North Carolina regulators are releasing funds to long-suffering policyholders who own life insurance and annuities with insurers formerly controlled by Greg Lindberg.
The insurers are now in receivership as regulators and investigators continue to unravel Lindberg’s complex web of companies and investments. Lindberg faces several counts of fraud and attempted bribery of North Carolina Insurance Commissioner Mike Causey.
Regulators are releasing 25% of funds due to policyholders of Colorado Bankers Life Insurance Co. and Bankers Life Insurance Co. The withdrawal program is already underway, regulators said.
“Letters have gone out to all eligible policyholders,” Causey said. “They should receive their partial withdrawal funds by the end of this year. We will have distributed over $1.2 billion to policyholders of Colorado Bankers and Bankers Life in receivership by the time this money goes out. We will continue to fight to recover all funds owed to policyholders of the insolvent companies in receivership in North Carolina.”
Any annuity policyholders of Colorado Bankers or Bankers Life who have not received their letter about the partial withdrawal should contact the administrator, Kroll, at 1-888-507-0441.
Insurers in receivership
On June 27, 2019, Southland National Insurance Corp., Colorado Bankers Life Insurance Co., Bankers Life Insurance Co. and Southland National Reinsurance Corp. – all owned by Lindberg – were placed in rehabilitation by order of the Superior Court of Wake County, North Carolina.
Since then, regulators have worked to unwind the complex financial web of companies and accounts controlled by Lindberg. InsuranceNewsNet wrote about the mysterious receivership process in July 2022. The year since produced little news to encourage policyholders that the end is close.
North Carolina regulators have pointed out that Causey petitioned the Rehabilitation Court to place the insurers into liquidation in November. The court granted that petition on Dec. 30, 2022, by issuing an order of liquidation with a declaration of insolvency that would trigger the state guaranty associations within 90 days of the order becoming final.
Lindberg appealed that order of liquidation. Until the Order of Liquidation becomes effective, the insurers remain in rehabilitation.
A downward spiral
Lindberg, founder of the private equity firm Eli Global, eventually acquired several insurers and grouped them together as the Global Bankers Insurance Group. Insurance profits soared and ultimately enabled Lindberg to funnel $2 billion to Eli Global, according to a Wall Street Journal report. That attracted regulators and initiated Lindberg’s downfall.
Lindberg made a special agreement with former Insurance Commissioner Wayne Goodwin allowing him to invest up to 40% of his insurance companies’ assets into affiliated business entities. In November 2016, Goodwin lost his seat to Causey, who reduced the cap on affiliated investments from 40% to 10%.
Lindberg had been sentenced to more than seven years after being convicted of attempting to bribe Causey to secure preferential regulatory treatment. He won an appeal and was released last summer after serving two years in prison. The 4th Circuit panel declared that Judge Max Cogburn had erred by giving jurors in Lindberg’s trial misleading instructions before they began deliberations.
In March, Cogburn agreed to move Lindberg’s retrial to November. Lindberg also faces a lengthy list of fraud charges in separate cases brought by the federal government and the Securities and Exchange Commission.
Senior Editor John Hilton covered business and other beats in more than 20 years of daily journalism. John may be reached at firstname.lastname@example.org. Follow him on Twitter @INNJohnH.
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