The Executive Life Action Network, an activist group of former Executive Life Insurance Co. policyholders, called on California State Senator Jackie Speier, Chairperson of the Senate Insurance Committee, to investigate the reported $600 million settlement by Insurance Commissioner John Garamendi in the multi- billion civil fraud case now underway in federal court in Los Angeles.
“We are shocked and outraged that the largest financial fraud in California history would be settled for so little and without even a fight, and we’re calling on Senator Speier to stop this madness,” said Sue Watson, co-founder of the Executive Life Action Network, and mother of Katie, an annuitant who suffered brain damage as an infant due to hospital error. “The Commissioner’s own staff reported that losses to policyholders were more than $4.5 billion. How can the Commissioner now settle for less than $600 million?”
The policyholder group also asked the Senate Insurance Committee to order an audit of all Executive Life estate funds that have been paid to investment and accounting experts, lawyers, real estate experts, and department staff, supposedly to benefit policyholders’ recoveries.
“We believe that for the last 13 years Executive Life has been a ‘cash cow’ for the Department of Insurance and its secretive Conservation & Liquidation Office, which manages the billions of policyholders’ money as it ‘unwinds’ the assets of the company, supposedly for the benefit of its policyholders,” explained Maureen Marr, another ELAN co-founder. “The funds drawn out over the past 13 years belong to the policyholders and should have been spent for their benefit or distributed to them. We want to know what happened to the millions spent to supposedly assist policyholders to recover the billions lost in this blatant case of fraud.”
The activist group reiterated its call for Garamendi’s resignation if the press reports of a $600 million settlement — including only $225 million of new money — are confirmed.
“We demand full and just compensation for our losses, and we call for Commissioner Garamendi to resign from his office if this settlement is so little and so late,” said Marr.
Marr said the group would like to meet with Senator Speier as soon as possible to discuss the investigation, and the group also plans to contact the State Attorney General’s office to seek their help in stopping the settlement from going forward.
“All along we have looked forward to our day in court when all of the facts will prove that Credit Lyonnais and its co-defendants stole billions from the State of California and policyholders. Now, the Commissioner is taking that away from policyholders, and we won’t stand for it,” Marr said.
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