The Delaware Life lawsuit filed October 7, 2026 is a proposed class action, and its claims are allegations that no court has ruled on. The plaintiff’s own numbers show the cost of leaving early: he paid $16,602 in charges to exit a $250,000 multiyear guaranteed annuity (MYGA). He walked away with $239,425, less than he put in.

What is the Delaware Life lawsuit about?

Robert L. Kalinsky filed in federal court in South Florida, according to InsuranceNewsNet’s report on the new class action against Delaware Life. It names seven defendants.

  • Insurers: Delaware Life Insurance Co. and Clear Spring Life and Annuity Co.
  • Others: their parent and affiliated companies, Guggenheim Partners, and Mark Walter.
  • Core claim: the insurers did not disclose how much they had invested in businesses tied to Walter.
  • Proposed class: people who bought or exchanged into eligible Delaware Life or Clear Spring annuities from January 1, 2019 through June 26, 2026.

A separate suit filed in September by Ira Rosner makes similar disclosure claims about a TruePath Income annuity. Parent company Group 1001 said no court has ruled that it or Delaware Life did anything wrong. It said it intends to defend the case vigorously.

Why did Delaware Life’s affiliated investments jump?

Delaware Life reclassified a large share of its private credit holdings from unaffiliated to affiliated assets. AM Best said Delaware Life’s affiliated investments rose to 42 percent from 3 percent at year-end 2025. I covered the broader issue in my post on private credit annuity risk.

The company has reported these figures and taken steps since then.

  • June 30, 2026: $19.15 billion of $49.34 billion in general-account invested assets were affiliated, about 39 percent.
  • Asset swap: Delaware Life agreed to exchange up to $6.5 billion of affiliated investments for nonaffiliated assets, pending regulatory approval.
  • If completed in full: affiliated investments could fall to about 26 percent of general-account invested assets.

What did AM Best do to Delaware Life’s rating?

On July 31, 2026, AM Best revised the outlook to negative for Group 1001 subsidiaries. It affirmed the A- (Excellent) financial strength rating for Delaware Life and Clear Spring.

AM Best listed several reasons for the negative outlook.

  • Capital: the reclassification materially lowered the group’s risk-adjusted capitalization.
  • Execution: there is risk in carrying out the group’s remediation plan.
  • Controls: internal control weaknesses in financial reporting raised risk management concerns.
  • Investigation: the U.S. Attorney’s Office for the Southern District of New York and the SEC are looking into affiliated and related-party disclosures.

What does it cost to surrender a MYGA early?

The complaint gives a real example. Kalinsky bought a $250,000 Delaware Life MYGA issued in October 2023. After the June 2026 disclosure of reporting errors, he surrendered it and moved the money to a Vanguard IRA.

Item Amount
Premium paid (October 2023) $250,000.00
Surrender value $256,027.75
Surrender charge minus $15,325.25
Market value adjustment minus $1,277.10
Net check $239,425.40

The surrender charge alone was about 6 percent of the contract value. Together, the two deductions cost $16,602.35. That wiped out all $6,027.75 of interest he had earned, and he ended up $10,574.60 below his original premium.

A market value adjustment (MVA) changes your surrender value based on interest rates. It usually reduces the payout when rates are higher than when you bought, and it can add to it when rates are lower.

Should you surrender your Delaware Life annuity?

I can’t tell you what to do with your contract, because every contract and situation is different. What I can share is the list I would run before acting on a headline.

  1. Read your surrender schedule. Find the charge for the current contract year and the date it drops to zero.
  2. Check the MVA. Ask the company for a written surrender quote that shows the charge and the MVA in dollars.
  3. Use your penalty-free withdrawal. Many MYGAs let you take a set amount each year without a surrender charge, so check your contract for the exact amount.
  4. Know your term end date. When the term ends, you can usually move the money with no charge.
  5. Look up your guaranty limit. NOLHGA’s product coverage FAQs say the model act covers individual annuities up to $250,000 in present value, and limits vary by state.
  6. Compare both paths. Put the dollar cost of leaving now next to the cost of waiting out the term.

My post on what to do when your annuity surrender period ends covers the options once the charges are gone. If you do move money, compare current fixed annuity rates at My Annuity Store first. In short, the Delaware Life lawsuit is a reason to check your numbers, not a reason to surrender before you know what leaving costs.

Frequently Asked Questions

Has a court found Delaware Life did anything wrong?

No. The suits are proposed class actions, and Group 1001 says no court has ruled against it and it will defend the case.

What is Delaware Life’s AM Best rating?

AM Best affirmed an A- (Excellent) financial strength rating on July 31, 2026 and revised the outlook to negative.

Does an MVA apply to penalty-free withdrawals?

It depends on the contract, so check the MVA section of your contract or ask the company before you withdraw.

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