California Attorney General Bill Lockyer has filed a suit alleging that a Credit Lyonnais investment subsidiary used other companies to conceal the banks involvement in the acquisition of Executive Life. At the time of the purchase, California law prevented banks from owning California insurers, according to the California AGs 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.
Reproduced from National Underwriter Life & Health/Financial Services Edition, October 24, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.