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Regulators try to clean up Greg Lindberg’s broken insurance empire by John Hilton The mysterious inner workings of the receivership process are details that no insurance agent wants to be forced to learn. If they do require that education, it likely means they have clients with policies in limbo. Bobby Cogdell found himself in that situation after Bankers Life Insurance Co. ended up in a receivership overseen by the North Carolina Department of Insurance.
Greg Lindberg
Bankers Life is one of four insurers owned by troubled billionaire Greg Lindberg. After three years of the rehabilitation process, Cogdell said he is getting frustrated for his clients. Cogdell, who runs Cogdell Insurance Agency in Lexington, Tenn., matched “about 30” clients with policies sold by Lindberg’s Bankers Life. North Carolina regulators allowed hardship withdrawals, with approval, and a onetime $10,000 payment upon request. His 6
clients need more than that, Cogdell said, citing an 80-year-old policyholder with a history of cancer who has $250,000 tied up in a Bankers Life annuity contract. “At this rate, the only way they’re going to get [their money] now is by dying, and to win by dying is not winning at all,” Cogdell said. Lindberg’s four insurers — Bankers Life, Southland National Insurance Corp., Southland National Reinsurance Corp. and Colorado Bankers Life Insurance Co. — have more than 262,000 policyholders combined, state insurance regulators have said. Only Southland had been referred to liquidation as this issue went to press. Regulators were expected to petition the court to place Bankers Life in liquidation in July, according to a source with the insurance department. Liquidation proceedings must happen for policyholders to access guaranty association funds, a backstop that reimburses policyholders up to $300,000 in most states. Of the nearly 84,000 Southland policyholders, all but two are expected to receive their full policy value, thanks to state guaranty associations. The two policyholders owed more than that will be covered up to $300,000, court documents say.
Mansions, money and prison
Lindberg won a big court victory in June, when a federal appeals court tossed out his
InsuranceNewsNet Magazine » August 2022
convictions on federal funds bribery and honest services fraud due to judicial error. Lindberg is two years into a seven-year prison sentence. The appeals court ordered that he be retried, although the government can still appeal that ruling. A May court victory should help. A North Carolina judge ordered Lindberg to cede control of his private companies to a special board that would use them to salvage the four financially troubled insurers. Court documents describe “hundreds” of affiliated companies covered by the ruling. Lindberg’s legal issues began with an alleged promise 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. In March 2020, Lindberg was found guilty of conspiracy to commit honest services wire fraud and bribery. Cracks in Lindberg’s business empire emerged well before he was indicted. 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. That made North Carolina regulators nervous. They feared Lindberg was not reserving enough funds in his insurers to be able to make the payments due to the policyholders. To read more on this story, visit bit.ly/lindberg2022
