Executive Life Victims to Get Small Payout

Times Staff Writer

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.