First Executive Officers Won’t Appear Before Assembly Panel
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SACRAMENTO — Officers of First Executive Corp. have declined to appear voluntarily before an Assembly committee investigating the life insurance company’s extensive junk bond investments, officials said Tuesday.
Patrick Johnston (D-Stockton), chairman of the Assembly Finance and Insurance Committee, seeks legislation to protect policyholders against the insolvency of their life insurance company.
Los Angeles-based First Executive in January announced a $515-million writeoff against fourth-quarter profit to reflect the lower value of its junk bond portfolio.
Last month, Johnston subpoenaed Fred Carr, First Executive’s chief executive, and Doug Marcian, its chief investment officer, regarding their use of a strategy of junk bond investments engineered by Michael Milken.
In a letter, First Executive President Alan Snyder told Johnston that Carr and Marcian would not testify because of the time needed for preparation and “the adverse publicity that would be generated by a hearing in which the central focus is the company’s standing in the insurance community.”
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