American Insurers Invest $16 Billion in Private Loans from Retirement Funds
Delaware Life Insurance Company has relabeled $16.4 billion of its investments into private loans tied to affiliated companies, raising concerns about transparency and risk for retirement savers. Federal prosecutors and the SEC are investigating whether these transactions should have been disclosed as related-party deals. The funds come from annuities and life insurance policies sold to ordinary investors who may not be aware of how their money is being used. Credit rating agencies A.M. Best, Standard & Poor's, and Fitch have downgraded Delaware Life with a negative outlook or watch status due to these concerns. Meanwhile, private equity ownership in the U.S. insurance sector has grown significantly since 2018, now controlling $704.3 billion across 137 insurers. The situation echoes past issues seen in Italy where an insurer faced liquidity problems and regulators had to step in with a freeze on withdrawals.
Topics: private_loans regulatory_investigation retirement_funds