.41 |
59,659 |
1,445,998 |
8.87 |
% |
9.47 |
% |
0.73 |
% |
|||||||||||||||||||||||||||||||||
|
Neuberger Berman AMT Mid Cap Growth Portfolio - I Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.20 |
% |
0.90 |
% |
12.61 |
34.40 |
794,415 |
15,811,261 |
-7.24 |
% |
-6.58 |
% |
0.00 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.20 |
% |
0.90 |
% |
13.51 |
36.88 |
867,773 |
18,882,798 |
24.17 |
% |
25.04 |
% |
0.00 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.20 |
% |
0.90 |
% |
10.80 |
29.54 |
939,502 |
16,982,080 |
3.46 |
% |
4.19 |
% |
0.00 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.20 |
% |
0.90 |
% |
11.08 |
28.40 |
934,244 |
17,496,330 |
0.37 |
% |
1.07 |
% |
0.00 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.20 |
% |
0.90 |
% |
14.13 |
28.14 |
929,266 |
19,090,065 |
6.62 |
% |
7.86 |
% |
0.00 |
% |
|||||||||||||||||||||||||||||||||
|
Neuberger Berman AMT Mid Cap Intrinsic Value Portfolio - I Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.20 |
% |
0.90 |
% |
10.67 |
35.90 |
326,774 |
4,999,884 |
-16.03 |
% |
-15.44 |
% |
0.66 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.20 |
% |
0.90 |
% |
12.61 |
42.52 |
340,611 |
6,318,830 |
15.69 |
% |
16.50 |
% |
0.83 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.20 |
% |
0.90 |
% |
10.83 |
36.55 |
351,672 |
5,819,933 |
15.13 |
% |
15.94 |
% |
0.61 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.20 |
% |
0.90 |
% |
10.76 |
31.57 |
341,905 |
5,459,516 |
-9.16 |
% |
-8.52 |
% |
0.77 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.20 |
% |
0.90 |
% |
16.34 |
34.57 |
307,445 |
6,310,829 |
12.82 |
% |
13.44 |
% |
1.04 |
% |
|||||||||||||||||||||||||||||||||
|
PIMCO VIT CommodityRealReturn® Strategy Portfolio - Administrative Class |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
4.99 |
8.59 |
3,820,862 |
22,381,068 |
-14.90 |
% |
-14.22 |
% |
2.08 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
5.84 |
9.24 |
3,405,950 |
23,364,966 |
1.24 |
% |
2.05 |
% |
11.16 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
5.76 |
9.05 |
2,757,242 |
18,599,830 |
14.12 |
% |
15.04 |
% |
1.04 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
5.03 |
7.87 |
2,461,120 |
14,511,219 |
-26.37 |
% |
-25.78 |
% |
4.21 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
6.81 |
10.60 |
1,658,515 |
13,319,443 |
-19.16 |
% |
-18.51 |
% |
0.37 |
% |
|||||||||||||||||||||||||||||||||
|
Putnam VT Equity Income Fund - Class IB |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.35 |
% |
0.90 |
% |
18.47 |
30.09 |
69,682 |
1,442,119 |
-9.31 |
% |
-8.81 |
% |
0.70 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
5/12/17 |
0.35 |
% |
0.90 |
% |
20.26 |
33.00 |
74,509 |
1,697,270 |
12.56 |
% |
12.95 |
% |
0.00 |
% |
||||||||||||||||||||||||||||||||
|
Putnam VT Global Health Care Fund - Class IB |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.35 |
% |
0.90 |
% |
21.81 |
30.51 |
67,869 |
1,700,990 |
-1.48 |
% |
-0.94 |
% |
0.97 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.35 |
% |
0.90 |
% |
22.01 |
30.80 |
74,096 |
1,881,309 |
14.27 |
% |
14.90 |
% |
0.52 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.35 |
% |
0.90 |
% |
19.16 |
26.81 |
89,707 |
2,014,431 |
-12.15 |
% |
-11.66 |
% |
0.00 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.35 |
% |
0.90 |
% |
21.69 |
30.35 |
130,873 |
3,383,281 |
6.82 |
% |
7.41 |
% |
0.00 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.35 |
% |
0.90 |
% |
20.19 |
28.25 |
109,332 |
2,596,343 |
26.50 |
% |
27.20 |
% |
0.25 |
% |
|||||||||||||||||||||||||||||||||
|
Putnam VT Growth & Income Fund - Class IB |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2017 |
0.00 |
% |
0.00 |
% |
— |
— |
— |
— |
0.00 |
% |
0.00 |
% |
2.09 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.35 |
% |
0.90 |
% |
17.08 |
27.82 |
72,298 |
1,395,426 |
13.99 |
% |
14.62 |
% |
1.43 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.35 |
% |
0.90 |
% |
14.90 |
24.27 |
83,705 |
1,386,528 |
-8.36 |
% |
-7.85 |
% |
1.84 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.35 |
% |
0.90 |
% |
16.17 |
26.34 |
94,544 |
1,718,159 |
9.74 |
% |
10.35 |
% |
1.34 |
% |
|||||||||||||||||||||||||||||||||
|
Templeton Foreign VIP Fund - Class 1 |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.55 |
% |
0.55 |
% |
15.40 |
15.40 |
70,377 |
1,083,507 |
-15.73 |
% |
-15.73 |
% |
2.89 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.55 |
% |
0.55 |
% |
18.27 |
18.27 |
73,741 |
1,347,279 |
16.38 |
% |
16.38 |
% |
2.76 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.55 |
% |
0.55 |
% |
15.70 |
15.70 |
84,016 |
1,318,979 |
6.90 |
% |
6.90 |
% |
2.00 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.55 |
% |
0.55 |
% |
14.69 |
14.69 |
87,339 |
1,282,639 |
-6.82 |
% |
-6.82 |
% |
3.32 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.55 |
% |
0.55 |
% |
15.76 |
15.76 |
83,308 |
1,313,006 |
-11.38 |
% |
-11.38 |
% |
2.08 |
% |
|||||||||||||||||||||||||||||||||
|
Templeton Foreign VIP Fund - Class 2 |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.20 |
% |
0.90 |
% |
13.17 |
17.92 |
144,089 |
2,424,087 |
-16.20 |
% |
-15.74 |
% |
2.75 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.35 |
% |
0.90 |
% |
15.62 |
21.27 |
176,813 |
3,551,352 |
15.65 |
% |
16.28 |
% |
2.66 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.35 |
% |
0.90 |
% |
13.44 |
18.29 |
185,516 |
3,196,546 |
6.22 |
% |
6.80 |
% |
1.77 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.35 |
% |
0.90 |
% |
12.58 |
17.13 |
199,035 |
3,224,608 |
-7.33 |
% |
-6.82 |
% |
3.21 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.35 |
% |
0.90 |
% |
13.50 |
18.38 |
213,613 |
3,732,201 |
-11.93 |
% |
-11.44 |
% |
1.85 |
% |
|||||||||||||||||||||||||||||||||
M-50
Lincoln Life Flexible Premium Variable Life Account M
Notes to financial statements (continued)
3. Financial Highlights (continued)
|
Subaccount |
Year |
Commencement Date(1) |
Minimum Fee Rate(2) |
Maximum Fee Rate(2) |
Minimum Unit Value(3) |
Maximum Unit Value(3) |
Units Outstanding |
Net Assets |
Minimum Total Return(4) |
Maximum Total Return(4) |
Investment Income Ratio(5) |
||||||||||||||||||||||||||||||||||||
|
Templeton Global Bond VIP Fund - Class 1 |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.10 |
% |
0.90 |
% |
$ |
9.93 |
$ |
19.89 |
4,419,850 |
$ |
45,191,049 |
1.29 |
% |
2.11 |
% |
0.00 |
% |
||||||||||||||||||||||||||||||
|
2017 |
0.10 |
% |
0.90 |
% |
9.80 |
20.65 |
3,445,917 |
35,923,359 |
1.24 |
% |
2.05 |
% |
0.00 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.10 |
% |
0.90 |
% |
9.68 |
20.32 |
2,513,859 |
27,617,345 |
2.28 |
% |
3.11 |
% |
0.00 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.10 |
% |
0.90 |
% |
9.46 |
19.79 |
1,769,053 |
20,771,703 |
-4.96 |
% |
-4.20 |
% |
7.70 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.10 |
% |
0.90 |
% |
11.23 |
20.74 |
948,758 |
14,501,524 |
1.21 |
% |
2.02 |
% |
5.02 |
% |
|||||||||||||||||||||||||||||||||
|
Templeton Growth VIP Fund - Class 1 |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.20 |
% |
0.90 |
% |
9.71 |
19.75 |
490,276 |
6,554,218 |
-15.37 |
% |
-14.78 |
% |
2.21 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.20 |
% |
0.90 |
% |
11.39 |
23.25 |
533,581 |
8,450,952 |
17.70 |
% |
18.53 |
% |
1.82 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.20 |
% |
0.90 |
% |
9.61 |
19.69 |
548,239 |
7,464,657 |
8.91 |
% |
9.68 |
% |
2.12 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.20 |
% |
0.90 |
% |
8.76 |
18.01 |
532,039 |
7,129,446 |
-7.08 |
% |
-6.42 |
% |
2.84 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.20 |
% |
0.90 |
% |
14.55 |
19.32 |
496,218 |
7,828,321 |
-3.40 |
% |
-2.87 |
% |
1.56 |
% |
|||||||||||||||||||||||||||||||||
|
Templeton Growth VIP Fund - Class 2 |
|||||||||||||||||||||||||||||||||||||||||||||||
|
2018 |
0.20 |
% |
0.90 |
% |
16.39 |
21.94 |
46,939 |
1,016,502 |
-15.62 |
% |
-15.15 |
% |
1.96 |
% |
|||||||||||||||||||||||||||||||||
|
2017 |
0.35 |
% |
0.90 |
% |
19.32 |
26.01 |
49,953 |
1,257,677 |
17.45 |
% |
18.09 |
% |
1.60 |
% |
|||||||||||||||||||||||||||||||||
|
2016 |
0.35 |
% |
0.90 |
% |
16.36 |
22.14 |
49,937 |
1,083,095 |
8.64 |
% |
9.24 |
% |
1.91 |
% |
|||||||||||||||||||||||||||||||||
|
2015 |
0.35 |
% |
0.90 |
% |
14.98 |
20.38 |
52,807 |
1,036,630 |
-7.32 |
% |
-6.81 |
% |
2.58 |
% |
|||||||||||||||||||||||||||||||||
|
2014 |
0.35 |
% |
0.90 |
% |
16.07 |
21.99 |
54,026 |
1,140,309 |
-3.69 |
% |
-3.15 |
% |
1.39 |
% |
|||||||||||||||||||||||||||||||||
(1) Reflects less than a full year of activity. Funds were first received in this option on the commencement date noted or the option was inactive at the date funds were received thereby a succeeding commencement date is disclosed.
(2) These amounts represent the annualized minimum and maximum contract expenses of the separate account, consisting primarily of mortality and expense charges, for only those subaccounts which contain investments as of the respective year end. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the underlying funds have been excluded.
(3) As the unit value is presented as a range of minimum to maximum values for only those subaccounts which existed for the entire year, some individual contract unit values may not be within the ranges presented as a result of partial year activity.
(4) These amounts represent the total return, including changes in value of mutual funds, and reflect deductions for all items included in the fee rate. The total return does not include contract charges deducted directly from policy account values. The total return is not annualized. As the total return is presented as a range of minimum to maximum values, for only those subaccounts which existed for the entire year, some individual contract total returns may not be within the ranges presented as a result of partial year activity.
(5) These amounts represent the dividends, excluding distributions of capital gains, received by the subaccount from the underlying mutual fund, net of management fees assessed by the fund manager, divided by the average net assets. These ratios exclude those expenses, such as mortality and expense guarantee charges, that result in direct reductions in the unit values. The recognition of investment income by the subaccount is affected by the timing of the declaration of dividends by the underlying fund in which the subaccounts invest. Investment income ratios are not annualized.
Note: Fee rate, unit value and total return minimum and maximum are the same where there is only one active contract level charge for the subaccount.
