(The Center Square) – North Carolina Insurance Commissioner Mike Causey is celebrating a Wake County Superior Court decision this week to liquidate two financially troubled insurance companies once led by billionaire Greg Lindberg.
The Monday court order from Judge Graham Shirley granted in Nov. 1 request from Causey to place Colorado Bankers Life Insurance Co. and Bankers Life Insurance Co. into liquidation, which means obligations will be assumed by state guaranty associations.
“This is an important first step that will allow more policyholders to get more of their money back, sooner,” Causey said in a prepared statement.
“The Department of Insurance stands ready to work with the state guaranty associations to get payments up to the guaranty limits out to policyholders as quickly as possible,” the statement read. “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.”
Lindberg, once North Carolina’s top political donor, was released this summer from a minimum-security prison in Alabama, where he was serving seven years for an alleged attempt to bribe Causey. An appeals court panel in June overturned his 2020 bribery and fraud convictions over mistakes made by the trial judge in delivering jury instructions.
Causey worked with the FBI to record and later testified a Lindberg associate promised a large donation for Causey’s campaign in exchange for a request to replace a state insurance official involved in regulating Lindberg’s businesses.
Lindberg won a new trail, set for March, when the appeals court agreed with the trial judge’s jury instructions about whether the request constituted an “official act” went too far. Lindberg remains free on electronic monitoring pending the trial.
Regulators claim Lindberg transferred millions from some of his insurance companies to other companies, which left insurers unable to pay policyholders. Court documents show Lindberg controlled four insurers with a total of about 262,000 policyholders: Colorado Bankers Life Insurance Co., Bankers Life Insurance Co., Southland National Insurance Corp. and Southland National Reinsurance Corp.
Global Growth, the parent company formerly led by Lindberg, released a statement about Monday’s court ruling that argued a plan in the works to sell the companies would have been a better option to get money to policyholders faster.
“We deeply disagree with the North Carolina Department of Insurance’s decision to liquidate these companies – and we’re surprised and disappointed things got to this point,” CEO Justin Holbrook said. “They didn’t have to.”
Global Growth had requested a continuance to “understand the NCDOI’s sudden determination that CBL and BLI should be liquidated now,” he said.
“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,” Holbrook said. “NCDOI did not approach us before filing their liquidation motion nor explain their reasoning.”
The North Carolina Insurance Guaranty caps coverage at $300,000, according to its website.
“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. “Policyholders with questions should feel free to contact customer service for CBL and BLIC; Contact information is available on their websites.