Philadelphia-based Lincoln Financial Group has entered into a reinsurance agreement with Commonwealth Annuity and Life Insurance Co. on an in-force block of universal life and variable universal life insurance policies written by The Lincoln National Life Insurance Co. and its predecessors.

The transaction took effect March 31.

Under the agreement, Commonwealth Annuity, a wholly owned subsidiary of The Goldman Sachs Group Inc., will provide 55% quota share coinsurance and Lincoln will reinsure about $1.5 billion in estimated reserves to Commonwealth Annuity. Including the release of capital required to support the block of business, Lincoln estimates the transaction will provide approximately $240 million in statutory capital relief, resulting in a risk-based capital (RBC) ratio benefit of approximately 20 percentage points for The Lincoln National Life Insurance Co., the company said.

The company expects the transaction to reduce annual consolidated net income by about $20 million.

The agreement with Commonwealth Annuity represents the transfer of a closed block of life policies and does not include distribution or future new business value. The reinsurance transaction combined with other moves taken recently by the company, such as reducing the common stock dividend and restructuring the company to reduce expenses, demonstrates the company’s ongoing commitment to managing capital effectively, particularly during this difficult market, the company said in a statement.