M-51
Lincoln Life Flexible Premium Variable Life Account M
Notes to financial statements (continued)
4. Purchases and Sales of Investments
The aggregate cost of investments purchased and the aggregate proceeds from investments sold were as follows for 2018:
|
Aggregate Cost of Purchases |
Aggregate Proceeds from Sales |
||||||||||
|
AB VPS Global Thematic Growth Portfolio - Class A |
$ |
1,848,899 |
$ |
1,424,899 |
|||||||
|
AB VPS Growth and Income Portfolio - Class A |
2,738,473 |
3,457,864 |
|||||||||
|
AB VPS International Value Portfolio - Class A |
1,101,790 |
473,748 |
|||||||||
|
AB VPS Large Cap Growth Portfolio - Class A |
1,260,116 |
577,189 |
|||||||||
|
AB VPS Small/Mid Cap Value Portfolio - Class A |
9,147,827 |
2,991,337 |
|||||||||
|
American Century VP Balanced Fund - Class I |
13,985,176 |
1,360,823 |
|||||||||
|
American Century VP Inflation Protection Fund - Class I |
947,929 |
1,503,512 |
|||||||||
|
American Funds Global Growth Fund - Class 2 |
29,817,921 |
3,040,349 |
|||||||||
|
American Funds Global Small Capitalization Fund - Class 2 |
13,813,296 |
2,745,940 |
|||||||||
|
American Funds Growth Fund - Class 2 |
66,155,913 |
16,940,556 |
|||||||||
|
American Funds Growth-Income Fund - Class 2 |
62,203,611 |
14,706,512 |
|||||||||
|
American Funds International Fund - Class 2 |
40,170,050 |
4,800,190 |
|||||||||
|
BlackRock Global Allocation V.I. Fund - Class I |
31,587,562 |
7,785,695 |
|||||||||
|
ClearBridge Variable Mid Cap Portfolio - Class I |
6,747,754 |
943,220 |
|||||||||
|
Delaware VIP® Diversified Income Series - Standard Class |
11,605,540 |
5,251,128 |
|||||||||
|
Delaware VIP® Emerging Markets Series - Standard Class |
24,548,689 |
3,275,667 |
|||||||||
|
Delaware VIP® High Yield Series - Standard Class |
4,439,848 |
5,715,814 |
|||||||||
|
Delaware VIP® Limited-Term Diversified Income Series - Standard Class |
15,477,635 |
2,985,157 |
|||||||||
|
Delaware VIP® REIT Series - Standard Class |
8,716,525 |
6,031,004 |
|||||||||
|
Delaware VIP® Small Cap Value Series - Standard Class |
17,836,356 |
5,780,695 |
|||||||||
|
Delaware VIP® Smid Cap Core Series - Standard Class |
28,689,163 |
3,418,472 |
|||||||||
|
Delaware VIP® U.S. Growth Series - Standard Class |
5,221,458 |
2,485,661 |
|||||||||
|
Delaware VIP® Value Series - Standard Class |
10,586,055 |
4,641,305 |
|||||||||
|
DWS Alternative Asset Allocation VIP Portfolio - Class A |
2,004,511 |
971,967 |
|||||||||
|
DWS Equity 500 Index VIP Portfolio - Class A |
5,306,396 |
5,400,779 |
|||||||||
|
DWS Small Cap Index VIP Portfolio - Class A |
1,192,054 |
1,474,903 |
|||||||||
|
Fidelity® VIP Asset Manager Portfolio - Initial Class |
62,338 |
78,354 |
|||||||||
|
Fidelity® VIP Contrafund® Portfolio - Service Class |
33,964,956 |
6,589,940 |
|||||||||
|
Fidelity® VIP Equity-Income Portfolio - Initial Class |
162,685 |
301,658 |
|||||||||
|
Fidelity® VIP Equity-Income Portfolio - Service Class |
529,121 |
811,516 |
|||||||||
|
Fidelity® VIP Growth Opportunities Portfolio - Service Class |
390,247 |
485,727 |
|||||||||
|
Fidelity® VIP Growth Portfolio - Service Class |
15,734,629 |
3,987,918 |
|||||||||
|
Fidelity® VIP High Income Portfolio - Service Class |
181,857 |
102,467 |
|||||||||
|
Fidelity® VIP Investment Grade Bond Portfolio - Initial Class |
113,511 |
240,650 |
|||||||||
|
Fidelity® VIP Mid Cap Portfolio - Service Class |
16,272,957 |
3,065,541 |
|||||||||
|
Fidelity® VIP Overseas Portfolio - Service Class |
537,072 |
707,679 |
|||||||||
|
Franklin Income VIP Fund - Class 1 |
13,677,133 |
6,512,515 |
|||||||||
|
Franklin Mutual Shares VIP Fund - Class 1 |
7,601,658 |
1,670,554 |
|||||||||
|
Franklin Small-Mid Cap Growth VIP Fund - Class 1 |
2,099,899 |
2,257,093 |
|||||||||
|
Invesco V.I. American Franchise Fund - Series I Shares |
1,067,642 |
1,274,831 |
|||||||||
|
Invesco V.I. Core Equity Fund - Series I Shares |
1,505,293 |
1,524,614 |
|||||||||
|
Invesco V.I. Core Plus Bond Fund - Series I Shares |
407,379 |
44,892 |
|||||||||
|
Invesco V.I. International Growth Fund - Series I Shares |
4,620,812 |
974,206 |
|||||||||
|
Janus Henderson Balanced Portfolio - Institutional Shares |
709,961 |
1,118,645 |
|||||||||
|
Janus Henderson Balanced Portfolio - Service Shares |
616,662 |
939,056 |
|||||||||
|
Janus Henderson Enterprise Portfolio - Service Shares |
838,053 |
1,148,329 |
|||||||||
|
Janus Henderson Global Research Portfolio - Institutional Shares |
277,988 |
1,039,429 |
|||||||||
|
Janus Henderson Global Research Portfolio - Service Shares |
134,648 |
279,733 |
|||||||||
|
Janus Henderson Global Technology Portfolio - Service Shares |
428,751 |
306,557 |
|||||||||
|
JPMorgan Insurance Trust Global Allocation Portfolio - Class 1 |
14,602,526 |
755,919 |
|||||||||
|
LVIP Baron Growth Opportunities Fund - Service Class |
7,614,533 |
3,370,381 |
|||||||||
|
LVIP Baron Growth Opportunities Fund - Standard Class |
277,823 |
232,850 |
|||||||||
|
LVIP BlackRock Dividend Value Managed Volatility Fund - Standard Class |
2,648,833 |
2,799,074 |
|||||||||
|
LVIP BlackRock Global Growth ETF Allocation Managed Risk Fund - Standard Class |
11,781,891 |
1,719,711 |
|||||||||
|
LVIP BlackRock Inflation Protected Bond Fund - Standard Class |
8,073,763 |
2,484,351 |
|||||||||
|
LVIP BlackRock U.S. Growth ETF Allocation Managed Risk Fund - Standard Class |
2,208,248 |
306,615 |
|||||||||
|
LVIP Blended Large Cap Growth Managed Volatility Fund - Standard Class |
1,269,531 |
565,670 |
|||||||||
|
LVIP Blended Mid Cap Managed Volatility Fund - Standard Class |
541,975 |
885,876 |
|||||||||
|
LVIP Clarion Global Real Estate Fund - Standard Class |
3,748,213 |
1,382,357 |
|||||||||
M-52
Lincoln Life Flexible Premium Variable Life Account M
Notes to financial statements (continued)
4. Purchases and Sales of Investments (continued)
|
Aggregate Cost of Purchases |
Aggregate Proceeds from Sales |
||||||||||
|
LVIP ClearBridge Large Cap Managed Volatility Fund - Standard Class |
$ |
146,872 |
$ |
150,494 |
|||||||
|
LVIP Delaware Bond Fund - Standard Class |
24,164,109 |
7,959,272 |
|||||||||
|
LVIP Delaware Diversified Floating Rate Fund - Standard Class |
6,189,682 |
2,265,654 |
|||||||||
|
LVIP Delaware Social Awareness Fund - Standard Class |
1,851,209 |
788,318 |
|||||||||
|
LVIP Delaware Special Opportunities Fund - Standard Class |
4,382,860 |
887,704 |
|||||||||
|
LVIP Delaware Wealth Builder Fund - Standard Class |
807,968 |
560,647 |
|||||||||
|
LVIP Dimensional International Core Equity Fund - Standard Class |
9,935,635 |
923,887 |
|||||||||
|
LVIP Dimensional International Equity Managed Volatility Fund - Standard Class |
1,572,786 |
475,239 |
|||||||||
|
LVIP Dimensional U.S. Core Equity 1 Fund - Standard Class |
8,658,708 |
2,094,800 |
|||||||||
|
LVIP Dimensional U.S. Core Equity 2 Fund - Standard Class |
10,709,114 |
1,088,765 |
|||||||||
|
LVIP Dimensional U.S. Equity Managed Volatility Fund - Standard Class |
881,373 |
1,999,960 |
|||||||||
|
LVIP Dimensional/Vanguard Total Bond Fund - Standard Class |
20,324,938 |
5,104,507 |
|||||||||
|
LVIP Franklin Templeton Global Equity Managed Volatility Fund - Standard Class |
565,856 |
414,974 |
|||||||||
|
LVIP Global Conservative Allocation Managed Risk Fund - Standard Class |
7,807,271 |
2,028,762 |
|||||||||
|
LVIP Global Growth Allocation Managed Risk Fund - Standard Class |
10,368,592 |
5,715,748 |
|||||||||
|
LVIP Global Income Fund - Standard Class |
2,128,368 |
1,433,247 |
|||||||||
|
LVIP Global Moderate Allocation Managed Risk Fund - Standard Class |
8,397,906 |
11,036,952 |
|||||||||
|
LVIP Government Money Market Fund - Standard Class |
312,621,522 |
297,024,910 |
|||||||||
|
LVIP Invesco Diversified Equity-Income Managed Volatility Fund - Standard Class |
265,654 |
90,732 |
|||||||||
|
LVIP JPMorgan High Yield Fund - Standard Class |
13,478,907 |
6,902,038 |
|||||||||
|
LVIP JPMorgan Select Mid Cap Value Managed Volatility Fund - Standard Class |
989,980 |
720,562 |
|||||||||
|
LVIP MFS International Growth Fund - Standard Class |
8,471,342 |
1,864,663 |
|||||||||
|
LVIP MFS Value Fund - Standard Class |
19,618,623 |
3,546,593 |
|||||||||
|
LVIP Mondrian International Value Fund - Standard Class |
6,099,595 |
2,264,735 |
|||||||||
|
LVIP Multi-Manager Global Equity Managed Volatility Fund - Standard Class |
83,796 |
232,229 |
|||||||||
|
LVIP SSGA Bond Index Fund - Standard Class |
18,649,389 |
3,266,555 |
|||||||||
|
LVIP SSGA Conservative Index Allocation Fund - Standard Class |
4,785,784 |
1,606,250 |
|||||||||
|
LVIP SSGA Conservative Structured Allocation Fund - Standard Class |
1,558,315 |
617,300 |
|||||||||
|
LVIP SSGA Developed International 150 Fund - Standard Class |
11,737,972 |
600,003 |
|||||||||
|
LVIP SSGA Emerging Markets 100 Fund - Standard Class |
17,033,726 |
1,661,999 |
|||||||||
|
LVIP SSGA Global Tactical Allocation Managed Volatility Fund - Standard Class |
1,810,251 |
1,277,427 |
|||||||||
|
LVIP SSGA International Index Fund - Standard Class |
14,894,726 |
618,778 |
|||||||||
|
LVIP SSGA International Managed Volatility Fund - Standard Class |
914,605 |
327,799 |
|||||||||
|
LVIP SSGA Large Cap 100 Fund - Standard Class |
10,978,799 |
1,752,285 |
|||||||||
|
LVIP SSGA Moderate Index Allocation Fund - Standard Class |
21,492,291 |
3,661,286 |
|||||||||
|
LVIP SSGA Moderate Structured Allocation Fund - Standard Class |
11,287,894 |
4,286,749 |
|||||||||
|
LVIP SSGA Moderately Aggressive Index Allocation Fund - Standard Class |
22,010,779 |
5,125,604 |
|||||||||
|
LVIP SSGA Moderately Aggressive Structured Allocation Fund - Standard Class |
12,425,318 |
2,942,106 |
|||||||||
|
LVIP SSGA S&P 500 Index Fund - Standard Class |
134,264,506 |
7,131,708 |
|||||||||
|
LVIP SSGA Small-Cap Index Fund - Standard Class |
17,488,853 |
4,030,891 |
|||||||||
|
LVIP SSGA Small-Mid Cap 200 Fund - Standard Class |
14,791,411 |
2,354,399 |
|||||||||
|
LVIP T. Rowe Price 2010 Fund - Standard Class |
37,029 |
17,260 |
|||||||||
|
LVIP T. Rowe Price 2020 Fund - Standard Class |
262,843 |
184,265 |
|||||||||
|
LVIP T. Rowe Price 2030 Fund - Standard Class |
169,769 |
79,876 |
|||||||||
|
LVIP T. Rowe Price 2040 Fund - Standard Class |
423,065 |
554,179 |
|||||||||
|
LVIP T. Rowe Price Growth Stock Fund - Standard Class |
18,476,182 |
2,226,432 |
|||||||||
|
LVIP T. Rowe Price Structured Mid-Cap Growth Fund - Standard Class |
9,182,434 |
1,116,283 |
|||||||||
|
LVIP U.S. Growth Allocation Managed Risk Fund - Standard Class |
7,105,937 |
1,089,620 |
|||||||||
|
LVIP Vanguard Domestic Equity ETF Fund - Standard Class |
27,258,816 |
5,380,941 |
|||||||||
|
LVIP Vanguard International Equity ETF Fund - Standard Class |
22,366,565 |
1,346,463 |
|||||||||
|
LVIP Wellington Capital Growth Fund - Standard Class |
10,912,320 |
1,781,606 |
|||||||||
|
LVIP Wellington Mid-Cap Value Fund - Standard Class |
6,500,510 |
816,837 |
|||||||||
|
M Capital Appreciation Fund |
504,066 |
116,630 |
|||||||||
|
M International Equity Fund |
349,273 |
137,001 |
|||||||||
|
M Large Cap Growth Fund |
552,669 |
300,064 |
|||||||||
|
M Large Cap Value Fund |
471,862 |
226,462 |
|||||||||
|
MFS® VIT Growth Series - Initial Class |
12,500,763 |
3,478,196 |
|||||||||
|
MFS® VIT Total Return Series - Initial Class |
12,573,979 |
2,378,187 |
|||||||||
|
MFS® VIT Utilities Series - Initial Class |
2,917,354 |
4,895,047 |
|||||||||
|
MFS® VIT II Core Equity Portfolio - Initial Class |
177,229 |
134,833 |
|||||||||
|
