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Life insurers face probes over related-party private credit disclosures
Regulators and prosecutors scrutinized whether private-credit investments tied to financier Mark Walter were properly labeled after Delaware Life and Clear Spring made large balance-sheet corrections.
Delaware Life Insurance Company’s 2025 balance sheet changed materially after the insurer corrected its annual filing, reclassifying about $17 billion of investments as related-party holdings, or roughly 39% of invested assets, compared with about $1.4 billion and 3% in the earlier version, according to CryptoSlate. Clear Spring Life and Annuity Company separately corrected about $4.6 billion, bringing the total revisions across companies connected to financier Mark Walter to more than $20 billion.
The corrected labels, the report says, do not prove anything conclusive about loan quality, but they highlight how portfolios built around private assets, affiliated managers, and long-dated insurance funding can be difficult to interpret even for those reviewing statutory accounts. It also notes that transactions with related entities can be permitted under state insurance oversight.
CryptoSlate reports the issue has turned federal, with Delaware Life’s second-quarter filing stating the company and Clear Spring received grand jury subpoenas from the US Attorney’s Office for the Southern District of New York in February. In parallel, the SEC opened an inquiry into whether certain private-credit investments introduced by an affiliate should have carried related-party labels, and the filing says Delaware Life is cooperating and found disclosure errors through an internal review.
No charges have been filed against Walter or either insurer, the outlet adds. The report argues the broader stakes extend beyond these companies, pointing to the use of private credit within the life insurance industry, where policy liabilities can last for decades and cash demands can still arise from policyholders, derivatives counterparties, and wholesale funders.