Security Benefit Life Insurance to restructure $14B in collateral loans amid regulatory pressure

Security Benefit Life Insurance Co., the Kansas-based insurer controlled by Wall Street dealmaker Todd Boehly, is planning to restructure roughly $14 billion worth of collateral loans after the assets attracted sustained attention from insurance regulators. The move is a preemptive strike ahead of new capital rules that could fundamentally change how insurers account for these kinds of investments. To put the scale in perspective: SBLIC held $12.9 billion in collateral loans at the end of 2024, a figure that represented approximately 47% of the entire US life insurance sector’s total exposure to such assets. What’s actually happening The restructuring centers on how the National Association of Insurance Commissioners, the body that coordinates state-level insurance regulation, plans to change risk-based capital treatment for collateral loans. The NAIC has proposed a “look-through” methodology that would assign capital charges based on the risk profile of the underlying collateral rather than treating all such loans uniformly. SBLIC’s restructuring strategy involves several parallel tracks. The company plans to let parts of its portfolio run off naturally without forced sales, restr...