Neuberger Berman AMT Large Cap Value Portfolio - I Class |
241,191 |
309,496 |
|||||||||
|
Neuberger Berman AMT Mid Cap Growth Portfolio - I Class |
1,621,708 |
2,427,184 |
|||||||||
M-53
Lincoln Life Flexible Premium Variable Life Account M
Notes to financial statements (continued)
4. Purchases and Sales of Investments (continued)
|
Aggregate Cost of Purchases |
Aggregate Proceeds from Sales |
||||||||||
|
Neuberger Berman AMT Mid Cap Intrinsic Value Portfolio - I Class |
$ |
578,944 |
$ |
687,099 |
|||||||
|
PIMCO VIT CommodityRealReturn® Strategy Portfolio - Administrative Class |
4,440,352 |
1,401,044 |
|||||||||
|
Putnam VT Equity Income Fund - Class IB |
168,153 |
203,713 |
|||||||||
|
Putnam VT Global Health Care Fund - Class IB |
373,150 |
226,464 |
|||||||||
|
Templeton Foreign VIP Fund - Class 1 |
114,716 |
146,082 |
|||||||||
|
Templeton Foreign VIP Fund - Class 2 |
257,910 |
775,035 |
|||||||||
|
Templeton Global Bond VIP Fund - Class 1 |
11,404,218 |
3,133,105 |
|||||||||
|
Templeton Growth VIP Fund - Class 1 |
1,218,077 |
1,103,720 |
|||||||||
|
Templeton Growth VIP Fund - Class 2 |
195,783 |
137,443 |
|||||||||
5. Investments
The following is a summary of investments owned at December 31, 2018
|
Shares Owned |
Net Asset Value |
Fair Value of Shares |
Cost of Shares |
||||||||||||||||
|
AB VPS Global Thematic Growth Portfolio - Class A |
297,961 |
$ |
27.35 |
$ |
8,149,241 |
$ |
7,311,263 |
||||||||||||
|
AB VPS Growth and Income Portfolio - Class A |
603,593 |
27.78 |
16,767,801 |
16,474,891 |
|||||||||||||||
|
AB VPS International Value Portfolio - Class A |
680,351 |
12.38 |
8,422,740 |
9,831,637 |
|||||||||||||||
|
AB VPS Large Cap Growth Portfolio - Class A |
63,976 |
51.75 |
3,310,742 |
3,052,404 |
|||||||||||||||
|
AB VPS Small/Mid Cap Value Portfolio - Class A |
2,336,437 |
16.93 |
39,555,875 |
46,460,151 |
|||||||||||||||
|
American Century VP Balanced Fund - Class I |
2,595,005 |
7.09 |
18,398,584 |
18,911,709 |
|||||||||||||||
|
American Century VP Inflation Protection Fund - Class I |
1,158,985 |
9.66 |
11,195,792 |
12,013,029 |
|||||||||||||||
|
American Funds Global Growth Fund - Class 2 |
3,783,233 |
25.50 |
96,472,446 |
103,066,440 |
|||||||||||||||
|
American Funds Global Small Capitalization Fund - Class 2 |
3,572,873 |
21.16 |
75,601,984 |
81,845,020 |
|||||||||||||||
|
American Funds Growth Fund - Class 2 |
4,270,439 |
69.48 |
296,710,079 |
301,048,017 |
|||||||||||||||
|
American Funds Growth-Income Fund - Class 2 |
6,777,621 |
44.90 |
304,315,172 |
311,140,604 |
|||||||||||||||
|
American Funds International Fund - Class 2 |
9,697,311 |
17.60 |
170,672,669 |
186,936,885 |
|||||||||||||||
|
BlackRock Global Allocation V.I. Fund - Class I |
12,629,824 |
15.19 |
191,847,033 |
209,084,911 |
|||||||||||||||
|
ClearBridge Variable Mid Cap Portfolio - Class I |
925,385 |
17.26 |
15,972,149 |
18,161,308 |
|||||||||||||||
|
Delaware VIP® Diversified Income Series - Standard Class |
6,801,632 |
9.99 |
67,948,297 |
71,224,462 |
|||||||||||||||
|
Delaware VIP® Emerging Markets Series - Standard Class |
3,841,207 |
20.36 |
78,206,973 |
79,087,485 |
|||||||||||||||
|
Delaware VIP® High Yield Series - Standard Class |
3,516,933 |
4.67 |
16,424,076 |
18,576,715 |
|||||||||||||||
|
Delaware VIP® Limited-Term Diversified Income Series - Standard Class |
6,222,244 |
9.59 |
59,671,316 |
61,149,556 |
|||||||||||||||
|
Delaware VIP® REIT Series - Standard Class |
4,269,904 |
11.85 |
50,598,364 |
58,043,141 |
|||||||||||||||
|
Delaware VIP® Small Cap Value Series - Standard Class |
2,024,280 |
32.76 |
66,315,421 |
74,630,835 |
|||||||||||||||
|
Delaware VIP® Smid Cap Core Series - Standard Class |
2,952,623 |
18.92 |
55,863,622 |
74,693,174 |
|||||||||||||||
|
Delaware VIP® U.S. Growth Series - Standard Class |
2,848,544 |
9.57 |
27,260,568 |
30,737,495 |
|||||||||||||||
|
Delaware VIP® Value Series - Standard Class |
2,158,636 |
28.31 |
61,110,976 |
60,002,055 |
|||||||||||||||
|
DWS Alternative Asset Allocation VIP Portfolio - Class A |
1,142,659 |
12.10 |
13,826,169 |
15,176,173 |
|||||||||||||||
|
DWS Equity 500 Index VIP Portfolio - Class A |
2,116,044 |
18.90 |
39,993,227 |
35,826,514 |
|||||||||||||||
|
DWS Small Cap Index VIP Portfolio - Class A |
619,141 |
14.97 |
9,268,536 |
9,246,263 |
|||||||||||||||
|
Fidelity® VIP Asset Manager Portfolio - Initial Class |
39,829 |
13.68 |
544,863 |
598,437 |
|||||||||||||||
|
Fidelity® VIP Contrafund® Portfolio - Service Class |
5,530,236 |
31.97 |
176,801,649 |
181,788,933 |
|||||||||||||||
|
Fidelity® VIP Equity-Income Portfolio - Initial Class |
80,961 |
20.37 |
1,649,169 |
1,650,707 |
|||||||||||||||
|
Fidelity® VIP Equity-Income Portfolio - Service Class |
255,349 |
20.26 |
5,173,370 |
5,505,079 |
|||||||||||||||
|
Fidelity® VIP Growth Opportunities Portfolio - Service Class |
91,718 |
37.95 |
3,480,694 |
2,238,838 |
|||||||||||||||
|
Fidelity® VIP Growth Portfolio - Service Class |
662,262 |
62.83 |
41,609,947 |
41,355,963 |
|||||||||||||||
|
Fidelity® VIP High Income Portfolio - Service Class |
332,932 |
4.93 |
1,641,353 |
1,841,378 |
|||||||||||||||
|
Fidelity® VIP Investment Grade Bond Portfolio - Initial Class |
73,715 |
12.34 |
909,640 |
952,964 |
|||||||||||||||
|
Fidelity® VIP Mid Cap Portfolio - Service Class |
2,392,991 |
29.90 |
71,550,422 |
81,798,282 |
|||||||||||||||
|
Fidelity® VIP Overseas Portfolio - Service Class |
304,116 |
19.05 |
5,793,406 |
5,847,547 |
|||||||||||||||
|
Franklin Income VIP Fund - Class 1 |
5,138,802 |
15.26 |
78,418,122 |
82,137,109 |
|||||||||||||||
|
Franklin Mutual Shares VIP Fund - Class 1 |
2,698,833 |
17.71 |
47,796,336 |
54,269,197 |
|||||||||||||||
|
Franklin Small-Mid Cap Growth VIP Fund - Class 1 |
731,856 |
17.04 |
12,470,823 |
14,945,137 |
|||||||||||||||
|
Invesco V.I. American Franchise Fund - Series I Shares |
182,298 |
57.15 |
10,418,327 |
8,276,814 |
|||||||||||||||
|
Invesco V.I. Core Equity Fund - Series I Shares |
403,698 |
30.94 |
12,490,411 |
12,172,824 |
|||||||||||||||
|
Invesco V.I. Core Plus Bond Fund - Series I Shares |
158,555 |
6.00 |
951,330 |
981,206 |
|||||||||||||||
|
Invesco V.I. International Growth Fund - Series I Shares |
682,180 |
32.98 |
22,498,289 |
23,482,416 |
|||||||||||||||
|
Janus Henderson Balanced Portfolio - Institutional Shares |
251,443 |
33.75 |
8,486,198 |
7,147,028 |
|||||||||||||||
M-54
Lincoln Life Flexible Premium Variable Life Account M
Notes to financial statements (continued)
5. Investments (continued)
|
Shares Owned |
Net Asset Value |
Fair Value of Shares |
Cost of Shares |
||||||||||||||||
|
Janus Henderson Balanced Portfolio - Service Shares |
225,604 |
$ |
35.59 |
$ |
8,029,232 |
$ |
6,967,007 |
||||||||||||
|
Janus Henderson Enterprise Portfolio - Service Shares |
74,544 |
62.99 |
4,695,533 |
4,066,420 |
|||||||||||||||
|
Janus Henderson Global Research Portfolio - Institutional Shares |
166,231 |
47.13 |
7,834,463 |
5,143,131 |
|||||||||||||||
|
Janus Henderson Global Research Portfolio - Service Shares |
38,775 |
46.15 |
1,789,455 |
1,337,249 |
|||||||||||||||
|
Janus Henderson Global Technology Portfolio - Service Shares |
236,459 |
11.19 |
2,645,972 |
1,930,871 |
|||||||||||||||
|
JPMorgan Insurance Trust Global Allocation Portfolio - Class 1 |
1,232,736 |
15.47 |
19,070,428 |
20,034,728 |
|||||||||||||||
|
LVIP Baron Growth Opportunities Fund - Service Class |
767,620 |
45.34 |
34,801,577 |
34,287,781 |
|||||||||||||||
|
LVIP Baron Growth Opportunities Fund - Standard Class |
25,672 |
46.70 |
1,198,904 |
1,161,875 |
|||||||||||||||
|
LVIP BlackRock Dividend Value Managed Volatility Fund - Standard Class |
1,989,641 |
18.79 |
37,383,368 |
34,537,414 |
|||||||||||||||
|
LVIP BlackRock Global Growth ETF Allocation Managed Risk Fund - Standard Class |
1,573,395 |
10.84 |
17,060,325 |
17,742,114 |
|||||||||||||||
|
LVIP BlackRock Inflation Protected Bond Fund - Standard Class |
3,228,128 |
9.71 |
31,341,896 |
33,227,214 |
|||||||||||||||
|
LVIP BlackRock U.S. Growth ETF Allocation Managed Risk Fund - Standard Class |
378,287 |
11.22 |
4,245,896 |
4,276,844 |
|||||||||||||||
|
LVIP Blended Large Cap Growth Managed Volatility Fund - Standard Class |
242,378 |
32.69 |
7,923,343 |
6,963,584 |
|||||||||||||||
|
LVIP Blended Mid Cap Managed Volatility Fund - Standard Class |
540,346 |
15.02 |
8,114,373 |
6,950,473 |
|||||||||||||||
|
LVIP Clarion Global Real Estate Fund - Standard Class |
2,664,452 |
8.46 |
22,530,608 |
24,483,780 |
|||||||||||||||
|
LVIP ClearBridge Large Cap Managed Volatility Fund - Standard Class |
108,044 |
9.70 |
1,047,809 |
1,026,662 |
|||||||||||||||
|
LVIP Delaware Bond Fund - Standard Class |
11,734,808 |
13.06 |
153,221,387 |
161,426,437 |
|||||||||||||||
|
LVIP Delaware Diversified Floating Rate Fund - Standard Class |
2,574,534 |
9.83 |
25,307,672 |
26,057,681 |
|||||||||||||||
|
LVIP Delaware Social Awareness Fund - Standard Class |
204,940 |
33.40 |
6,845,208 |
7,977,936 |
|||||||||||||||
|
LVIP Delaware Special Opportunities Fund - Standard Class |
406,520 |
31.75 |
12,908,218 |
16,000,697 |
|||||||||||||||
|
LVIP Delaware Wealth Builder Fund - Standard Class |
232,969 |
11.02 |
2,566,155 |
3,163,265 |
|||||||||||||||
|
LVIP Dimensional International Core Equity Fund - Standard Class |
1,847,977 |
9.29 |
17,169,558 |
19,385,941 |
|||||||||||||||
|
LVIP Dimensional International Equity Managed Volatility Fund - Standard Class |
1,233,570 |
8.89 |
10,963,974 |
11,993,395 |
|||||||||||||||
|
LVIP Dimensional U.S. Core Equity 1 Fund - Standard Class |
668,554 |
28.53 |
19,076,534 |
20,575,758 |
|||||||||||||||
|
LVIP Dimensional U.S. Core Equity 2 Fund - Standard Class |
1,987,057 |
11.28 |
22,421,946 |
23,040,125 |
|||||||||||||||
|
LVIP Dimensional U.S. Equity Managed Volatility Fund - Standard Class |
856,605 |
13.94 |
11,943,648 |
11,479,001 |
|||||||||||||||
|
LVIP Dimensional/Vanguard Total Bond Fund - Standard Class |
6,942,675 |
10.27 |
71,287,387 |
73,093,174 |
|||||||||||||||
|
LVIP Franklin Templeton Global Equity Managed Volatility Fund - Standard Class |
231,468 |
32.18 |
7,448,642 |
7,373,445 |
|||||||||||||||
|
LVIP Global Conservative Allocation Managed Risk Fund - Standard Class |
3,216,196 |
13.10 |
42,122,524 |
44,191,347 |
|||||||||||||||
|
LVIP Global Growth Allocation Managed Risk Fund - Standard Class |
8,591,539 |
13.47 |
115,702,252 |
114,668,356 |
|||||||||||||||
|
LVIP Global Income Fund - Standard Class |
1,174,025 |
11.08 |
13,011,715 |
13,306,118 |
|||||||||||||||
|
LVIP Global Moderate Allocation Managed Risk Fund - Standard Class |
6,916,123 |
13.85 |
95,788,301 |
95,104,342 |
|||||||||||||||
|
LVIP Government Money Market Fund - Standard Class |
11,278,275 |
10.00 |
112,782,783 |
112,782,780 |
|||||||||||||||
|
LVIP Invesco Diversified Equity-Income Managed Volatility Fund - Standard Class |
162,246 |
9.76 |
1,583,195 |
1,667,343 |
|||||||||||||||
|
LVIP JPMorgan High Yield Fund - Standard Class |
4,759,388 |
9.89 |
47,075,106 |
52,384,340 |
|||||||||||||||
|
LVIP JPMorgan Select Mid Cap Value Managed Volatility Fund - Standard Class |
856,026 |
15.40 |
13,179,378 |
12,670,216 |
|||||||||||||||
|
LVIP MFS International Growth Fund - Standard Class |
2,226,272 |
16.02 |
35,660,419 |
33,876,524 |
|||||||||||||||
|
LVIP MFS Value Fund - Standard Class |
2,635,517 |
36.80 |
96,981,770 |
97,703,525 |
|||||||||||||||
|
LVIP Mondrian International Value Fund - Standard Class |
2,375,929 |
15.21 |
36,133,128 |
39,859,114 |
|||||||||||||||
