Life Insurance Company Executive (ELIC) was once the largest life insurance company in California. The next financial and bankruptcy problem in April 1991 shocked policyholders and the financial world.
At that time, the First Executive was the largest insurer ever to fail, primarily due to investments that lost money in junk bonds. The First Executive through Fred Carr has a strong relationship with Mike Milken and brokerage firm Drexel Burnham Lambert, where in the late 1990s the company had high-yielding debts, mostly issued through Drexel, for a record value of $ 9 billion. According to Robert Sobel, the First Executive was involved in 90% of Drexel's underwriting, which accounted for about $ 40 billion in bonds from 1982 to 1987.
After the State of California took over Executive Life, the company sold its corporate junk-bond portfolio to Altus Finance, a Crà © Ã… © Lyonnais unit, in November 1991 for $ 3.25 billion. Since banks are banned under Glass-Steagall Act from owning insurance companies, CrÃÆ' © dit Lyonnais set up a group of investors to buy insurance company operations, with a new company called Aurora National Life Assurance Co. The majority of Aurora National control was sold to the Groupe ArtÃÆ'  © eg in 1994. In July 1998, an unknown French whistle blower told the California Insurance Department that CrÃÆ'Ã… © ly Lyonnais was the true buyer of the insurance company and controlled it through a secret agreement. In early 1999, the California Insurance Department sued banks and others, accused of fraud and sought $ 2 billion in damages.
In 2003, CrÃÆ'Â © dit Lyonnais and others agreed to pay $ 771 million in settlement resulting from a false statement to the bank regulator in connection with the acquisition of junk bonds and insurance business of the Executive Life Insurance Company failing California.
In 2001, Swiss Re took over Aurora's National Life policy; Swiss Re fully acquires Aurora National Life in 2012. By 2014, Aurora National Life is sold to Reinsurance Group of America.
A subsidiary, New York Life Insurance Company (ELNY), seized by New York state, which sells most businesses to MetLife, maintains a structured business completion book. Due to mismanagement, ELNY was ordered to liquidate. Benefit Assurance The Company's Association took over the assets of ELNY in 2013.
Video Executive Life Insurance Company
See also
- Guaranteed association
Maps Executive Life Insurance Company
References
External links
- Insurance Journal
- Company Benefits Guarantee Association
Source of the article : Wikipedia
0 Comments