New class-action lawsuit targets Delaware Life over annuity disclosures

By Noah Lopez

Delaware Life Insurance Co. and Clear Spring Life and Annuity Co. are facing a proposed class-action lawsuit alleging that they failed to adequately disclose affiliated investments to annuity buyers.

Robert L. Kalinsky filed the lawsuit Oct. 7 in the U.S. District Court for the Southern District of Florida. The complaint names seven defendants, including the two insurers, their parent and affiliated companies, Guggenheim Partners and Mark Walter.

Kalinsky alleged that the defendants misrepresented the insurers’ financial strength by failing to disclose the extent of investments tied to Walter-related businesses.

He claimed he would not have purchased or retained his annuities had he known about the investments and related federal investigations.

The lawsuit follows a separate case filed by Ira Rosner in September over similar allegations involving Delaware Life and its TruePath Income annuity.

Annuity owner alleges losses

Kalinsky said he paid $625,000 in premiums for three annuity contracts: a $250,000 Delaware Life multiyear guaranteed annuity issued in October 2023, a $250,000 Clear Spring multiyear guaranteed annuity with a November 2023 contract date, and a $125,000 Delaware Life TruePath Income fixed indexed annuity issued in August 2025.

After the insurers disclosed investment reporting errors in June 2026, Kalinsky surrendered the Delaware Life multiyear guaranteed annuity and transferred the proceeds to a Vanguard IRA.

The transaction confirmation listed a surrender value of $256,027.75. Delaware Life deducted a surrender charge of $15,325.25 and a market value adjustment of $1,277.10, leaving a net disbursement of $239,425.40.

Kalinsky alleged that the deductions were among the financial losses he incurred because he purchased the contracts without knowing the extent of the insurers’ affiliated investments. His Clear Spring annuity and Delaware Life TruePath Income contract remained in force, according to the complaint.

The lawsuit seeks damages, restitution and other relief, including the return of surrender charges and market value adjustments.

Insurers report affiliated investment exposure

The complaint centers on disclosures by Delaware Life and Clear Spring that internal reviews identified errors in the classification of certain private credit investments.

Delaware Life reported $18.25 billion in affiliated investments out of $43.88 billion in general-account invested assets at the end of 2025, or about 42%. By June 30, 2026, the company reported $19.15 billion in affiliated investments out of $49.34 billion in general-account invested assets, or about 39%.

Clear Spring reported $5.90 billion in affiliated investments out of $9.92 billion in general-account invested assets at the end of 2025, or about 59%. By June 30, 2026, it reported $4.90 billion out of $10.03 billion, or about 49%.

Both insurers said certain private credit investments had been incorrectly classified as unaffiliated rather than affiliated.

The companies said the returns on the investments were predominantly contingent on the performance of affiliates, requiring the investments to be reclassified under statutory accounting rules.

The insurers also acknowledged deficiencies in their internal controls because the misclassifications were not identified promptly.

Both companies said the accounting corrections did not change their reported capital, surplus or earnings for year-end 2024 or 2025. Their audited financial statements received unqualified independent audit opinions, according to the disclosures.

The companies disclosed that they had received grand jury subpoenas from the U.S. Attorney’s Office for the Southern District of New York in early February 2026. They also disclosed a parallel Securities and Exchange Commission investigation.

Delaware Life subsequently announced an agreement with its parent, TWG Global, to exchange up to $6.5 billion in affiliated investments for nonaffiliated assets, subject to regulatory approval.

The company said the transaction could reduce affiliated investments to about 26% of its general-account invested assets if completed in full.

Kalinsky alleged that the insurers’ reported affiliated-investment levels “made those representations materially misleading and directly affected the value and security of the guarantees.”

The complaint argues that the investment disclosures were material to annuity buyers because the contracts’ guarantees were backed by the issuing insurers’ financial strength and claims-paying ability.

Group 1001, the insurers’ parent company, said it intends to defend the lawsuit.

“Group 1001 Insurance is aware of the recently filed lawsuit. No court has ruled that Group 1001 Insurance or Delaware Life Insurance Company did anything wrong, and we intend to defend the case vigorously, consistent with our long track record of serving policyholders with integrity,” a Group 1001 spokesperson said.

Lawsuit seeks relief for annuity buyers

The complaint proposes a nationwide class covering certain people who purchased or exchanged into eligible Delaware Life or Clear Spring annuities from Jan. 1, 2019, through June 26, 2026. It also proposes a Florida subclass under state securities law.

The lawsuit includes claims of fraudulent concealment, breach of contract and the implied covenant of good faith and fair dealing, fraud in the inducement, negligent misrepresentation, aiding and abetting fraud, civil conspiracy and unjust enrichment. Kalinsky also seeks declaratory relief.

Rosner’s separate lawsuit alleges that Delaware Life failed to disclose material information about affiliated investments before he purchased a TruePath Income annuity. Rosner alleged that surrendering the contract resulted in more than $116,000 in surrender charges and market value adjustment penalties.