NC Governor Signs Bill to Eliminate Investment Loophole
North Carolina Gov. Roy Cooper signed legislation that restricts any insurer from investing more than 10 percent of its assets in affiliated ventures. The Wall Street Journal reports that the N.C. Department of Insurance sought the legislation after entrepreneur Greg Lindberg used an unusual investment strategy to load his insurers with at least $2 billion of debt owed by other businesses in his conglomerate. Lindberg’s investment of insurance funds into affiliates at one point amounted to more than 50 percent of the assets of one of his main insurers. He was arrested in April on federal criminal charges of conspiring to bribe North Carolina Insurance Commissioner Mike Causey to obtain favorable regulatory treatment; he has pleaded not guilty and is awaiting trial.
“It is my job to protect policyholders and this law was designed in their best interest to close any loophole that could make insurance companies unable to meet their financial obligations,” Commissioner Causey said. In the federal criminal probe, the Journal reported Mr. Causey for months secretly recorded conversations with Mr. Lindberg and his aides to assist authorities.