|
LVIP Multi-Manager Global Equity Managed Volatility Fund - Standard Class |
28,126 |
9.18 |
258,057 |
280,329 |
|||||||||||||||
|
LVIP SSGA Bond Index Fund - Standard Class |
4,554,337 |
10.88 |
49,555,737 |
51,310,296 |
|||||||||||||||
|
LVIP SSGA Conservative Index Allocation Fund - Standard Class |
1,677,244 |
12.16 |
20,390,256 |
20,886,227 |
|||||||||||||||
|
LVIP SSGA Conservative Structured Allocation Fund - Standard Class |
1,104,794 |
10.98 |
12,133,953 |
13,020,484 |
|||||||||||||||
|
LVIP SSGA Developed International 150 Fund - Standard Class |
3,318,817 |
7.45 |
24,725,186 |
29,266,484 |
|||||||||||||||
|
LVIP SSGA Emerging Markets 100 Fund - Standard Class |
4,767,566 |
8.29 |
39,518,357 |
44,040,410 |
|||||||||||||||
|
LVIP SSGA Global Tactical Allocation Managed Volatility Fund - Standard Class |
1,956,095 |
11.03 |
21,567,904 |
22,701,022 |
|||||||||||||||
|
LVIP SSGA International Index Fund - Standard Class |
5,303,438 |
8.30 |
44,039,746 |
48,084,229 |
|||||||||||||||
|
LVIP SSGA International Managed Volatility Fund - Standard Class |
1,122,436 |
8.56 |
9,602,443 |
9,532,991 |
|||||||||||||||
|
LVIP SSGA Large Cap 100 Fund - Standard Class |
2,755,896 |
11.36 |
31,312,491 |
38,559,542 |
|||||||||||||||
|
LVIP SSGA Moderate Index Allocation Fund - Standard Class |
6,339,071 |
13.36 |
84,702,660 |
86,542,892 |
|||||||||||||||
|
LVIP SSGA Moderate Structured Allocation Fund - Standard Class |
5,372,230 |
11.66 |
62,634,827 |
67,564,377 |
|||||||||||||||
|
LVIP SSGA Moderately Aggressive Index Allocation Fund - Standard Class |
7,579,705 |
13.69 |
103,758,581 |
105,038,882 |
|||||||||||||||
|
LVIP SSGA Moderately Aggressive Structured Allocation Fund - Standard Class |
4,667,772 |
12.01 |
56,078,609 |
60,450,282 |
|||||||||||||||
|
LVIP SSGA S&P 500 Index Fund - Standard Class |
25,671,465 |
16.90 |
433,796,416 |
415,896,685 |
|||||||||||||||
|
LVIP SSGA Small-Cap Index Fund - Standard Class |
2,007,524 |
26.88 |
53,962,252 |
57,547,946 |
|||||||||||||||
|
LVIP SSGA Small-Mid Cap 200 Fund - Standard Class |
3,514,765 |
10.97 |
38,567,513 |
47,327,227 |
|||||||||||||||
|
LVIP T. Rowe Price 2010 Fund - Standard Class |
21,303 |
10.44 |
222,365 |
244,049 |
|||||||||||||||
|
LVIP T. Rowe Price 2020 Fund - Standard Class |
89,904 |
10.46 |
940,218 |
1,023,136 |
|||||||||||||||
|
LVIP T. Rowe Price 2030 Fund - Standard Class |
196,756 |
10.45 |
2,055,509 |
2,254,811 |
|||||||||||||||
|
LVIP T. Rowe Price 2040 Fund - Standard Class |
330,178 |
9.85 |
3,252,578 |
3,498,056 |
|||||||||||||||
|
LVIP T. Rowe Price Growth Stock Fund - Standard Class |
1,617,135 |
39.81 |
64,370,045 |
59,348,741 |
|||||||||||||||
M-55
Lincoln Life Flexible Premium Variable Life Account M
Notes to financial statements (continued)
5. Investments (continued)
|
Shares Owned |
Net Asset Value |
Fair Value of Shares |
Cost of Shares |
||||||||||||||||
|
LVIP T. Rowe Price Structured Mid-Cap Growth Fund - Standard Class |
1,471,791 |
$ |
23.26 |
$ |
34,232,396 |
$ |
34,062,300 |
||||||||||||
|
LVIP U.S. Growth Allocation Managed Risk Fund - Standard Class |
901,301 |
10.25 |
9,238,330 |
9,781,538 |
|||||||||||||||
|
LVIP Vanguard Domestic Equity ETF Fund - Standard Class |
5,394,476 |
17.55 |
94,667,665 |
88,326,975 |
|||||||||||||||
|
LVIP Vanguard International Equity ETF Fund - Standard Class |
6,963,590 |
9.65 |
67,163,828 |
71,870,924 |
|||||||||||||||
|
LVIP Wellington Capital Growth Fund - Standard Class |
668,623 |
43.56 |
29,122,560 |
28,080,873 |
|||||||||||||||
|
LVIP Wellington Mid-Cap Value Fund - Standard Class |
948,823 |
22.93 |
21,754,619 |
23,340,991 |
|||||||||||||||
|
M Capital Appreciation Fund |
66,001 |
21.14 |
1,395,260 |
1,823,500 |
|||||||||||||||
|
M International Equity Fund |
155,027 |
10.60 |
1,643,281 |
1,867,399 |
|||||||||||||||
|
M Large Cap Growth Fund |
119,164 |
22.85 |
2,722,900 |
2,829,159 |
|||||||||||||||
|
M Large Cap Value Fund |
182,173 |
11.06 |
2,014,829 |
2,363,621 |
|||||||||||||||
|
MFS® VIT Growth Series - Initial Class |
1,024,263 |
47.01 |
48,150,615 |
42,587,014 |
|||||||||||||||
|
MFS® VIT Total Return Series - Initial Class |
2,035,669 |
21.78 |
44,336,864 |
46,103,479 |
|||||||||||||||
|
MFS® VIT Utilities Series - Initial Class |
1,264,927 |
29.38 |
37,163,564 |
36,509,531 |
|||||||||||||||
|
MFS® VIT II Core Equity Portfolio - Initial Class |
42,488 |
21.68 |
921,139 |
997,491 |
|||||||||||||||
|
Neuberger Berman AMT Large Cap Value Portfolio - I Class |
96,413 |
14.58 |
1,405,695 |
1,320,777 |
|||||||||||||||
|
Neuberger Berman AMT Mid Cap Growth Portfolio - I Class |
656,323 |
24.09 |
15,810,823 |
16,453,111 |
|||||||||||||||
|
Neuberger Berman AMT Mid Cap Intrinsic Value Portfolio - I Class |
318,609 |
15.69 |
4,998,968 |
5,163,370 |
|||||||||||||||
|
PIMCO VIT CommodityRealReturn® Strategy Portfolio - Administrative Class |
3,715,445 |
6.02 |
22,366,975 |
31,986,838 |
|||||||||||||||
|
Putnam VT Equity Income Fund - Class IB |
62,412 |
23.12 |
1,442,976 |
1,482,652 |
|||||||||||||||
|
Putnam VT Global Health Care Fund - Class IB |
126,566 |
13.44 |
1,701,053 |
1,994,254 |
|||||||||||||||
|
Templeton Foreign VIP Fund - Class 1 |
83,274 |
13.01 |
1,083,397 |
1,206,511 |
|||||||||||||||
|
Templeton Foreign VIP Fund - Class 2 |
190,163 |
12.74 |
2,422,671 |
2,664,975 |
|||||||||||||||
|
Templeton Global Bond VIP Fund - Class 1 |
2,570,959 |
17.54 |
45,094,625 |
44,202,812 |
|||||||||||||||
|
Templeton Growth VIP Fund - Class 1 |
526,670 |
12.44 |
6,551,777 |
7,179,349 |
|||||||||||||||
|
Templeton Growth VIP Fund - Class 2 |
83,255 |
12.21 |
1,016,543 |
1,032,174 |
|||||||||||||||
6. Changes in Units Outstanding
The change in units outstanding for the year ended December 31, 2018, is as follows:
|
Units Issued |
Units Redeemed |
Net Increase (Decrease) |
|||||||||||||
|
AB VPS Global Thematic Growth Portfolio - Class A |
134,294 |
(83,202 |
) |
51,092 |
|||||||||||
|
AB VPS Growth and Income Portfolio - Class A |
34,559 |
(169,717 |
) |
(135,158 |
) |
||||||||||
|
AB VPS International Value Portfolio - Class A |
78,948 |
(57,801 |
) |
21,147 |
|||||||||||
|
AB VPS Large Cap Growth Portfolio - Class A |
41,337 |
(20,249 |
) |
21,088 |
|||||||||||
|
AB VPS Small/Mid Cap Value Portfolio - Class A |
412,473 |
(121,192 |
) |
291,281 |
|||||||||||
|
American Century VP Balanced Fund - Class I |
1,201,545 |
(108,422 |
) |
1,093,123 |
|||||||||||
|
American Century VP Inflation Protection Fund - Class I |
81,512 |
(121,730 |
) |
(40,218 |
) |
||||||||||
|
American Funds Global Growth Fund - Class 2 |
1,661,396 |
(157,857 |
) |
1,503,539 |
|||||||||||
|
American Funds Global Small Capitalization Fund - Class 2 |
855,785 |
(116,540 |
) |
739,245 |
|||||||||||
|
American Funds Growth Fund - Class 2 |
2,283,882 |
(621,559 |
) |
1,662,323 |
|||||||||||
|
American Funds Growth-Income Fund - Class 2 |
2,660,887 |
(555,065 |
) |
2,105,822 |
|||||||||||
|
American Funds International Fund - Class 2 |
2,399,444 |
(230,176 |
) |
2,169,268 |
|||||||||||
|
BlackRock Global Allocation V.I. Fund - Class I |
1,941,589 |
(533,295 |
) |
1,408,294 |
|||||||||||
|
ClearBridge Variable Mid Cap Portfolio - Class I |
505,331 |
(67,810 |
) |
437,521 |
|||||||||||
|
Delaware VIP® Diversified Income Series - Standard Class |
978,661 |
(437,401 |
) |
541,260 |
|||||||||||
|
Delaware VIP® Emerging Markets Series - Standard Class |
1,824,234 |
(193,622 |
) |
1,630,612 |
|||||||||||
|
Delaware VIP® High Yield Series - Standard Class |
298,052 |
(393,438 |
) |
(95,386 |
) |
||||||||||
|
Delaware VIP® Limited-Term Diversified Income Series - Standard Class |
1,393,752 |
(285,190 |
) |
1,108,562 |
|||||||||||
|
Delaware VIP® REIT Series - Standard Class |
478,228 |
(348,635 |
) |
129,593 |
|||||||||||
|
Delaware VIP® Small Cap Value Series - Standard Class |
888,008 |
(220,362 |
) |
667,646 |
|||||||||||
|
Delaware VIP® Smid Cap Core Series - Standard Class |
773,260 |
(163,068 |
) |
610,192 |
|||||||||||
|
Delaware VIP® U.S. Growth Series - Standard Class |
98,567 |
(105,494 |
) |
(6,927 |
) |
||||||||||
|
Delaware VIP® Value Series - Standard Class |
413,589 |
(193,185 |
) |
220,404 |
|||||||||||
|
DWS Alternative Asset Allocation VIP Portfolio - Class A |
169,545 |
(88,463 |
) |
81,082 |
|||||||||||
|
DWS Equity 500 Index VIP Portfolio - Class A |
27,701 |
(196,614 |
) |
(168,913 |
) |
||||||||||
|
DWS Small Cap Index VIP Portfolio - Class A |
15,946 |
(54,995 |
) |
(39,049 |
) |
||||||||||
|
Fidelity® VIP Asset Manager Portfolio - Initial Class |
1,608 |
(3,813 |
) |
(2,205 |
) |
||||||||||
|
Fidelity® VIP Contrafund® Portfolio - Service Class |
1,315,652 |
(265,775 |
) |
1,049,877 |
|||||||||||
M-56
Lincoln Life Flexible Premium Variable Life Account M
Notes to financial statements (continued)
6. Changes in Units Outstanding (continued)
|
Units Issued |
Units Redeemed |
Net Increase (Decrease) |
|||||||||||||
|
Fidelity® VIP Equity-Income Portfolio - Initial Class |
1,611 |
(10,730 |
) |
(9,119 |
) |
||||||||||
|
Fidelity® VIP Equity-Income Portfolio - Service Class |
6,094 |
(42,470 |
) |
(36,376 |
) |
||||||||||
|
Fidelity® VIP Growth Opportunities Portfolio - Service Class |
4,642 |
(11,758 |
) |
(7,116 |
) |
||||||||||
|
Fidelity® VIP Growth Portfolio - Service Class |
678,706 |
(195,120 |
) |
483,586 |
|||||||||||
|
Fidelity® VIP High Income Portfolio - Service Class |
4,577 |
(4,826 |
) |
(249 |
) |
||||||||||
|
Fidelity® VIP Investment Grade Bond Portfolio - Initial Class |
6,077 |
(16,803 |
) |
(10,726 |
) |
||||||||||
|
Fidelity® VIP Mid Cap Portfolio - Service Class |
756,835 |
(164,659 |
) |
592,176 |
|||||||||||
|
Fidelity® VIP Overseas Portfolio - Service Class |
42,161 |
(41,346 |
) |
815 |
|||||||||||
|
Franklin Income VIP Fund - Class 1 |
878,772 |
(438,086 |
) |
440,686 |
|||||||||||
|
Franklin Mutual Shares VIP Fund - Class 1 |
368,321 |
(86,954 |
) |
281,367 |
|||||||||||
|
Franklin Small-Mid Cap Growth VIP Fund - Class 1 |
71,481 |
(107,506 |
) |
(36,025 |
) |
||||||||||
|
Invesco V.I. American Franchise Fund - Series I Shares |
12,471 |
(49,864 |
) |
(37,393 |
) |
||||||||||
|
Invesco V.I. Core Equity Fund - Series I Shares |
24,350 |
(63,012 |
) |
(38,662 |
) |
||||||||||
|
Invesco V.I. Core Plus Bond Fund - Series I Shares |
23,075 |
(2,530 |
) |
20,545 |
|||||||||||
|
Invesco V.I. International Growth Fund - Series I Shares |
372,515 |
(81,340 |
) |
291,175 |
|||||||||||
|
Janus Henderson Balanced Portfolio - Institutional Shares |
11,243 |
(36,424 |
) |
(25,181 |
) |
||||||||||
|
Janus Henderson Balanced Portfolio - Service Shares |
14,032 |
(44,268 |
) |
(30,236 |
) |
||||||||||
|
Janus Henderson Enterprise Portfolio - Service Shares |
18,557 |
(43,699 |
) |
(25,142 |
) |
||||||||||
|
Janus Henderson Global Research Portfolio - Institutional Shares |
8,871 |
(36,125 |
) |
(27,254 |
) |
||||||||||
|
Janus Henderson Global Research Portfolio - Service Shares |
5,970 |
(14,159 |
) |
(8,189 |
) |
||||||||||
|
Janus Henderson Global Technology Portfolio - Service Shares |
11,042 |
(8,875 |
) |
2,167 |
|||||||||||
|
JPMorgan Insurance Trust Global Allocation Portfolio - Class 1 |
1,253,203 |
(62,186 |
) |
1,191,017 |
|||||||||||
|
LVIP Baron Growth Opportunities Fund - Service Class |
388,987 |
(138,138 |
) |
250,849 |
|||||||||||
|
LVIP Baron Growth Opportunities Fund - Standard Class |
12,679 |
(11,632 |
) |
1,047 |
|||||||||||
|
LVIP BlackRock Dividend Value Managed Volatility Fund - Standard Class |
136,398 |
