Mark Walter's insurer Delaware Life sees two banks pause sale of its products amid probes

Two banks have paused selling products of Mark Walter's Delaware Life amid concerns of federal probes into how the insurer's parent company reported about $20 billion in assets that were affiliated with other entities controlled by the billionaire Los Angeles Dodgers owner, CNBC has confirmed.

The pause by the banks, Truist Financial Corp. and Fifth Third Bancorp , came to light Friday, two days after Walter's holding company, TWG Global , issued a statement saying "there has been no fraud" at Delaware Life and its affiliated company, Clear Spring Life and Annuity .

Bloomberg first reported the pause. A person familiar with the situation confirmed the pause by the banks to CNBC, speaking on condition of anonymity because it hasn't been announced.

That person said Delaware Life is continuing to meet with both banks to support existing contracts and to discuss trends in the insurance sector. The person said Delaware Life is also keeping the banks apprised of its effort to reduce the level of affiliated-party assets.

Truist has a longstanding business relationship with Delaware Life. Fifth Third only began doing business with the insurer in April, according to the person familiar.

"Our communications with key distribution partners remain open and cooperative," a spokesperson for Delaware Life told CNBC.

Truist and Fifth Third declined to comment.

The U.S. Attorney's Office in Manhattan and the Securities and Exchange Commission are investigating Delaware Life and Clear Spring, Delaware Life said in a regulatory filing.

Last September, FBI agents seized Walter's phone and computer pursuant to a warrant they executed aboard a private plane in Chicago as part of a probe of his businesses, news outlets have reported.

Both Delaware Life and Clear Spring received grand jury subpoenas in February in connection with the probes, Delaware Life said in the regulatory filing.

In a review of its affiliated- and related-party disclosures conducted after receiving the subpoenas, Delaware Life revised the share of its total invested assets classified as affiliated with other Walter companies from 3% to 42%.

The probes gained widespread attention after Walter agreed to sell his majority stake in the Los Angeles Lakers earlier this month, less than a year after buying the team.

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