Senator Elizabeth Warren has put the National Association of Insurance Commissioners on notice, asking the state regulators' umbrella group to explain how it plans to police the swelling ties between private investment firms and the life insurers they own.
In a letter sent earlier today, the Massachusetts Democrat and ranking member of the Senate Banking, Housing, and Urban Affairs Committee asked NAIC chief executive Jeffrey Johnston whether the organization is examining if carriers beyond Mark Walter's Delaware Life Insurance Co. and Clear Spring Life and Annuity Co. have engaged in similar conduct.
Both insurers, units of Group 1001, disclosed in June regulatory filings that they had received grand jury subpoenas tied to a federal probe into whether billions of dollars in loans made to Walter-linked businesses were properly disclosed as related-party transactions.
Walter is chief executive of Guggenheim Partners and co-chairman of TWG Global, the holding company behind stakes in the Los Angeles Dodgers, the Lakers, and Chelsea Football Club. His insurance companies are now at the center of a parallel Department of Justice and Securities and Exchange Commission inquiry, first reported in July.
The scale of the restatement is what appears to have caught Warren's attention. Delaware Life had originally told regulators that related-party holdings made up roughly 3% of its investments, about $1.4 billion. After an internal review prompted by the subpoenas, that figure was corrected to more than $17 billion, or upwards of 39% of the insurer's total invested assets. S&P Global Ratings subsequently revised Delaware Life's outlook to negative while affirming its A- financial strength rating.
In her letter, Warren cited NAIC data showing that life insurers' private credit holdings climbed from $386 billion in 2014 to $849 billion in 2024, more than doubling over the decade. She argued that trend deserves scrutiny because private credit assets tend to be illiquid and difficult to price, making them harder to offload if an insurer needs cash quickly during a period of market stress.
Her letter also pressed the NAIC on whether insurers are being allowed to invest excessively in companies affiliated with their own owners, potentially putting policyholder premiums at risk to benefit a parent firm.
Alternative asset managers such as Apollo Global Management have spent the past several years acquiring life insurers specifically because a captive book of policyholder premiums gives them a stable pool of capital to deploy into the private credit products they originate. That business model has reshaped a corner of the industry once seen as sleepy and conservative, and it has drawn the attention of regulators well before Walter's name entered the picture. The NAIC first adopted a set of "regulatory considerations" for private-equity-owned insurers back in 2022, and it approved a new actuarial guideline last year aimed at tightening how insurers classify complex, related-party assets on their books. U.S. Treasury Secretary Scott Bessent also met with the NAIC earlier this year specifically to discuss the sector's mounting private credit exposure.
Warren's letter suggests she isn't convinced those steps have moved fast enough. She wrote that while the NAIC has "initiated some modest reforms," many remain under development or only partially implemented, even as insurers have built up "substantial private exposure" over the past decade. Her questions to the association center on what assessments it has made since the Walter reporting broke, and what additional federal or state guardrails might be needed given the size, consolidation, and interconnectedness now built into the insurance market.
The letter is another sign that the disclosure standards governing affiliated investments are likely to tighten rather than loosen. Group 1001 has said its capital position and liquidity remain strong despite the restatement, and no charges have been filed against Walter or any of his companies. But with a sitting U.S. senator now asking the NAIC to account for its oversight in writing, and with prosecutors, the SEC, and rating agencies all already involved, the episode looks set to keep pushing private credit disclosure up the regulatory agenda for the rest of the industry as well.
Photo: Gage Skidmore, This file is licensed under the Creative Commons Attribution-Share Alike 2.0 Generic license.
