Marc Rowan, CEO of Apollo Global Management Inc., has publicly criticized Delaware's insurance regulators regarding their handling of Mark Walter's insurance companies. These companies are currently facing a federal probe because they mislabeled over $20 billion in investments, classifying them as unaffiliated when they were in fact tied to Walter's empire.
Rowan specifically called out the Delaware Department of Insurance, questioning their efficacy by asking, "If one was not aware of affiliate transactions relating to three high-profile sports teams that we can all name, what are you doing as a regulator?" This statement highlights a perceived failure in regulatory oversight, particularly concerning transactions involving well-known entities associated with Walter.
Walter's Delaware Life Insurance Company initially reported that only about 3% of its investment portfolio was linked to related parties. However, following federal grand jury subpoenas in February, the company corrected this figure to 42%, representing more than $17 billion in misclassified loans. Clear Spring Life and Annuity, another insurer tied to Walter, also had similar issues, bringing the total misidentified related-party assets for both companies to over $20 billion.
Regulators in Delaware have set a December 31 deadline for Walter to reduce the affiliated entanglements on his insurers' books. In response, Walter's holding company, TWG Global, announced an asset swap to address this. They plan to transfer $6.5 billion in unaffiliated assets to Delaware Life in exchange for $6.5 billion in loans the insurer had made to Walter's businesses, aiming to decrease the related-party concentration. Additionally, Walter has agreed to sell his controlling stake in the Los Angeles Lakers to help raise funds.
