Insurers controlled by Walter have been funneling over $20 billion into loans to sister parts of the empire, and to help fund that, they have tapped one of the cheapest cash spigots around. As of June, Group 1001's two largest carriers had in excess of $6 billion outstanding to the Federal Home Loan Bank of Indianapolis. That tab climbed 36% from the prior half year and was about double where it stood at the start of 2025. Group 1001's spokesperson declined to comment.
Walter is the CEO of Guggenheim Partners, and his insurance lineup includes Delaware Life Insurance Co. and Clear Spring Life and Annuity Co. While those firms do not make home loans to consumers, they hold mortgage securities the FHLB accepts as collateral.
Born in the Great Depression to keep mortgage lending alive, the FHLB system lets members post eligible assets and receive short notice advances at attractive rates. Even as many members moved away from originating home loans, they kept their memberships. Today there are 11 regional FHLBs that fund cheaply thanks to implied government support and pass that on to members, a setup supporters say steadies markets in choppy times.
The mission started with housing, but the money often fuels other activities. Rules tightly define eligible collateral, yet members can deploy the resulting cash broadly. That flexibility has lured insurers, particularly as investment firms gained sway and pushed for higher returns. Since 2013, insurers' total borrowings from the system have tripled, and their holdings of residential mortgages also climbed.
Walter helped usher in a new era for insurers alongside Wall Street names like Apollo Global Management Inc., steering premiums into less traditional bets, from private credit to sports teams. Guggenheim, for example, put together insurance capital in the hundreds of millions of dollars for a loan tied to LeBron James. Read more: LeBron Borrowed $300 Million From Insurers Advised by Guggenheim.
Among the most aggressive users of FHLB funding are Apollo's Athene and Walter's companies. At the end of last year, Athene ranked as the system's second largest borrower, behind Truist Financial Corp. Delaware Life, though smaller overall, placed third at the Indianapolis branch behind Old National Bank and Merchants Bank of Indiana.
Delaware Life typically runs hot on its borrowing line, using 90% or more of its available capacity. By the end of 2025, it was at about 97% of what it could draw. Athene was using 76% at that time.
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For context, S&P Global reported in April that the average life insurer used 41% of its capacity, with property and casualty carriers even lower. Many executives deliberately leave headroom for unexpected needs.
According to industry records, Group 1001's borrowing has grown faster than many peers and pushed further toward the top of its available limits. While some critics see creeping mission drift, not all heavy use means distress. Savvy operators often try to capture a spread by borrowing cheaply and reinvesting at higher yields.
Federal authorities are looking into more than $20 billion of loans carried by Walter's insurers that should have been identified as supporting affiliates but were not until this year. The insurers, Walter, and his TWG Global holding company have not been accused of any wrongdoing by regulators.
Critics say taxpayers are indirectly sweetening the pot. "This is a pure and simple case where the taxpayers are subsidizing funds that are given to insurance companies," said Cornelius Hurley. Hurley - who previously served as an independent director on the FHLB of Boston's board - added, "The fact they can take the balance sheet assets at any moment to get liquidity is just a gross abuse of the system."
The Indianapolis branch pushed back on that narrative. It "monitors and assesses the financial condition of its members, including the collateral pledged to secure advances," a spokesperson said. "All member advances are over-collateralized by eligible mission-related assets, which predominately include real estate-related loans and securities, and agency and US Treasury securities."
For your money, here is the takeaway: an old housing finance backstop is powering modern insurance strategies, and one high profile network is taking it further and faster than most. If regulators change the rules of that game, the cost of funding - and the returns from those reinvestments - could shift in a hurry.
