NU Online News Service, Dec. 18, 2003, 6:52 p.m. EST – Federal prosecutors in Los Angeles say they have made progress in settling the affairs of Executive Life Insurance Company, a California life insurer that failed in 1991.[@@]
U.S. Attorney Debra Yang announced today that her office has negotiated plea agreements with Mutuelle Assurance Artisanale de France Assurances, Chauray, France; MAAF Chairman Jean Claude Seys; Francois Pinault, a French investor who acquired Executive Life’s junk bond portfolio after the company failed; and Pinault’s holding company, Artemis S.A.
French officials reported earlier this week that they have agreed to a $770 million settlement.
A French government agency and Credit Lyonnais, a French bank that is now a unit of a competitor, Credit Agricole S.A., have agreed to pay $575 million in fines, U.S. officials say.
Seys, who has agreed to plead guilty to concealing information from U.S. regulators, must serve 5 years on probation and pay a $250,000 fine.
Pinault has agreed to help with further investigations, and Artemis has agreed to put $185 million in an escrow account that could end up making payments to Executive Life’s 325,000 former customers, officials say.
Federal and state officials say Credit Lyonnais, which was a government-owned bank in 1991, bought the assets of Executive Life and earned illegal profits on those assets around the time the insurer failed. Prosecutors got involved because state laws in effect at the time prohibited foreign governments from owning California life insurers, and federal laws prohibited banks from owning insurance companies.
Federal prosecutors and California insurance regulators say Credit Lyonnais used a variety of strategies to hide its involvement in the acquisition of Executive Life.