Delaware Life Class Action Targets Related-Party Private Credit Routed Through Third Parties

The suit carves out a subclass of buyers whose free-look windows closed after the insurer had received federal grand jury subpoenas but before it disclosed them.

September 24, 2026

Delaware Life Insurance Co. reported to regulators that related-party investments made up about 3% of its invested assets, or roughly $1.4 billion. A proposed class action filed September 16 in federal court in Miami alleges the true figure was many times larger. It also alleges that most of the gap sat in private-credit loans structured to look unaffiliated.

The complaint names Delaware Life, its holding companies Group 1001 Insurance Holdings and Group 1001 Inc., TWG Global Holdings, Guggenheim Partners and Mark Walter, who controls the insurer through TWG. It seeks to represent Delaware Life annuity buyers nationwide.

Exposure behind nominal counterparties

Delaware Life received federal grand jury subpoenas in February 2026, conducted an internal investigation and then restated its figures. According to the complaint, private-credit investments predominantly contingent on the performance of affiliates totaled about:

• $9.53 billion at year-end 2024;
• $16.37 billion at year-end 2025, at least 39% of invested assets;
• $16.82 billion at June 30, 2026.

A further roughly $821 million sat in funding-agreement and trust-note structures that also depend on affiliates. The reclassified audited 2025 statements put affiliated investments at about 42% of invested assets.

Only about $1 billion of the restated exposure was direct investment in affiliates, the complaint says. The rest was booked against counterparties that were not affiliates on paper but whose ability to repay depended predominantly on Walter-related parties. The plaintiff argues that this structure made the portfolio look diversified across many borrowers while concentrating billions of dollars on a single credit. The insurer’s capital and surplus is about $4.0 billion.

Delaware Life has said it understands the federal investigation to concern certain private-credit investments that an affiliate introduced to it and to Clear Spring Life and Annuity Co. The question is whether those investments should have been treated as related-party transactions. Clear Spring is another Walter-controlled insurer but is not a defendant. The complaint alleges on information and belief that the affiliate is Guggenheim. Both insurers disclosed the subpoenas in statutory filings dated June 26, 2026.

The free-look window

That timing is central to the case. The named plaintiff, Ira Rosner, is a 67-year-old Miami-Dade County resident. On April 1 he applied for a Delaware Life TruePath Income fixed index annuity. He funded it with more than $1 million through a 1035 exchange out of a Jackson National variable annuity that had cleared its surrender period. The contract was issued April 8 and delivered April 23. Its 30-day unconditional refund right expired in late May, more than a month before the subpoenas were disclosed.

In August, Delaware Life refused a request to let Rosner surrender the contract without penalty. He surrendered it anyway, paying a surrender charge and market value adjustment totaling $116,575.53. The complaint proposes a subclass of buyers whose contracts were issued on or after February 1, 2026 and whose refund rights lapsed by June 26.

The complaint also argues that the makeup of the general account was central to the bargain. Under the contract’s guaranteed values, Rosner’s account value was projected to reach zero in contract year 14. The insurer would still owe $181,677 a year in joint lifetime income, so most of the promised benefit would be payable from the insurer’s general assets.

Claims and relief

The proposed class covers purchases and exchanges from January 1, 2024 through June 26, 2026. The nationwide claims, brought under Indiana common law, are:

• fraudulent concealment;
• fraud in the inducement;
• negligent misrepresentation;
• breach of contract and of the implied covenant of good faith;
• unjust enrichment;
• aiding and abetting fraud;
• civil conspiracy.

A Florida securities claim covers Florida buyers only. The suit seeks rescission and return of premium without surrender charges or market value adjustments, compensatory and punitive damages, and declaratory and injunctive relief.

The complaint cites negative rating actions by S&P, Fitch and AM Best in July. It also cites an August agreement by TWG to swap up to $6.5 billion of Delaware Life’s related-party investments for independent assets.

TWG has publicly denied that fraud occurred at the insurers. Group 1001 said no court has found wrongdoing by the company or Delaware Life and that it intends to defend the case vigorously. The allegations have not been tested in court.