Executive Life Victims to Get Small Payout
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SACRAMENTO — Victims of the 1991 collapse of Executive Life Insurance Co. of California may receive small payouts thanks to the recent settlement of a federal criminal fraud case against French bank Credit Lyonnais, Insurance Commissioner John Garamendi announced Monday.
Garamendi, who seized the company because of its junk-bond-laden investment portfolio during a previous term as commissioner, said that $110 million would be distributed among 330,000 former Executive Life policyholders.
The payment is “chump change” and equivalent to about 1% of the original policy values, said Maureen Marr, who spent a decade running a policyholders group called the Action Network for Victims of Executive Life.
Half the $110 million is likely to be returned to insurance companies that paid off some of Executive Life’s obligations through a California insurance guarantee association, Marr said.
More payments to Executive Life victims could be forthcoming as part of a civil suit by the department, Garamendi said.
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