(185,822 |
) |
(49,424 |
) |
||||||||||
|
LVIP BlackRock Global Growth ETF Allocation Managed Risk Fund - Standard Class |
991,719 |
(142,122 |
) |
849,597 |
|||||||||||
|
LVIP BlackRock Inflation Protected Bond Fund - Standard Class |
657,036 |
(238,455 |
) |
418,581 |
|||||||||||
|
LVIP BlackRock U.S. Growth ETF Allocation Managed Risk Fund - Standard Class |
181,501 |
(24,592 |
) |
156,909 |
|||||||||||
|
LVIP Blended Large Cap Growth Managed Volatility Fund - Standard Class |
31,368 |
(27,816 |
) |
3,552 |
|||||||||||
|
LVIP Blended Mid Cap Managed Volatility Fund - Standard Class |
43,971 |
(59,381 |
) |
(15,410 |
) |
||||||||||
|
LVIP Clarion Global Real Estate Fund - Standard Class |
236,787 |
(112,793 |
) |
123,994 |
|||||||||||
|
LVIP ClearBridge Large Cap Managed Volatility Fund - Standard Class |
9,998 |
(12,651 |
) |
(2,653 |
) |
||||||||||
|
LVIP Delaware Bond Fund - Standard Class |
1,925,551 |
(645,591 |
) |
1,279,960 |
|||||||||||
|
LVIP Delaware Diversified Floating Rate Fund - Standard Class |
526,929 |
(215,241 |
) |
311,688 |
|||||||||||
|
LVIP Delaware Social Awareness Fund - Standard Class |
68,757 |
(36,293 |
) |
32,464 |
|||||||||||
|
LVIP Delaware Special Opportunities Fund - Standard Class |
188,985 |
(40,985 |
) |
148,000 |
|||||||||||
|
LVIP Delaware Wealth Builder Fund - Standard Class |
25,756 |
(39,217 |
) |
(13,461 |
) |
||||||||||
|
LVIP Dimensional International Core Equity Fund - Standard Class |
882,769 |
(81,517 |
) |
801,252 |
|||||||||||
|
LVIP Dimensional International Equity Managed Volatility Fund - Standard Class |
119,124 |
(34,819 |
) |
84,305 |
|||||||||||
|
LVIP Dimensional U.S. Core Equity 1 Fund - Standard Class |
584,179 |
(111,963 |
) |
472,216 |
|||||||||||
|
LVIP Dimensional U.S. Core Equity 2 Fund - Standard Class |
854,084 |
(76,497 |
) |
777,587 |
|||||||||||
|
LVIP Dimensional U.S. Equity Managed Volatility Fund - Standard Class |
54,929 |
(127,229 |
) |
(72,300 |
) |
||||||||||
|
LVIP Dimensional/Vanguard Total Bond Fund - Standard Class |
1,863,929 |
(480,135 |
) |
1,383,794 |
|||||||||||
|
LVIP Franklin Templeton Global Equity Managed Volatility Fund - Standard Class |
36,520 |
(26,346 |
) |
10,174 |
|||||||||||
|
LVIP Global Conservative Allocation Managed Risk Fund - Standard Class |
520,467 |
(137,482 |
) |
382,985 |
|||||||||||
|
LVIP Global Growth Allocation Managed Risk Fund - Standard Class |
780,213 |
(362,558 |
) |
417,655 |
|||||||||||
|
LVIP Global Income Fund - Standard Class |
156,940 |
(130,091 |
) |
26,849 |
|||||||||||
|
LVIP Global Moderate Allocation Managed Risk Fund - Standard Class |
602,944 |
(762,625 |
) |
(159,681 |
) |
||||||||||
|
LVIP Government Money Market Fund - Standard Class |
31,671,597 |
(30,488,460 |
) |
1,183,137 |
|||||||||||
|
LVIP Invesco Diversified Equity-Income Managed Volatility Fund - Standard Class |
15,895 |
(7,118 |
) |
8,777 |
|||||||||||
|
LVIP JPMorgan High Yield Fund - Standard Class |
920,854 |
(560,555 |
) |
360,299 |
|||||||||||
|
LVIP JPMorgan Select Mid Cap Value Managed Volatility Fund - Standard Class |
63,809 |
(43,967 |
) |
19,842 |
|||||||||||
|
LVIP MFS International Growth Fund - Standard Class |
587,430 |
(120,645 |
) |
466,785 |
|||||||||||
|
LVIP MFS Value Fund - Standard Class |
990,817 |
(172,049 |
) |
818,768 |
|||||||||||
|
LVIP Mondrian International Value Fund - Standard Class |
403,155 |
(159,222 |
) |
243,933 |
|||||||||||
|
LVIP Multi-Manager Global Equity Managed Volatility Fund - Standard Class |
4,968 |
(19,549 |
) |
(14,581 |
) |
||||||||||
|
LVIP SSGA Bond Index Fund - Standard Class |
1,641,502 |
(299,326 |
) |
1,342,176 |
|||||||||||
|
LVIP SSGA Conservative Index Allocation Fund - Standard Class |
329,918 |
(128,391 |
) |
201,527 |
|||||||||||
|
LVIP SSGA Conservative Structured Allocation Fund - Standard Class |
91,473 |
(46,476 |
) |
44,997 |
|||||||||||
|
LVIP SSGA Developed International 150 Fund - Standard Class |
845,347 |
(40,983 |
) |
804,364 |
|||||||||||
|
LVIP SSGA Emerging Markets 100 Fund - Standard Class |
1,344,915 |
(136,772 |
) |
1,208,143 |
|||||||||||
|
LVIP SSGA Global Tactical Allocation Managed Volatility Fund - Standard Class |
117,221 |
(92,176 |
) |
25,045 |
|||||||||||
M-57
Lincoln Life Flexible Premium Variable Life Account M
Notes to financial statements (continued)
6. Changes in Units Outstanding (continued)
|
Units Issued |
Units Redeemed |
Net Increase (Decrease) |
|||||||||||||
|
LVIP SSGA International Index Fund - Standard Class |
1,208,548 |
(45,496 |
) |
1,163,052 |
|||||||||||
|
LVIP SSGA International Managed Volatility Fund - Standard Class |
72,039 |
(29,746 |
) |
42,293 |
|||||||||||
|
LVIP SSGA Large Cap 100 Fund - Standard Class |
552,386 |
(86,929 |
) |
465,457 |
|||||||||||
|
LVIP SSGA Moderate Index Allocation Fund - Standard Class |
1,601,203 |
(274,903 |
) |
1,326,300 |
|||||||||||
|
LVIP SSGA Moderate Structured Allocation Fund - Standard Class |
691,579 |
(304,015 |
) |
387,564 |
|||||||||||
|
LVIP SSGA Moderately Aggressive Index Allocation Fund - Standard Class |
1,573,861 |
(364,399 |
) |
1,209,462 |
|||||||||||
|
LVIP SSGA Moderately Aggressive Structured Allocation Fund - Standard Class |
790,996 |
(183,900 |
) |
607,096 |
|||||||||||
|
LVIP SSGA S&P 500 Index Fund - Standard Class |
7,762,359 |
(478,487 |
) |
7,283,872 |
|||||||||||
|
LVIP SSGA Small-Cap Index Fund - Standard Class |
1,086,906 |
(231,535 |
) |
855,371 |
|||||||||||
|
LVIP SSGA Small-Mid Cap 200 Fund - Standard Class |
933,544 |
(133,855 |
) |
799,689 |
|||||||||||
|
LVIP T. Rowe Price 2010 Fund - Standard Class |
1,482 |
(1,260 |
) |
222 |
|||||||||||
|
LVIP T. Rowe Price 2020 Fund - Standard Class |
16,191 |
(12,959 |
) |
3,232 |
|||||||||||
|
LVIP T. Rowe Price 2030 Fund - Standard Class |
18,727 |
(5,194 |
) |
13,533 |
|||||||||||
|
LVIP T. Rowe Price 2040 Fund - Standard Class |
23,621 |
(41,940 |
) |
(18,319 |
) |
||||||||||
|
LVIP T. Rowe Price Growth Stock Fund - Standard Class |
821,083 |
(101,005 |
) |
720,078 |
|||||||||||
|
LVIP T. Rowe Price Structured Mid-Cap Growth Fund - Standard Class |
438,624 |
(50,149 |
) |
388,475 |
|||||||||||
|
LVIP U.S. Growth Allocation Managed Risk Fund - Standard Class |
665,044 |
(90,899 |
) |
574,145 |
|||||||||||
|
LVIP Vanguard Domestic Equity ETF Fund - Standard Class |
1,747,229 |
(294,737 |
) |
1,452,492 |
|||||||||||
|
LVIP Vanguard International Equity ETF Fund - Standard Class |
1,775,298 |
(97,076 |
) |
1,678,222 |
|||||||||||
|
LVIP Wellington Capital Growth Fund - Standard Class |
490,884 |
(69,497 |
) |
421,387 |
|||||||||||
|
LVIP Wellington Mid-Cap Value Fund - Standard Class |
427,653 |
(47,815 |
) |
379,838 |
|||||||||||
|
M Capital Appreciation Fund |
24,261 |
(5,763 |
) |
18,498 |
|||||||||||
|
M International Equity Fund |
32,804 |
(15,552 |
) |
17,252 |
|||||||||||
|
M Large Cap Growth Fund |
36,082 |
(14,608 |
) |
21,474 |
|||||||||||
|
M Large Cap Value Fund |
29,497 |
(15,297 |
) |
14,200 |
|||||||||||
|
MFS® VIT Growth Series - Initial Class |
538,660 |
(142,827 |
) |
395,833 |
|||||||||||
|
MFS® VIT Total Return Series - Initial Class |
852,405 |
(131,553 |
) |
720,852 |
|||||||||||
|
MFS® VIT Utilities Series - Initial Class |
230,019 |
(277,166 |
) |
(47,147 |
) |
||||||||||
|
MFS® VIT II Core Equity Portfolio - Initial Class |
2,830 |
(5,361 |
) |
(2,531 |
) |
||||||||||
|
Neuberger Berman AMT Large Cap Value Portfolio - I Class |
2,212 |
(7,865 |
) |
(5,653 |
) |
||||||||||
|
Neuberger Berman AMT Mid Cap Growth Portfolio - I Class |
34,598 |
(107,956 |
) |
(73,358 |
) |
||||||||||
|
Neuberger Berman AMT Mid Cap Intrinsic Value Portfolio - I Class |
18,023 |
(31,860 |
) |
(13,837 |
) |
||||||||||
|
PIMCO VIT CommodityRealReturn® Strategy Portfolio - Administrative Class |
622,799 |
(207,887 |
) |
414,912 |
|||||||||||
|
Putnam VT Equity Income Fund - Class IB |
3,543 |
(8,370 |
) |
(4,827 |
) |
||||||||||
|
Putnam VT Global Health Care Fund - Class IB |
1,982 |
(8,209 |
) |
(6,227 |
) |
||||||||||
|
Templeton Foreign VIP Fund - Class 1 |
4,710 |
(8,074 |
) |
(3,364 |
) |
||||||||||
|
Templeton Foreign VIP Fund - Class 2 |
10,289 |
(43,013 |
) |
(32,724 |
) |
||||||||||
|
Templeton Global Bond VIP Fund - Class 1 |
1,256,556 |
(282,623 |
) |
973,933 |
|||||||||||
|
Templeton Growth VIP Fund - Class 1 |
25,393 |
(68,698 |
) |
(43,305 |
) |
||||||||||
|
Templeton Growth VIP Fund - Class 2 |
3,063 |
(6,077 |
) |
(3,014 |
) |
||||||||||
The change in units outstanding for the year ended December 31, 2017, is as follows:
|
Units Issued |
Units Redeemed |
Net Increase (Decrease) |
|||||||||||||
|
AB VPS Global Thematic Growth Portfolio - Class A |
118,155 |
(41,529 |
) |
76,626 |
|||||||||||
|
AB VPS Growth and Income Portfolio - Class A |
53,643 |
(94,331 |
) |
(40,688 |
) |
||||||||||
|
AB VPS International Value Portfolio - Class A |
15,552 |
(111,695 |
) |
(96,143 |
) |
||||||||||
|
AB VPS Large Cap Growth Portfolio - Class A |
13,312 |
(28,352 |
) |
(15,040 |
) |
||||||||||
|
AB VPS Small/Mid Cap Value Portfolio - Class A |
435,961 |
(94,018 |
) |
341,943 |
|||||||||||
|
American Century VP Balanced Fund - Class I |
402,732 |
(7,422 |
) |
395,310 |
|||||||||||
|
American Century VP Inflation Protection Fund - Class I |
124,788 |
(103,955 |
) |
20,833 |
|||||||||||
|
American Funds Global Growth Fund - Class 2 |
1,018,620 |
(121,061 |
) |
897,559 |
|||||||||||
|
American Funds Global Small Capitalization Fund - Class 2 |
632,429 |
(123,062 |
) |
509,367 |
|||||||||||
|
American Funds Growth Fund - Class 2 |
1,888,013 |
(277,199 |
) |
1,610,814 |
|||||||||||
|
American Funds Growth-Income Fund - Class 2 |
2,826,424 |
(178,792 |
) |
2,647,632 |
|||||||||||
|
American Funds International Fund - Class 2 |
1,396,237 |
(365,842 |
) |
1,030,395 |
|||||||||||
|
BlackRock Global Allocation V.I. Fund - Class I |
2,092,554 |
(321,005 |
) |
1,771,549 |
|||||||||||
|
ClearBridge Variable Mid Cap Portfolio - Class I |
506,012 |
(43,165 |
) |
462,847 |
|||||||||||
|
Delaware VIP® Diversified Income Series - Standard Class |
1,268,796 |
(123,842 |
) |
1,144,954 |
|||||||||||
|
Delaware VIP® Emerging Markets Series - Standard Class |
758,286 |
(367,845 |
) |
390,441 |
|||||||||||
|
Delaware VIP® High Yield Series - Standard Class |
135,545 |
(180,965 |
) |
(45,420 |
) |
||||||||||
M-58
Lincoln Life Flexible Premium Variable Life Account M
Notes to financial statements (continued)
6. Changes in Units Outstanding (continued)
|
Units Issued |
Units Redeemed |
Net Increase (Decrease) |
|||||||||||||
|
Delaware VIP® Limited-Term Diversified Income Series - Standard Class |
1,457,848 |
(62,242 |
) |
1,395,606 |
|||||||||||
|
Delaware VIP® REIT Series - Standard Class |
650,669 |
(305,246 |
) |
345,423 |
|||||||||||
|
Delaware VIP® Small Cap Value Series - Standard Class |
574,649 |
(221,431 |
) |
353,218 |
|||||||||||
|
Delaware VIP® Smid Cap Core Series - Standard Class |
578,630 |
(122,643 |
) |
455,987 |
|||||||||||
|
Delaware VIP® U.S. Growth Series - Standard Class |
124,345 |
(156,101 |
) |
(31,756 |
) |
||||||||||
|
Delaware VIP® Value Series - Standard Class |
477,072 |
(258,641 |
) |
218,431 |
|||||||||||
|
DWS Alternative Asset Allocation VIP Portfolio - Class A |
180,790 |
(165,900 |
) |
14,890 |
|||||||||||
|
DWS Equity 500 Index VIP Portfolio - Class A |
45,275 |
(152,528 |
) |
(107,253 |
) |
||||||||||
|
DWS Small Cap Index VIP Portfolio - Class A |
23,230 |
(36,138 |
) |
(12,908 |
) |
||||||||||
|
