Executive Life Insurance Company
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Executive Life Insurance Company (ELIC) was once the largest life insurance company in California. Its financial problems and subsequent insolvency in 1991 [1] shocked its policyholders and the financial world.
At the time, First Executive was the biggest insurer ever to fail, which resulted primarily from money-losing investments in junk bonds. First Executive through Fred Carr had a strong association with Mike Milken and the brokerage firm Drexel Burnham Lambert Inc, whereby at the end of 1990 the company owned high-yield debt, much of it issued through Drexel, with a carrying value of $9 billion. [2] According to Robert Sobel, First Executive was involved in 90% of Drexel's underwritings, which accounted for about $40 billion in bonds from 1982 to 1987.
In 2003, Credit Lyonnais and others agreed to pay $771 million in settlements resulting from false statements to bank regulators in connection with the acquisition of junk bonds and the insurance business of the failed Executive Life Insurance Company of California. [3]
[edit] See also
[edit] References
- ^ Executive Life Insurance Company, Insolvencies and Impairments, NOLHGA website
- ^ Executive Life Insurance Company, What Fred Carr's Fall Means to You, Money Magazine, 05/06/1991
- ^ CREDIT LYONNAIS AND OTHERS TO PLEAD GUILTY AND PAY $771 MILLION IN EXECUTIVE LIFE AFFAIR, US Department of Justice press release, December 18, 2003
[edit] External links
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