Delaware Life to divest up to $6.5 billion amid fraud investigations

Delaware Life Insurance, owned by Mark Walter, has agreed to replace up to $6.5 billion of its related-party investments with an equal amount of independent assets, according to TWG Global. The move follows intense regulatory scrutiny, with federal prosecutors and the SEC examining Walter’s empire for potential fraud tied to borrowing billions from his own insurers. TWG Global stated that the Group 1001 insurance companies are working with the Delaware Department of Insurance to resolve the identified issues.

Earlier subpoenas from a grand jury and a parallel SEC inquiry focused on whether certain private-credit holdings were mischaracterized as unaffiliated. After an internal review, Delaware Life found errors in how some related-party investments were presented, prompting S&P Global to shift its outlook to negative. Nonetheless, the insurers’ capital positions and liquidity are described as strong, and Walter recently agreed to sell the Los Angeles Lakers in a $12.5 billion transaction.