Fidelity® VIP Asset Manager Portfolio - Initial Class |
1,361 |
(2,844 |
) |
(1,483 |
) |
||||||||||
|
Fidelity® VIP Contrafund® Portfolio - Service Class |
1,931,439 |
(183,899 |
) |
1,747,540 |
|||||||||||
|
Fidelity® VIP Equity-Income Portfolio - Initial Class |
2,355 |
(10,268 |
) |
(7,913 |
) |
||||||||||
|
Fidelity® VIP Equity-Income Portfolio - Service Class |
6,700 |
(38,158 |
) |
(31,458 |
) |
||||||||||
|
Fidelity® VIP Growth Opportunities Portfolio - Service Class |
5,762 |
(10,185 |
) |
(4,423 |
) |
||||||||||
|
Fidelity® VIP Growth Portfolio - Service Class |
404,511 |
(110,329 |
) |
294,182 |
|||||||||||
|
Fidelity® VIP High Income Portfolio - Service Class |
6,236 |
(6,381 |
) |
(145 |
) |
||||||||||
|
Fidelity® VIP Investment Grade Bond Portfolio - Initial Class |
5,133 |
(5,897 |
) |
(764 |
) |
||||||||||
|
Fidelity® VIP Mid Cap Portfolio - Service Class |
924,293 |
(95,714 |
) |
828,579 |
|||||||||||
|
Fidelity® VIP Overseas Portfolio - Service Class |
35,917 |
(39,236 |
) |
(3,319 |
) |
||||||||||
|
Franklin Income VIP Fund - Class 1 |
1,161,054 |
(94,532 |
) |
1,066,522 |
|||||||||||
|
Franklin Mutual Shares VIP Fund - Class 1 |
496,480 |
(56,991 |
) |
439,489 |
|||||||||||
|
Franklin Small-Mid Cap Growth VIP Fund - Class 1 |
65,323 |
(37,022 |
) |
28,301 |
|||||||||||
|
Invesco V.I. American Franchise Fund - Series I Shares |
9,042 |
(86,688 |
) |
(77,646 |
) |
||||||||||
|
Invesco V.I. Core Equity Fund - Series I Shares |
15,221 |
(71,947 |
) |
(56,726 |
) |
||||||||||
|
Invesco V.I. Core Plus Bond Fund - Series I Shares |
3,500 |
(3,425 |
) |
75 |
|||||||||||
|
Invesco V.I. International Growth Fund - Series I Shares |
471,394 |
(97,446 |
) |
373,948 |
|||||||||||
|
Janus Henderson Balanced Portfolio - Institutional Shares |
11,061 |
(50,832 |
) |
(39,771 |
) |
||||||||||
|
Janus Henderson Balanced Portfolio - Service Shares |
39,398 |
(41,649 |
) |
(2,251 |
) |
||||||||||
|
Janus Henderson Enterprise Portfolio - Service Shares |
28,702 |
(22,040 |
) |
6,662 |
|||||||||||
|
Janus Henderson Global Research Portfolio - Institutional Shares |
8,099 |
(51,419 |
) |
(43,320 |
) |
||||||||||
|
Janus Henderson Global Research Portfolio - Service Shares |
2,099 |
(21,290 |
) |
(19,191 |
) |
||||||||||
|
Janus Henderson Global Technology Portfolio - Service Shares |
23,685 |
(8,864 |
) |
14,821 |
|||||||||||
|
JPMorgan Insurance Trust Global Allocation Portfolio - Class 1 |
201,212 |
(16,950 |
) |
184,262 |
|||||||||||
|
LVIP Baron Growth Opportunities Fund - Service Class |
319,725 |
(105,554 |
) |
214,171 |
|||||||||||
|
LVIP Baron Growth Opportunities Fund - Standard Class |
6,327 |
(13,850 |
) |
(7,523 |
) |
||||||||||
|
LVIP BlackRock Dividend Value Managed Volatility Fund - Standard Class |
96,782 |
(356,953 |
) |
(260,171 |
) |
||||||||||
|
LVIP BlackRock Global Growth ETF Allocation Managed Risk Fund - Standard Class |
565,732 |
(10,118 |
) |
555,614 |
|||||||||||
|
LVIP BlackRock Inflation Protected Bond Fund - Standard Class |
783,648 |
(65,994 |
) |
717,654 |
|||||||||||
|
LVIP BlackRock U.S. Growth ETF Allocation Managed Risk Fund - Standard Class |
163,424 |
(5,394 |
) |
158,030 |
|||||||||||
|
LVIP Blended Large Cap Growth Managed Volatility Fund - Standard Class |
24,254 |
(40,015 |
) |
(15,761 |
) |
||||||||||
|
LVIP Blended Mid Cap Managed Volatility Fund - Standard Class |
16,541 |
(44,105 |
) |
(27,564 |
) |
||||||||||
|
LVIP Clarion Global Real Estate Fund - Standard Class |
303,434 |
(113,282 |
) |
190,152 |
|||||||||||
|
LVIP ClearBridge Large Cap Managed Volatility Fund - Standard Class |
19,942 |
(3,554 |
) |
16,388 |
|||||||||||
|
LVIP Delaware Bond Fund - Standard Class |
1,932,406 |
(493,428 |
) |
1,438,978 |
|||||||||||
|
LVIP Delaware Diversified Floating Rate Fund - Standard Class |
705,074 |
(121,705 |
) |
583,369 |
|||||||||||
|
LVIP Delaware Social Awareness Fund - Standard Class |
48,802 |
(77,399 |
) |
(28,597 |
) |
||||||||||
|
LVIP Delaware Special Opportunities Fund - Standard Class |
181,868 |
(70,162 |
) |
111,706 |
|||||||||||
|
LVIP Delaware Wealth Builder Fund - Standard Class |
18,382 |
(28,370 |
) |
(9,988 |
) |
||||||||||
|
LVIP Dimensional International Core Equity Fund - Standard Class |
577,959 |
(38,152 |
) |
539,807 |
|||||||||||
|
LVIP Dimensional International Equity Managed Volatility Fund - Standard Class |
70,310 |
(115,069 |
) |
(44,759 |
) |
||||||||||
|
LVIP Dimensional U.S. Core Equity 1 Fund - Standard Class |
366,038 |
(35,250 |
) |
330,788 |
|||||||||||
|
LVIP Dimensional U.S. Core Equity 2 Fund - Standard Class |
631,953 |
(51,994 |
) |
579,959 |
|||||||||||
|
LVIP Dimensional U.S. Equity Managed Volatility Fund - Standard Class |
75,296 |
(71,707 |
) |
3,589 |
|||||||||||
|
LVIP Dimensional/Vanguard Total Bond Fund - Standard Class |
1,634,932 |
(384,480 |
) |
1,250,452 |
|||||||||||
|
LVIP Franklin Templeton Global Equity Managed Volatility Fund - Standard Class |
22,872 |
(37,419 |
) |
(14,547 |
) |
||||||||||
|
LVIP Global Conservative Allocation Managed Risk Fund - Standard Class |
564,445 |
(196,662 |
) |
367,783 |
|||||||||||
|
LVIP Global Growth Allocation Managed Risk Fund - Standard Class |
1,001,254 |
(419,434 |
) |
581,820 |
|||||||||||
|
LVIP Global Income Fund - Standard Class |
223,906 |
(21,386 |
) |
202,520 |
|||||||||||
|
LVIP Global Moderate Allocation Managed Risk Fund - Standard Class |
760,398 |
(494,462 |
) |
265,936 |
|||||||||||
|
LVIP Government Money Market Fund - Standard Class |
20,404,707 |
(19,478,637 |
) |
926,070 |
|||||||||||
|
LVIP Invesco Diversified Equity-Income Managed Volatility Fund - Standard Class |
15,189 |
(13,411 |
) |
1,778 |
|||||||||||
|
LVIP JPMorgan High Yield Fund - Standard Class |
773,969 |
(196,636 |
) |
577,333 |
|||||||||||
M-59
Lincoln Life Flexible Premium Variable Life Account M
Notes to financial statements (continued)
6. Changes in Units Outstanding (continued)
|
Units Issued |
Units Redeemed |
Net Increase (Decrease) |
|||||||||||||
|
LVIP JPMorgan Select Mid Cap Value Managed Volatility Fund - Standard Class |
78,349 |
(62,146 |
) |
16,203 |
|||||||||||
|
LVIP MFS International Growth Fund - Standard Class |
380,307 |
(131,551 |
) |
248,756 |
|||||||||||
|
LVIP MFS Value Fund - Standard Class |
1,241,284 |
(96,863 |
) |
1,144,421 |
|||||||||||
|
LVIP Mondrian International Value Fund - Standard Class |
343,301 |
(190,688 |
) |
152,613 |
|||||||||||
|
LVIP Multi-Manager Global Equity Managed Volatility Fund - Standard Class |
9,861 |
(4,606 |
) |
5,255 |
|||||||||||
|
LVIP SSGA Bond Index Fund - Standard Class |
983,568 |
(106,144 |
) |
877,424 |
|||||||||||
|
LVIP SSGA Conservative Index Allocation Fund - Standard Class |
496,214 |
(75,330 |
) |
420,884 |
|||||||||||
|
LVIP SSGA Conservative Structured Allocation Fund - Standard Class |
185,743 |
(39,138 |
) |
146,605 |
|||||||||||
|
LVIP SSGA Developed International 150 Fund - Standard Class |
414,351 |
(68,567 |
) |
345,784 |
|||||||||||
|
LVIP SSGA Emerging Markets 100 Fund - Standard Class |
630,937 |
(97,542 |
) |
533,395 |
|||||||||||
|
LVIP SSGA Global Tactical Allocation Managed Volatility Fund - Standard Class |
128,916 |
(145,497 |
) |
(16,581 |
) |
||||||||||
|
LVIP SSGA International Index Fund - Standard Class |
714,282 |
(174,989 |
) |
539,293 |
|||||||||||
|
LVIP SSGA International Managed Volatility Fund - Standard Class |
43,241 |
(73,686 |
) |
(30,445 |
) |
||||||||||
|
LVIP SSGA Large Cap 100 Fund - Standard Class |
449,976 |
(74,893 |
) |
375,083 |
|||||||||||
|
LVIP SSGA Moderate Index Allocation Fund - Standard Class |
1,687,942 |
(288,646 |
) |
1,399,296 |
|||||||||||
|
LVIP SSGA Moderate Structured Allocation Fund - Standard Class |
949,133 |
(118,229 |
) |
830,904 |
|||||||||||
|
LVIP SSGA Moderately Aggressive Index Allocation Fund - Standard Class |
1,933,177 |
(153,875 |
) |
1,779,302 |
|||||||||||
|
LVIP SSGA Moderately Aggressive Structured Allocation Fund - Standard Class |
835,295 |
(118,609 |
) |
716,686 |
|||||||||||
|
LVIP SSGA S&P 500 Index Fund - Standard Class |
6,100,376 |
(447,934 |
) |
5,652,442 |
|||||||||||
|
LVIP SSGA Small-Cap Index Fund - Standard Class |
907,175 |
(74,880 |
) |
832,295 |
|||||||||||
|
LVIP SSGA Small-Mid Cap 200 Fund - Standard Class |
637,850 |
(42,984 |
) |
594,866 |
|||||||||||
|
LVIP T. Rowe Price 2010 Fund - Standard Class |
2,591 |
(7,639 |
) |
(5,048 |
) |
||||||||||
|
LVIP T. Rowe Price 2020 Fund - Standard Class |
6,253 |
(9,732 |
) |
(3,479 |
) |
||||||||||
|
LVIP T. Rowe Price 2030 Fund - Standard Class |
15,626 |
(62,831 |
) |
(47,205 |
) |
||||||||||
|
LVIP T. Rowe Price 2040 Fund - Standard Class |
18,785 |
(19,615 |
) |
(830 |
) |
||||||||||
|
LVIP T. Rowe Price Growth Stock Fund - Standard Class |
635,077 |
(105,844 |
) |
529,233 |
|||||||||||
|
LVIP T. Rowe Price Structured Mid-Cap Growth Fund - Standard Class |
345,388 |
(62,433 |
) |
282,955 |
|||||||||||
|
LVIP U.S. Growth Allocation Managed Risk Fund - Standard Class |
205,305 |
(14,874 |
) |
190,431 |
|||||||||||
|
LVIP Vanguard Domestic Equity ETF Fund - Standard Class |
1,514,652 |
(157,776 |
) |
1,356,876 |
|||||||||||
|
LVIP Vanguard International Equity ETF Fund - Standard Class |
1,167,386 |
(158,539 |
) |
1,008,847 |
|||||||||||
|
LVIP Wellington Capital Growth Fund - Standard Class |
238,595 |
(89,032 |
) |
149,563 |
|||||||||||
|
LVIP Wellington Mid-Cap Value Fund - Standard Class |
453,098 |
(40,634 |
) |
412,464 |
|||||||||||
|
M Capital Appreciation Fund |
6,450 |
(15,569 |
) |
(9,119 |
) |
||||||||||
|
M International Equity Fund |
16,227 |
(26,271 |
) |
(10,044 |
) |
||||||||||
|
M Large Cap Growth Fund |
10,675 |
(30,187 |
) |
(19,512 |
) |
||||||||||
|
M Large Cap Value Fund |
17,243 |
(20,666 |
) |
(3,423 |
) |
||||||||||
|
MFS® VIT Growth Series - Initial Class |
382,842 |
(114,790 |
) |
268,052 |
|||||||||||
|
MFS® VIT Total Return Series - Initial Class |
589,192 |
(90,741 |
) |
498,451 |
|||||||||||
|
MFS® VIT Utilities Series - Initial Class |
318,405 |
(237,801 |
) |
80,604 |
|||||||||||
|
MFS® VIT II Core Equity Portfolio - Initial Class |
1,573 |
(12,675 |
) |
(11,102 |
) |
||||||||||
|
Neuberger Berman AMT Large Cap Value Portfolio - I Class |
6,996 |
(14,714 |
) |
(7,718 |
) |
||||||||||
|
Neuberger Berman AMT Mid Cap Growth Portfolio - I Class |
27,792 |
(99,521 |
) |
(71,729 |
) |
||||||||||
|
Neuberger Berman AMT Mid Cap Intrinsic Value Portfolio - I Class |
17,903 |
(28,964 |
) |
(11,061 |
) |
||||||||||
|
PIMCO VIT CommodityRealReturn® Strategy Portfolio - Administrative Class |
813,758 |
(165,050 |
) |
648,708 |
|||||||||||
|
Putnam VT Equity Income Fund - Class IB |
77,235 |
(2,726 |
) |
74,509 |
|||||||||||
|
Putnam VT Global Health Care Fund - Class IB |
7,059 |
(22,670 |
) |
(15,611 |
) |
||||||||||
|
Putnam VT Growth & Income Fund - Class IB |
892 |
(73,190 |
) |
(72,298 |
) |
||||||||||
|
Templeton Foreign VIP Fund - Class 1 |
3,191 |
(13,466 |
) |
(10,275 |
) |
||||||||||
|
Templeton Foreign VIP Fund - Class 2 |
26,743 |
(35,446 |
) |
(8,703 |
) |
||||||||||
|
Templeton Global Bond VIP Fund - Class 1 |
1,001,864 |
(69,806 |
) |
932,058 |
|||||||||||
|
Templeton Growth VIP Fund - Class 1 |
22,121 |
(36,779 |
) |
(14,658 |
) |
||||||||||
|
Templeton Growth VIP Fund - Class 2 |
5,495 |
(5,479 |
) |
16 |
|||||||||||
7. Subsequent Events
Management evaluated subsequent events through the date these financial statements were issued and determined there were no additional matters to be disclosed.
