US regulatory scrutiny and asset restatements
Federal prosecutors and the US Securities and Exchange Commission are examining whether private credit investments recorded as unaffiliated were tied to other businesses controlled by US life and annuity carrier owner Mark Walter, following reports that he is seeking a buyer for the Cadillac Formula 1 team. According to AM Best, Delaware Life's affiliated investments rose to 42% of invested assets at year-end 2025 following a restatement, up from 3%, prompting the rating agency to move outlooks on Walter's life carriers to negative while citing lower risk-adjusted capital and weaknesses in financial reporting controls. TWG Global has denied wrongdoing, and no charges have been filed.
Implications for the UK bulk annuity market
The situation mirrors concerns that have driven the Prudential Regulation Authority to increase scrutiny on private credit exposures and funded reinsurance within the UK bulk purchase annuity sector. The regulator's 2026 priorities letter and consultation paper CP8/26 target asset quality and governance, proposing to align capital held against funded reinsurance deals with the treatment of corporate bonds to lift capital requirements from around 2% to 4% of covered liabilities to roughly 10%. While UK life insurers operate under strict matching adjustment rules and less exposure to middle-market loans than US peers, the case underlines the governance and asset transparency risks associated with complex private market backing.