Any agent who had clients with Executive Life policies in 1991 who were subsequently pulverized by the CA Dept. of Insurance\’s \”conservation\” and \”rehabilitation plan\” ought not read any great good news into this Insurance Journal story to pass along to those clients. After 14 years, surely the Insurance Journal would know better than to rehash the Department\’s press statements without looking elsewhere for the truth regarding Executive Life, including a reading of Judge Matz\’s decision. Our Executive Life Action Network will update our website early next week and include a copy of Judge Matz\’s recent ruling. The Judge is highly critical of Commissioner Garamendi\’s case, and writes that only a portion of the recoveries will actually go to policyholders, and that most of the recoveries were effected through the US Attorney\’s federal criminal case. For example, of the $190 million trumpeted in this article, $185 million came from the federal criminal settlement. (See http://www.executivelife.org after Nov. 29th.)
It\’s too soon to tell how much policyholders will recover and when there will be distributions. Some critical issues remain:
(1) The guaranty associations (NOLHGA) are claiming 50% of all distributions although they put no evidence on the record as to how much they have actually paid out to policyholders. Policyholders have filed CA Public Record Requests for proof of their payments, but the Dept. of Insurance says they \”don\’t have that information.\”
(2) There are 300,000 policyholders with more than $4 billion in policy losses, so don\’t have heightened expectations.
(3) There are many parties that share in recoveries, including the Commissioner\’s outside attorney who is apparently getting a significant % from both the federal criminal settlements ($771m) AND the civil settlements (est. at $226m).
(4) Appeals may hold up distributions.
(5) Policyholders who \”opted out\” of Aurora may receive nearly twice as much as those who \”opted in\” thanks to NOLHGA\’s claim for a 50% recovery from these amounts. (There is a section of the court approved plan that says that policyholders will receive 110% of their account values before NOLHGA receives trust distributions, which is not being honored here, if in fact it was honored previously in earlier trust distributions. Again, no one is saying.)
(6) Commissioner Garamendi never put policyholder\’s actual policy losses into evidence (more than $4 billion)during the recent fraud litigation. It\’s no wonder that the jury didn\’t find compensatory damages. Then when they did find punitive damages ($700 m), that amount was reversed as the law allegedly states that you can\’t recover punitive without compensatory damages. Commissioner Garamendi stated during trial that his handling of the ELIC rehabilitation plan was \”a home run for policyholders.\” For years prior to the discovery of the fraud to which several French defendants pleaded guilty to federal criminal charges, Commissioner Garamendi ran for two statewide offices in which he ran on the claim that either 95% or 92% of all ELIC policyholders were made whole. He\’s running for CA Lt. Gov. next year, obviously on the same claim.
(6) To check on distributions if you were an \”opt in\” (even if you eventually surrendered), call Aurora at 800-265-2652. To check on distributions if you were an \”opt out\” call Willard Roberts at the Dept. of Insurance at 415-676-5034.
My father recently passed away of Alzheimer’s, a few years after my mother’s death. My siblings and I found a few hundred shares of First Executive Corp. stock certificates among their belongings. We were unaware of them until my father’s passing, and did not know that my parents had been among the victims of the First Executive/Executive Life scandal. Our question is whether these stock certificates now have any value (some date to the mid-1960s, others to the mid-1980s). Any information would be appreciated.
Any agent who had clients with Executive Life policies in 1991 who were subsequently pulverized by the CA Dept. of Insurance\’s \”conservation\” and \”rehabilitation plan\” ought not read any great good news into this Insurance Journal story to pass along to those clients. After 14 years, surely the Insurance Journal would know better than to rehash the Department\’s press statements without looking elsewhere for the truth regarding Executive Life, including a reading of Judge Matz\’s decision. Our Executive Life Action Network will update our website early next week and include a copy of Judge Matz\’s recent ruling. The Judge is highly critical of Commissioner Garamendi\’s case, and writes that only a portion of the recoveries will actually go to policyholders, and that most of the recoveries were effected through the US Attorney\’s federal criminal case. For example, of the $190 million trumpeted in this article, $185 million came from the federal criminal settlement. (See http://www.executivelife.org after Nov. 29th.)
It\’s too soon to tell how much policyholders will recover and when there will be distributions. Some critical issues remain:
(1) The guaranty associations (NOLHGA) are claiming 50% of all distributions although they put no evidence on the record as to how much they have actually paid out to policyholders. Policyholders have filed CA Public Record Requests for proof of their payments, but the Dept. of Insurance says they \”don\’t have that information.\”
(2) There are 300,000 policyholders with more than $4 billion in policy losses, so don\’t have heightened expectations.
(3) There are many parties that share in recoveries, including the Commissioner\’s outside attorney who is apparently getting a significant % from both the federal criminal settlements ($771m) AND the civil settlements (est. at $226m).
(4) Appeals may hold up distributions.
(5) Policyholders who \”opted out\” of Aurora may receive nearly twice as much as those who \”opted in\” thanks to NOLHGA\’s claim for a 50% recovery from these amounts. (There is a section of the court approved plan that says that policyholders will receive 110% of their account values before NOLHGA receives trust distributions, which is not being honored here, if in fact it was honored previously in earlier trust distributions. Again, no one is saying.)
(6) Commissioner Garamendi never put policyholder\’s actual policy losses into evidence (more than $4 billion)during the recent fraud litigation. It\’s no wonder that the jury didn\’t find compensatory damages. Then when they did find punitive damages ($700 m), that amount was reversed as the law allegedly states that you can\’t recover punitive without compensatory damages. Commissioner Garamendi stated during trial that his handling of the ELIC rehabilitation plan was \”a home run for policyholders.\” For years prior to the discovery of the fraud to which several French defendants pleaded guilty to federal criminal charges, Commissioner Garamendi ran for two statewide offices in which he ran on the claim that either 95% or 92% of all ELIC policyholders were made whole. He\’s running for CA Lt. Gov. next year, obviously on the same claim.
(6) To check on distributions if you were an \”opt in\” (even if you eventually surrendered), call Aurora at 800-265-2652. To check on distributions if you were an \”opt out\” call Willard Roberts at the Dept. of Insurance at 415-676-5034.
How this this policy settlement effect
me as a policy holder?
My father recently passed away of Alzheimer’s, a few years after my mother’s death. My siblings and I found a few hundred shares of First Executive Corp. stock certificates among their belongings. We were unaware of them until my father’s passing, and did not know that my parents had been among the victims of the First Executive/Executive Life scandal. Our question is whether these stock certificates now have any value (some date to the mid-1960s, others to the mid-1980s). Any information would be appreciated.