M-60
Report of Independent Registered Public Accounting Firm
To the Stockholders and Board of Directors of The Lincoln National Life Insurance Company
and
Contract Owners of Lincoln Life Flexible Premium Variable Life Account M
Opinion on the Financial Statements
We have audited the accompanying statements of assets and liabilities of each of the subaccounts listed in the Appendix that comprise Lincoln Life Flexible Premium Variable Life Account M ("Variable Account"), as of December 31, 2018, the related statements of operations and the statements of changes in net assets for each of the periods indicated in the Appendix, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of each subaccount as of December 31, 2018, the results of its operations and changes in its net assets for each of the periods indicated in the Appendix, in conformity with U.S. generally accepted accounting principles.
Basis for Opinion
These financial statements are the responsibility of the Variable Account's management. Our responsibility is to express an opinion on each of the subaccounts' financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Variable Account in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of investments owned as of December 31, 2018, by correspondence with the fund companies or their transfer agents, as applicable. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Ernst & Young
We have served as the Variable Account's Auditor since 1998.
Philadelphia, Pennsylvania
April 12, 2019
M-61
|
Subaccount |
Statements of Assets and Liabilities |
Statements of Operations |
Statements of Changes in Net Assets |
||||||||||||
|
AB VPS Global Thematic Growth Portfolio - Class A |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
AB VPS Growth and Income Portfolio - Class A |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
AB VPS International Value Portfolio - Class A |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
AB VPS Large Cap Growth Portfolio - Class A |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
AB VPS Small/Mid Cap Value Portfolio - Class A |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
American Century VP Balanced Fund - Class I |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
American Century VP Inflation Protection Fund - Class I |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
American Funds Global Growth Fund - Class 2 |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
American Funds Global Small Capitalization Fund - Class 2 |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
American Funds Growth Fund - Class 2 |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
American Funds Growth-Income Fund - Class 2 |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
American Funds International Fund - Class 2 |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
BlackRock Global Allocation V.I. Fund - Class I |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
ClearBridge Variable Mid Cap Portfolio - Class I |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
Delaware VIP® Diversified Income Series - Standard Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
Delaware VIP® Emerging Markets Series - Standard Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
Delaware VIP® High Yield Series - Standard Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
Delaware VIP® Limited-Term Diversified Income Series - Standard Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
Delaware VIP® REIT Series - Standard Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
Delaware VIP® Small Cap Value Series - Standard Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
Delaware VIP® Smid Cap Core Series - Standard Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
Delaware VIP® U.S. Growth Series - Standard Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
Delaware VIP® Value Series - Standard Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
M-62
|
Subaccount |
Statements of Assets and Liabilities |
Statements of Operations |
Statements of Changes in Net Assets |
||||||||||||
|
DWS Alternative Asset Allocation VIP Portfolio - Class A |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
DWS Equity 500 Index VIP Portfolio - Class A |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
DWS Small Cap Index VIP Portfolio - Class A |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
Fidelity® VIP Asset Manager Portfolio - Initial Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
Fidelity® VIP Contrafund® Portfolio - Service Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
Fidelity® VIP Equity-Income Portfolio - Initial Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
Fidelity® VIP Equity-Income Portfolio - Service Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
Fidelity® VIP Growth Opportunities Portfolio - Service Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
Fidelity® VIP Growth Portfolio - Service Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
Fidelity® VIP High Income Portfolio - Service Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
Fidelity® VIP Investment Grade Bond Portfolio - Initial Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
Fidelity® VIP Mid Cap Portfolio - Service Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
Fidelity® VIP Overseas Portfolio - Service Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
Franklin Income VIP Fund - Class 1 |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
Franklin Mutual Shares VIP Fund - Class 1 |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
Franklin Small-Mid Cap Growth VIP Fund - Class 1 |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
Invesco V.I. American Franchise Fund - Series I Shares |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
Invesco V.I. Core Equity Fund - Series I Shares |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
Invesco V.I. Core Plus Bond Fund - Series I Shares |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
Invesco V.I. International Growth Fund - Series I Shares |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
Janus Henderson Balanced Portfolio - Institutional Shares |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
Janus Henderson Balanced Portfolio - Service Shares |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
Janus Henderson Enterprise Portfolio - Service Shares |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
Janus Henderson Global Research Portfolio - Institutional Shares |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
M-63
|
Subaccount |
Statements of Assets and Liabilities |
Statements of Operations |
Statements of Changes in Net Assets |
||||||||||||
|
Janus Henderson Global Research Portfolio - Service Shares |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
Janus Henderson Global Technology Portfolio - Service Shares |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
JPMorgan Insurance Trust Global Allocation Portfolio - Class 1 |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
LVIP Baron Growth Opportunities Fund - Service Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
LVIP Baron Growth Opportunities Fund - Standard Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
LVIP BlackRock Dividend Value Managed Volatility Fund - Standard Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
LVIP BlackRock Global Growth ETF Allocation Managed Risk Fund - Standard Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
LVIP BlackRock Inflation Protected Bond Fund - Standard Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
LVIP BlackRock U.S. Growth ETF Allocation Managed Risk Fund - Standard Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
LVIP Blended Large Cap Growth Managed Volatility Fund - Standard Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
LVIP Blended Mid Cap Managed Volatility Fund - Standard Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
LVIP Clarion Global Real Estate Fund - Standard Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
LVIP ClearBridge Large Cap Managed Volatility Fund - Standard Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
LVIP Delaware Bond Fund - Standard Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
LVIP Delaware Diversified Floating Rate Fund - Standard Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
LVIP Delaware Social Awareness Fund - Standard Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
LVIP Delaware Special Opportunities Fund - Standard Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
LVIP Delaware Wealth Builder Fund - Standard Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
LVIP Dimensional International Core Equity Fund - Standard Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
LVIP Dimensional International Equity Managed Volatility Fund - Standard Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
LVIP Dimensional U.S. Core Equity 1 Fund - Standard Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
M-64
|
Subaccount |
Statements of Assets and Liabilities |
Statements of Operations |
Statements of Changes in Net Assets |
||||||||||||
|
LVIP Dimensional U.S. Core Equity 2 Fund - Standard Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
LVIP Dimensional U.S. Equity Managed Volatility Fund - Standard Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
LVIP Dimensional/Vanguard Total Bond Fund - Standard Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
LVIP Franklin Templeton Global Equity Managed Volatility Fund - Standard Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
LVIP Global Conservative Allocation Managed Risk Fund - Standard Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
LVIP Global Growth Allocation Managed Risk Fund - Standard Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
LVIP Global Income Fund - Standard Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
LVIP Global Moderate Allocation Managed Risk Fund - Standard Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
LVIP Government Money Market Fund - Standard Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
LVIP Invesco Diversified Equity-Income Managed Volatility Fund - Standard Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
LVIP JPMorgan High Yield Fund - Standard Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
LVIP JPMorgan Select Mid Cap Value Managed Volatility Fund - Standard Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
LVIP MFS International Growth Fund - Standard Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
LVIP MFS Value Fund - Standard Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
LVIP Mondrian International Value Fund - Standard Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
LVIP Multi-Manager Global Equity Managed Volatility Fund - Standard Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
LVIP SSGA Bond Index Fund - Standard Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
LVIP SSGA Conservative Index Allocation Fund - Standard Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
LVIP SSGA Conservative Structured Allocation Fund - Standard Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
LVIP SSGA Developed International 150 Fund - Standard Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
LVIP SSGA Emerging Markets 100 Fund - Standard Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
M-65
|
Subaccount |
Statements of Assets and Liabilities |
Statements of Operations |
Statements of Changes in Net Assets |
||||||||||||
|
LVIP SSGA Global Tactical Allocation Managed Volatility Fund - Standard Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
LVIP SSGA International Index Fund - Standard Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
LVIP SSGA International Managed Volatility Fund - Standard Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
LVIP SSGA Large Cap 100 Fund - Standard Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
LVIP SSGA Moderate Index Allocation Fund - Standard Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
LVIP SSGA Moderate Structured Allocation Fund - Standard Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
LVIP SSGA Moderately Aggressive Index Allocation Fund - Standard Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
LVIP SSGA Moderately Aggressive Structured Allocation Fund - Standard Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
LVIP SSGA S&P 500 Index Fund - Standard Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
LVIP SSGA Small-Cap Index Fund - Standard Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
LVIP SSGA Small-Mid Cap 200 Fund - Standard Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
LVIP T. Rowe Price 2010 Fund - Standard Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
LVIP T. Rowe Price 2020 Fund - Standard Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
LVIP T. Rowe Price 2030 Fund - Standard Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
LVIP T. Rowe Price 2040 Fund - Standard Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
LVIP T. Rowe Price Growth Stock Fund - Standard Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
LVIP T. Rowe Price Structured Mid-Cap Growth Fund - Standard Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
LVIP U.S. Growth Allocation Managed Risk Fund - Standard Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
LVIP Vanguard Domestic Equity ETF Fund - Standard Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
LVIP Vanguard International Equity ETF Fund - Standard Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
LVIP Wellington Capital Growth Fund - Standard Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
LVIP Wellington Mid-Cap Value Fund - Standard Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
M Capital Appreciation Fund |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
M-66
|
Subaccount |
Statements of Assets and Liabilities |
Statements of Operations |
Statements of Changes in Net Assets |
||||||||||||
|
M International Equity Fund |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
M Large Cap Growth Fund |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
M Large Cap Value Fund |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
MFS® VIT Growth Series - Initial Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
MFS® VIT Total Return Series - Initial Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
MFS® VIT Utilities Series - Initial Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
MFS® VIT II Core Equity Portfolio - Initial Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
Neuberger Berman AMT Large Cap Value Portfolio - I Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
Neuberger Berman AMT Mid Cap Growth Portfolio - I Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
Neuberger Berman AMT Mid Cap Intrinsic Value Portfolio - I Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
PIMCO VIT CommodityRealReturn® Strategy Portfolio - Administrative Class |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
Putnam VT Equity Income Fund - Class IB |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For the year ended December 31, 2018 and the period from May 12, 2017 (commencement of operations) through December 31, 2017 |
||||||||||||
|
Putnam VT Global Health Care Fund - Class IB |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
Putnam VT Growth & Income Fund - Class IB |
N/A - the fund merged into Putnam VT Equity Income Fund - Class IB during 2017 |
N/A - the fund merged into Putnam VT Equity Income Fund - Class IB during 2017 |
For the year ended December 31, 2017 |
||||||||||||
|
Templeton Foreign VIP Fund - Class 1 |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
Templeton Foreign VIP Fund - Class 2 |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
Templeton Global Bond VIP Fund - Class 1 |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
Templeton Growth VIP Fund - Class 1 |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
|
Templeton Growth VIP Fund - Class 2 |
As of December 31, 2018 |
For the year ended December 31, 2018 |
For each of the two years in the period ended December 31, 2018 |
||||||||||||
M-67
| a) | Resolution of the Board of Directors of The Lincoln National Life Insurance Company and related documents authorizing establishment of the Account(2) |
| b) | Not applicable. |
| c) | (1) | Selling Agreement between The Lincoln National Life Insurance Company and Lincoln Financial Distributors, Inc.(4), and Amendments(6) |
| d) | (1) | Policy ICC19-VUL686 and ICC19-VUL686-1 (Filed Herewith) |
| (2) | Accelerated Benefits Riders—Policy Form ABR 5645(8), ABR 5650(8) |
| (3) | Change of Insured Rider—Policy Form LR496(7) |
| (4) | Enhanced Surrender Value Rider—Policy Form LR541(8) |
| (5) | No-Lapse Enhancement Rider—Policy Form ICC19ONER-686 (Filed Herewith) |
| (6) | Overloan Protection Rider—Policy Form LR616(16) |
| (7) | Premium Reserve Rider—Policy Form LR543(8) |
| (8) | Waiver of Monthly Deduction Benefit Rider—Policy Form LR436 and LR437(2) |
| (9) | Accelerated Benefits Rider for Chronic Illness—Policy Form LR630 (12) |
| (10) | Accelerated Benefits Rider for Chronic Illness and Terminal Illness—Policy Form ICC18ABR-7052 (19) |
| (11) | Accelerated Death Benefit for Long-Term Care Services Rider—Policy Form ICC18LTC-7050 (9) |
| e) | (1) | Application—Form ICC18LFF11693 (Filed Herewith) |
| f) | (1) | Articles of Incorporation of The National Lincoln Life Insurance Company(1) |
| (2) | Bylaws of The National Lincoln Life Insurance Company(5) |
| g) | Reinsurance Contracts(10) |
| h) | Fund Participation Agreements, and amendments thereto, between The Lincoln National Life Insurance Company and: |
| (1) | AIM Variable Insurance Funds (Invesco Variable Insurance Funds) (13) |
| (2) | AllianceBernstein Variable Products Series Fund, Inc. (14) |
| (3) | American Century Variable Portfolios, Inc. (18) |
| (4) | American Funds Insurance Series (17) |
| (5) | BlackRock Variable Series Funds, Inc. and BlackRock Variable Series Funds II, Inc. (11) |
| (a) | Amendment dated August 31, 2018 (3) |
| (6) | Delaware VIP Trust(14) |
| (7) | Deutsche Variable Series II (14) |
| (8) | Fidelity Variable Insurance Products(18) |
| (9) | Franklin Templeton Variable Insurance Products Trust (14) |
| (10) | JPMorgan Insurance Trust (17) |
| (11) | Legg Mason Partners Variable Equity Trust (18) |
| (12) | Lincoln Variable Insurance Products Trust (15) |
| (13) | MFS Variable Insurance Trust (14) |
| (a) | Amendment dated August 1, 2016 (3) |
| (14) | Northern Lights Variable Trust (To be filed by amendment) |
| (15) | PIMCO Variable Insurance Trust(18) |
| i) | Accounting and Financial Administration Services Agreement dated January 1, 2019 among State Street Bank and Trust Company, The Lincoln National Life Insurance Company and Lincoln Life & Annuity Company of New York.(3) |
| j) | Not applicable. |
| k) | Opinion and Consent of Scott C. Durocher, Esquire |
| l) | Not Applicable. |
| m) | Not Applicable. |
| n) | Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm |
| o) | Not applicable. |
| p) | Not applicable. |
| q) | Compliance Procedures (3) |
| (1) | Incorporated by reference to Registration Statement on Form N-4 (File No. 33-04999) filed on September 24, 1996. |
| (2) | Incorporated by reference to Registrant's Registration Statement on Form S-6 (File No. 333-42479) filed on December 17, 1997. |
| (3) | Incorporated by reference to Post-Effective Amendment No. 36 on Form N-6 (File No. 333-125790) filed on April 12, 2019. |
| (4) | Incorporated by reference to Post-Effective Amendment No. 24 on Form N-4 (File No. 333-61554) filed on December 18, 2007. |
| (5) | Incorporated by reference to Post-Effective Amendment No. 3 on Form N-6 (File No. 333-118478) filed on April 5, 2007. |
| (6) | (a) | Selling Group Agreement for Lincoln Financial Advisors incorporated herein by reference to Post-Effective Amendment No. 16 (File No. 033-25990) filed on April 22, 1999. |
