American Insurers Secretly Put $16 Billion of Retirement Money Into Private Loans

Delaware Life Insurance Company relabeled $16.4 billion of its investments this year. The money sits in private loans tied to companies it is connected to. Federal prosecutors and securities regulators are now investigating.

That money came from annuities and life policies sold to ordinary savers. Few of them know what backs the promise.

Prosecutors are Already Asking

The company’s second-quarter filing reveals grand jury subpoenas served in February. Clear Spring Life and Annuity Company also received them.

They came from the US Attorney’s Office in Manhattan. The Securities and Exchange Commission (SEC) opened a parallel investigation.

Delaware Life restated its related-party investments from ~$1.3B to ~$18B after grand jury subpoenas.Bloomberg had that in July.Nobody printed what is in the next column: $25,121,775,179 across both insurers. 43% of everything they own.

— Eric Jackson (@ericjackson) August 14, 2026

Both are examining one question. Should loans introduced by an affiliate have been flagged as related-party deals? Nobody has been charged.

Credit raters have already moved, with A.M. Best, Standard & Poor’s and Fitch each grading Delaware Life A-minus. All three attach a negative outlook or watch.

Private Credit Now Backs Retirement Promises

A survey published August 26 found something striking. It said 77% of US adults call crypto risky inside workplace retirement plans. Nearly half called it very risky.

“Americans are telling us that retirement security is becoming harder to achieve as they struggle with the affordability of everyday life. Housing, healthcare, debt and other expenses are competing with the need to save for retirement,” Dan Doonan, NIRS executive director, said in the report.

Their insurance money was already funding loans that have no public market prices. That gap says a lot about how savers judge risk.

Private equity firms drove the shift. The National Association of Insurance Commissioners (NAIC) counted 137 insurers under their ownership at the end of 2024. The count was 90 in 2018. Together, those firms held $704.3 billion.

Italy Already Ran This Experiment

Illiquidity only matters if people ask for their money. They can.

Cashing out an annuity early usually costs about 10%, according to the Bank for International Settlements (BIS). That fee falls each year.

Annuity policyholders pay surrender charges (7-10% in years 1-7). That friction is what holds the platform together. But:• $82.1B annual inflows = Ponzi mechanic• 1M+ savers, mostly retirees who watch the news• A single Gretchen Morgenson NBC story + 60 minutes = run…

— Nick Nemeth (Mispriced Assets) (@NickNemo17) May 19, 2026

Roughly half of global surrender values can be withdrawn within a week. The loans behind them take months to sell.

Eurovita showed what happened next after the Italian life insurer watched its solvency ratio slide from 230% to nearly 130% during 2022.

Rates rose, bond values fell, and customers cashed out.

Its private equity owner, Cinven, offered 100 million euros. The regulator wanted 400 million.

Italy froze withdrawals in February 2023, and the freeze held until October. Five rival insurers absorbed the policies, and savers lost nothing.

Eurovita/Cinven: flop raises concerns on buyout push into insurance https://t.co/V3MlNKsXPL | opinion

— Financial Times (@FT) July 3, 2023

Private credit is not crypto. It has a regulator, an investment-grade label, and decades of actuarial math behind it.

Still, private credit stress signals have reached levels last seen in 2017. The difference is that savers knowingly chose one of these risks.