NU Online News Service, Oct. 22, 2003, 6:05 p.m. EDT – The U.S. Attorney’s Office in Los Angeles is continuing to negotiate with French authorities regarding a settlement agreement involving Executive Life Insurance Company, a failed Los Angeles insurer, officials say.
A spokesman for the U.S. Attorney’s Office says the office is seeking additional information and that it has given the French authorities more time to consider the agreement.
Credit Lyonnais S.A., Paris, a French bank, acquired Executive Life in the early 1990s.
California Attorney General Bill Lockyer has filed a suit alleging that a Credit Lyonnais investment subsidiary used other companies to conceal the bank’s involvement in the acquisition of Executive Life. At the time of the purchase, California law prevented banks from owning California insurance companies, according to the California attorney general’s office.
A draft agreement worked out in September called on Credit Lyonnais and a French government agency to pay $575 million to resolve the dispute, but French officials later backed away from the deal, arguing that it would cost the French government too much money, according to press reports.
In an interview with National Underwriter last month, California Insurance Commissioner John Garamendi called the proposed settlement “a major and important step in achieving justice in this case.”
The California department stands ready to pursue the matter in court, Garamendi said.