CDI Receives $110M on Behalf of Executive Life Policyholders

The California Department of Insurance announced it has received $110 million on behalf of California policyholders of insurance sold by Executive Life Insurance Company (ELIC) and its 330,000 former policyholders. The money, received May 26 is part of a settlement won by the US Department of Justice in the criminal fraud case against Credit Lyonnais and various other French corporations and individuals, including Artemis S.A.

Credit Lyonnais and the others involved in the ELIC case fraudulently obtained control over ELIC’s junk bond portfolio and insurance assets in violation of Federal and State laws that prohibited a foreign, government-owned bank from acquiring control of a California insurance company.

“This is another positive step in our fight against insurance-related fraud in the state of California,” said Commissioner Garamendi. “The settlement funds received today represent but a fraction of the damages that ELIC and its policyholders sustained as a result of the defendants’ fraud. My Department’s civil lawsuit against the defendants is continuing, and our pursuit of justice will not cease.”

In addition to the support that the Department provided to the criminal prosecution, Commissioner Garamendi has been working to recover any ill-gotten gains through a civil lawsuit currently pending in federal district court in Los Angeles. The US Attorney’s Office secured a $770 million settlement of the criminal case against Credit Lyonnais and others involved in the Executive Life Insurance Company fraud case.

“There are real victims who suffered real losses as a result of the defendants’ fraud,” said Commissioner Garamendi. “No one, including Credit Lyonnais, should be allowed to profit from criminal and fraudulent acts.”

CDI will file a motion seeking an order authorizing distribution of the funds from the Conservation and Liquidation Court that has jurisdiction over the Executive Life estate.