| (b) | Amendment dated November 22, 1999 to Selling Group Agreement incorporated herein by reference to Post-Effective Amendment No. 18 (File No. 033-25990) filed on April 13, 2000. |
| (c) | Amendment dated February 14, 2000 to Selling Group Agreement incorporated herein by reference to Post-Effective Amendment No. 18 (File No. 033-25990) filed on April 13, 2000. |
| (d) | Amended and Restated Principal Underwriting Agreement dated May 1, 2007 between The Lincoln National Life Insurance Company and Lincoln Financial Distributors, Inc. incorporated herein by reference to Post-Effective Amendment No. 24 (File No. 333-61554) filed on December 18, 2007. |
| (e) | Form of Broker-Dealer Selling Agreement among The Lincoln National Life Insurance Company, Lincoln Life & Annuity Company of New York and Lincoln Financial Distributors, Inc. incorporated herein by reference to Registration Statement on Form N-4 (File No. 333-222786) filed on January 30, 2018. |
| (7) | Incorporated by reference to Post-Effective Amendment No. 3 on Form S-6 (File No. 333-82663) filed on April 12, 2001. |
| (8) | Incorporated by reference to Post-Effective Amendment No. 1 on Form N-6 (File No. 333-139960) filed on July 31, 2007. |
| (9) | Incorporated by reference to Post-Effective Amendment No. 14 on Form N-6 (File No. 333-191329) filed on December 17, 2018. |
| (10) | Incorporated by reference to Post-Effective Amendment No. 18 on Form N-6 (File No. 333-146507) filed on April 3, 2012. |
| (11) | Incorporated by reference to Post-Effective Amendment No. 16 on Form N-6 (File No. 333-146507) filed on April 1, 2011. |
| (12) | Incorporated by reference to Pre-Effective Amendment No. 1 on Form N-6 (File No. 333-181796) filed on August 14, 2012. |
| (13) | Incorporated by reference to Post-Effective Amendment No. 21 on Form N-6 (File No. 333-146507) filed on April 2, 2013. |
| (14) | Incorporated by reference to Post-Effective Amendment No. 23 on Form N-6 (File No. 333-146507) filed on April 1, 2015. |
| (15) | Incorporated by reference to Post-Effective Amendment No. 24 on Form N-6 (File No. 333-146507) filed on April 1, 2016. |
| (16) | Incorporated by reference to Registration Statement on Form N-6 (File No. 333-207968) filed on November 12, 2015. |
| (17) | Incorporated by reference to Post-Effective Amendment No. 26 on Form N-6 (File No. 333-146507) filed on April 3, 2017. |
| (18) | Incorporated by reference to Post-Effective Amendment No. 34 on Form N-6 (File No. 333-125790) filed on April 9, 2018. |
| (19) | Incorporated by reference to Post-Effective Amendment No. 9 on Form N-6 (File No. 333-191329) filed on May 14, 2018. |
| Name | Positions and Offices with Depositor | |
| Dennis R. Glass** | President and Director | |
| Leon E. Roday** | Executive Vice President and General Counsel | |
| Ellen G. Cooper** | Executive Vice President, Chief Investment Officer and Director | |
| Randal Freitag** | Executive Vice President, Chief Financial Officer and Director | |
| Wilford H. Fuller** | Executive Vice President and Director | |
| Jeffrey D. Coutts** | Senior Vice President and Treasurer | |
| Stephen B. Harris** | Senior Vice President and Chief Ethics and Compliance Officer | |
| Keith J. Ryan* | Vice President and Director | |
| Joseph D. Spada*** | Vice President and Chief Compliance Officer for Separate Accounts |
| * | Principal business address is 1300 South Clinton Street, Fort Wayne, Indiana 46802-3506 |
| ** | Principal business address is 150 N. Radnor Chester Road, Radnor, PA 19087 |
| *** | Principal business address is 350 Church Street, Hartford, CT 06103 |
| (a) | Brief description of indemnification provisions: |
| In general, Article VII of the By-Laws of The Lincoln National Life Insurance Company (Lincoln Life) provides that Lincoln Life will indemnify certain persons against expenses, judgments and certain other specified costs incurred by any such person if he/she is made a party or is threatened to be made a party to a suit or proceeding because he/she was a director, officer, or employee of Lincoln Life, as long as he/she acted in good faith and in a manner he/she reasonably believed to be in the best interests of, or not opposed to the best interests of, Lincoln Life. Certain additional conditions apply to indemnification in criminal proceedings. | |
| In particular, separate conditions govern indemnification of directors, officers, and employees of Lincoln Life in connection with suits by, or in the right of, Lincoln Life. | |
| Please refer to Article VII of the By-Laws of Lincoln Life (Exhibit No. 6(b) hereto) for the full text of the indemnification provisions. Indemnification is permitted by, and is subject to the requirements of, Indiana law. | |
| (b) | Undertaking pursuant to Rule 484 of Regulation C under the Securities Act of 1933: |
| Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the provisions described in Item 28(a) above or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer, or controlling person of the Registrant in the successful defense of any such action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. |
| (a) | Lincoln Financial Distributors, Inc. is the principal underwriter for Lincoln National Variable Annuity Fund A (Group); Lincoln National Variable Annuity Fund A (Individual); Lincoln National Variable Annuity Account C; Lincoln Life Flexible Premium Variable Life Account D; Lincoln National Flexible Premium Variable Life Account F; Lincoln National Flexible Premium Variable Life Account G; Lincoln Life Flexible Premium Variable Life Account JF-A; Lincoln Life Flexible Premium Variable Life Account JF-C; Lincoln Life Variable Annuity Account JF-I; Lincoln Life Variable Annuity Account JF-II; Lincoln Life Variable Annuity Account JL-A; Lincoln Life Flexible Premium Variable Life Account K; Lincoln National Variable Annuity Account L; Lincoln Life Variable Annuity Account N; Lincoln Life Variable Annuity Account Q; Lincoln Life Flexible Premium Variable |
| Life Account R; Lincoln Life Flexible Premium Variable Life Account S; Lincoln Life Variable Annuity Account T; Lincoln Life Variable Annuity Account W; Lincoln Life Flexible Premium Variable Life Account Y; and Lincoln National Variable Annuity Account 53. | |
| (b) | Following are the Officers and Directors of Lincoln Financial Distributors, Inc.: |
| Name | Positions and Offices with Underwriter | |
| Wilford H. Fuller* | President, Chief Executive Officer and Director | |
| Patrick J. Caulfield** | Vice President and Chief Compliance Officer, Senior Counsel | |
| Nancy A. Smith* | Secretary | |
| Andrew J. Bucklee* | Senior Vice President and Director | |
| Jeffrey D. Coutts* | Senior Vice President, Treasurer | |
| Thomas O'Neill* | Senior Vice President and Chief Operating Officer | |
| John C. Kennedy* | Senior Vice President and Director | |
| Christopher P. Potochar* | Senior Vice President and Director |
| * | Principal Business address is 150 N. Radnor Chester Road, Radnor, PA 19087 |
| ** | Principal Business address is 350 Church Street, Hartford, CT 06103 |
| (c) | N/A |
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933and the Investment Company Act of 1940, the Registrant, Lincoln Life Flexible Premium Variable Life Account M, has duly caused this Pre-Effective Amendment No:1 to the Initial Registration Statement on Form N-6 (File No. 333-229198; 811-08557; CIK: 0001048607) to be signed on its behalf by the undersigned duly authorized, in the City of Hartford and State of Connecticut on the 24th day of April, 2019.
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Lincoln Life Flexible Premium Variable Life Account M |
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(Registrant) |
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By |
/s/ Joshua R. Durand |
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Joshua R. Durand |
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Vice President |
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The Lincoln National Life Insurance Company |
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The Lincoln National Life Insurance Company |
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(Depositor) |
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By |
/s/ Joshua R. Durand |
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Joshua R. Durand |
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Vice President |
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Pursuant to the requirements of the Securities Act of 1933, this Pre-Effective Amendment No.:1 to the Initial Registration Statement on Form N-6 (File No. 333-229198; 811-08557; CIK: 0001048607) has been signed below on April 24, 2019, by the following persons, as officers and directors of the Depositor, in the capacities indicated:
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Signature |
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Title | |
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/s/ Dennis R. Glass * |
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President and Director | |
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Dennis R. Glass |
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/s/ Ellen G. Cooper * |
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Executive Vice President, Chief Investment Officer | |
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Ellen G. Cooper |
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/s/ Randal J. Freitag * |
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Executive Vice President; Chief Financial Officer and Director | |
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Randal J. Freitag |
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/s/Leon E. Roday* |
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Executive Vice President, Chief Counsel and Director | |
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Leon E. Roday |
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/s/ Wilford H. Fuller* |
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Executive Vice President and Director | |
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Wilford H. Fuller |
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/s/ Keith J. Ryan * |
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Vice President and Director | |
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Keith J. Ryan |
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* By |
/s/Scott C. Durocher |
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Scott C. Durocher |
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Attorney-in-Fact, pursuant to a Power-of-Attorney filed with this Registration Statement |
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POWER OF ATTORNEY
We, the undersigned directors and/or officers of The Lincoln National Life Insurance Company, hereby constitute and appoint Delson R. Campbell, Scott C. Durocher, Kimberly A. Genovese, Daniel P. Herr, Donald E. Keller, Brian A. Kroll, Michelle Grindle, Jeffrey L. Smith, Jassmin McIver-Jones and John D. Weber, individually, our true and lawful attorneys-in-fact, with full power to each of them to sign for us, in our names and in the capacities indicated below, any Registration Statements and any and all amendments to Registration Statements; including exhibits, or other documents filed on Forms N-6, N-4 or S-3 or any successors or amendments to these Forms, filed with the Securities and Exchange Commission, under the Securities Act of 1933 and/or Securities Act of 1940, on behalf of the Company in its own name or in the name of one of its Separate Accounts, hereby ratifying and confirming our signatures as they may be signed by any of our attorneys-in-fact to any such amendments to said Registration Statements as follows:
Variable Life Insurance Separate Accounts:
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Account |
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Product name |
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Lincoln Life Flexible Premium Variable Life Account D (811-04592) |
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Variable Universal Life Leadership Series |
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Lincoln Life Flexible Premium Variable Life Account F (811-05164) |
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American Legacy Life |
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Lincoln Life Flexible Premium Variable Life Account G (811-05585) |
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VUL-III |
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Lincoln Life Flexible Premium Variable Life Account J (811-08410) |
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American Legacy Variable Life |
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Lincoln Life Flexible Premium Variable Life Account K (811-08412) |
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Multi Fund Variable Life |
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Lincoln Life Flexible Premium Variable Life Account M (811-08557) |
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VULdb / VULdb ES |
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Lincoln Life Flexible Premium Variable Life Account R (811-08579) |
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SVUL / SVUL-I |
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Lincoln Life Flexible Premium Variable Life Account S (811-09241) |
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CVUL / CVUL Series III / CVUL Series III ES |
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Lincoln Life Flexible Premium Variable Life Account Y (811-21028) |
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American Legacy VULcv-III |
Variable Annuity Separate Accounts:
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Account |
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Product name |
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Lincoln National Variable Annuity Account C (811-03214) |
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Multi-Fund |
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Lincoln National Variable Annuity Account E (811-04882) |
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The American Legacy |
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Lincoln National Variable Annuity Account H (811-05721) |
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American Legacy II |
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Lincoln National Variable Annuity Account L (811-07645) |
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Group Variable Annuity |
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Lincoln Life Variable Annuity Account N (81108517) |
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ChoicePlus Assurance (A Share) |
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Lincoln Life Variable Annuity Account N (81108517) Continued |
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ChoicePlus II Advance |
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Lincoln Life Variable Annuity Account Q (811-08569) |
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Multi-Fund Group |
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Lincoln Life S-3 Filing |
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Lincoln Level Advantage B Share Indexed Variable Annuity |
Except as otherwise specifically provided herein, the power-of-attorney granted herein shall not in any manner revoke in whole or in part any power-of-attorney that each person whose signature appears below has previously executed. This power-of-attorney shall not be revoked by any subsequent power-of-attorney each person whose signature appears below may execute, unless such subsequent power specifically refers to this power-of-attorney or specifically states that the instrument is intended to revoke all prior general powers-of-attorney or all prior powers-of-attorney.
This Power-of-Attorney may be executed in separate counterparts each of which when executed and delivered shall be an original; but all such counterparts shall together constitute one and the same instrument. Each counterpart may consist of a number of copies, each signed by less than all, but together signed by all, of the undersigned.
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Signature |
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Title |
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/s/ Dennis R. Glass* |
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President, Chairman and Director |
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Dennis R. Glass |
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/s/ Ellen Cooper* |
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Executive Vice President, Chief Investment Officer and Director |
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Ellen Cooper |
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/s/ Randal J. Freitag* |
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Executive Vice President; Chief Financial Officer and Director |
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Randal J. Freitag |
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/s/ Leon E. Roday* |
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Executive Vice President, General Counsel and Director |
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Leon E. Roday |
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/s/Wilford H. Fuller* |
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Executive Vice President and Director |
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Wilford H. Fuller |
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/s/Keith J. Ryan* |
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Vice President and Director |
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Keith J. Ryan |
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We, Delson R. Campbell, Scott C. Durocher, Kimberly A. Genovese, Daniel P. Herr, Donald E. Keller, Brian A. Kroll, Michelle Grindle, Jeffrey L. Smith, Jassmin McIver-Jones and John D. Weber, have read the foregoing Power of Attorney. We are the person(s) identified therein as agent(s) for the principal named therein. We acknowledge our legal responsibilities.
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/s/Delson R. Campbell |
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/s/ Scott C. Durocher |
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Delson R. Campbell |
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Scott C. Durocher |
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/s/ Kimberly A. Genovese |
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/s/ Daniel P. Herr |
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Kimberly A. Genovese |
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Daniel P. Herr |
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/s/Donald E. Keller |
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/s/Brian A. Kroll |
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Donald E. Keller |
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Brian A. Kroll |
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/s/Michelle Grindle |
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/s/Jeffrey L. Smith |
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Michelle Grindle |
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Jeffrey L. Smith |
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/s/John D. Weber |
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/s/Jassmin McIver-Jones |
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John D. Weber |
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Jassmin McIver-Jones |
Version dated: March 2019