View this article online: https://www.insurancejournal.com/news/west/2002/10/02/23467.htm
The House Government Reform Committee has planned a hearing on Oct. 10 to determine why the investigation into 1993’s Executive Life alleged fraud debacle failed to conclude by the Justice Department, according to the Los Angeles Times.
Executive Life Insurance Company was declared insolvent in 1991 after its portfolio of high-risk junk bonds lost value, resulting in the takeover by former Insurance Commissioner and current Democratic candidate John Garamendi.
The 1993 $3.2 billion sale to a supposed group of foreign investors sparked a controversy when a whistle-blower revealed evidence that French bank Credit Lyonnais allegedly purchased the company behind the investor façade. At the time, foreign banks were forbidden to own insurance companies.
The allegations prompted several lawsuits and an investigation by the U.S. Attorney’s office in Los Angeles, who recommended charges against Credit Lyonnais. The charges have been waiting for a decision by the Justice Department for more than a year.