Posted on 09/06/2005 5:19:48 PM PDT by calcowgirl
Executive Life Insurance policyholders have feuded with state Insurance Commissioner John Garamendi over his 1991 seizure and resale of the company. They may find themselves in the same leaky boat, however, as the long-running financial, legal, diplomatic and political wrangle over billions of dollars in insurer assets nears a climax.
Thousands of policyholders, many of them retirees and disabled who are dependent on income from annuities, are increasingly unlikely to receive a substantial recovery from the French businessmen who acquired Executive Life and its fat portfolio of junk bonds. And that means Garamendi is increasingly unlikely to get political relief as policyholder activists and sympathetic legislators press for a no-holds-barred investigation into his actions.
Garamendi seized financially troubled Executive Life just after becoming the state's first elected insurance commissioner in 1991. He characterized it as a symbol of a new activism in the office, promising that the interests of tens of thousands of policyholders would be protected.
Garamendi later resold the company to some French investors in a deal brokered by Leon Black, who had helped assemble Executive Life's junk bond portfolio as an associate of disgraced junk bond king Michael Milken. After the sale, it was revealed that the buyers were actually fronts for a French government-owned bank, Credit Lyonnais, which touched off lengthy federal and state investigations. At the time, ownership by a foreign government was illegal.
(snip)
The Legislature's Joint Audit Committee late last month voted 9-2 to authorize the audit, acting at the behest of two state senators, Hillsborough Democrat Jackie Speier and Fair Oaks Republican Dave Cox, both of whom may have political axes to grind.
Speier and Garamendi are likely opponents for the Democratic nomination for lieutenant governor next year. Cox is a former insurance agent who often champions agents' issues. ...
(Excerpt) Read more at sacbee.com ...
My goodness, is that still going on? It was a constant pain in the posterior (not to mention the checkbook!) when I was working for a life insurance company before 1995.
It looks to be in about Chapter 16 of a 22 chapter book, lol.
Companies all over the country paid a fortune to settle that bankruptcy ... and I'll bet more of it "disappeared" than ever wound up with policyholders.
And the state sold the junk bonds at a large profit, just as Executive Life probably expected to do
Bunch of crooks, all of them. Well, I'm not sure the California Insurance and Revenue Departments were smart enough to be crooks.
And the policyholders who bought pie-in-the-sky promises weren't rocket scientists, either.
I helped two retired people 1035 exhange their Exec Life annuities back then.
For one I called EL directly, got a young guy on the phone, read him the riot act, and to my utter surprise my guy got all principal PLUS the promised interest, which they weren't paying out at the time.
Most weren't that lucky.
Interesting. It's good that a few people (other than the management, lawyers, and accountants :-), got something out of E.L.
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