NC judge puts Greg Lindberg insurance companies into liquidation

A North Carolina Superior Court judge placed two financially impaired insurance companies once led by disgraced billionaire Greg Lindberg into liquidation Monday.

The Wake County Superior Court order places Colorado Bankers Life Insurance Co. and Bankers Life Insurance Co. into liquidation. In issuing the order, Judge Graham Shirley granted a Nov. 1 request made by Insurance Commissioner Mike Causey.

"This is an important step that will allow more policyholders to get more of their money back, sooner," Causey said in a statement. “In the meantime, last week I directed two additional motions to be filed with the court to allow more money to be released from the insurance companies directly to policyholders while the state guaranty associations prepare to disburse their payments."

In July, InsuranceNewsNet explored Lindberg's troubles and the arcane rules of receivership and its impact on thousands of policyholders in limbo.

Global Growth, the reorganized company once led by Lindberg, released a statement blasting the court ruling.

"First, we asked the judge for a continuance so that we could engage in discovery to understand the NCDOI's sudden determination that CBL and BLI should be liquidated now," said Global Growth CEO Justin Holbrook. "As far as we know, nothing material has changed in terms of the insurance companies' liquidity or ability to meet their current policyholder obligation under the court's prior orders. NCDOI did not approach us before filing their liquidation motion nor explain their reasoning."

Lindberg remains free after his conviction on bribery charges was tossed out by a judge in July.

Mounting problems

In March 2019, Lindberg, two business associates and the chairman of the North Carolina Republican Party, Robin Hayes, were indicted by a federal grand jury for wire fraud and bribery, among other charges.

Lindberg and his associates – coordinating efforts with Hayes – allegedly promised to donate millions of dollars to the North Carolina Republican Party. In exchange, Lindberg was to receive more favorable treatment of Global Bankers Insurance Group by regulators, investigators allege, along with the dismissal of a state regulator.

In March 2020, Lindberg was found guilty of conspiracy to commit honest services wire fraud and bribery. He was later sentenced to seven years and three months in prison.

The Yale University graduate came to the insurance industry after establishing Eli Global, a private equity firm. In 2014, Eli Global made its first insurance acquisition when it purchased a burial-policy insurer based in Alabama.

In the ensuing two years, Lindberg acquired more 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.

But this strategy of using the insurers to subsidize Lindberg’s other businesses would initiate a domino effect of mounting financial troubles.

Next steps

According to the N.C. insurance department, the liquidation order means policy obligations will be assumed by various state guaranty associations up to their state coverage limits. Standard guaranty association coverages protect policyholders up to $300,000.

“We will continue to work as hard as we can to get money out to innocent policyholders, and we will keep fighting to get every policyholder paid in full," Causey said.

According to court documents, Lindberg controlled four insurers – Colorado Bankers Life Insurance Co. and Bankers Life Insurance Co., Southland National Insurance Corp. and Southland National Reinsurance Corp. – with about 262,000 policyholders combined.

Southland National Insurance Corp., and its approximately 84,000 policyholders, was previously placed into liquidation, court documents say.

InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.

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InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.