(The Center Square) – North Carolina Insurance Commissioner Mike Causey this week celebrates a Wake County Superior Court decision to liquidate two financially troubled insurance companies once run by billionaire Greg Lindberg.
Judge Graham Shirley’s court order Monday granted a Nov. 1 motion by Causey to put Colorado Bankers Life Insurance Co. and Bankers Life Insurance Co. in liquidation, meaning obligations assumed by state guarantors.
“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 Ministry of Insurance stands ready to work with government guarantee associations to enable policyholders to make payments up to the guarantee limits as soon as possible,” the statement said. “Meanwhile, last week I filed two more motions with the court to allow more money to be released from insurance companies directly to policyholders while state guarantor associations prepare to pay out 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. A panel of the Court of Appeals in June overturned his 2020 bribery and fraud convictions over errors made by the trial judge in giving jury instructions.
Causey worked with the FBI to keep records and later testified that a Lindberg employee had promised a large donation to Causey’s campaign in exchange for a request to replace a state insurance official involved in regulating Lindberg’s businesses was.
Lindberg won a new trial set for March when the appeals court agreed that the trial judge’s jury’s instructions on whether the motion constituted an “official act” went too far. Lindberg will remain electronically monitored pending trial.
Regulators claim Lindberg transferred millions from some of its insurance companies to other companies, leaving insurers unable to pay policyholders. Court documents show that 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 owned by Lindberg, released a statement on Monday’s court ruling, arguing that a plan to sell the companies would have been a better option to get policyholders cash quicker.
“We deeply disagree with the North Carolina Department of Insurance’s decision to liquidate these companies – and we are surprised and disappointed that it has come to this,” said CEO Justin Holbrook. “They didn’t have to.”
Global Growth asked for a sequel to “understand the NCDOI’s sudden decision that CBL and BLI should now be liquidated,” he said.
“As far as we know, nothing material has changed in relation to the insurers’ liquidity or ability to meet their current obligations to policyholders under the court’s previous orders,” Holbrook said. “NCDOI did not approach us prior to filing its winding-up application, nor did it explain its reasoning.”
North Carolina’s insurance guarantee limits coverage to $300,000, according to their website.
“We will continue to work as hard as we can to get money to innocent policyholders and we will continue to fight to ensure that every policyholder is paid in full,” Causey said. “Policyholders with questions are welcome to contact CBL and BLIC customer service; Contact information is available on their websites.”