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News: 2012 Press Release
For Release: October 29, 2012
Media Calls Only: 916-492-3566
Department of Insurance Announces Jury Declines to Award Damages in Longstanding Executive Life Case
Next Steps Being Evaluated
Today a jury in United States District Court in Los Angeles rendered a verdict finding no damages in a longstanding lawsuit involving the 1991 insolvency of Executive Life Insurance Company of California (ELIC), one of California's largest life insurance companies at the time. ELIC was taken into receivership by then-Insurance Commissioner John Garamendi when the company became insolvent. The Insurance Commissioner then began management of the ELIC estate in an effort to secure proceeds for policyholders of the now insolvent insurance company.
After a first trial in 2005, a jury found that Artemis S.A., a French company, participated in a conspiracy to defraud then-Insurance Commissioner John Garamendi in connection with Artemis' acquisition of ELIC and its assets in 1991 from the Insurance Commissioner. The current trial was held to determine the amount of damages the ELIC estate incurred as a result of the fraudulent conspiracy. The jury today found no damages.
"I respect the service performed by the jury who served on this case, though I disagree with its findings," said Insurance Commissioner Dave Jones. "I am disappointed the jury did not conclude, but for the fraud by Artemis and other conspirators, Commissioner Garamendi would have accepted a competing bid from the National Organization of Life and Health Insurance Guaranty Associations (NOLHGA). We are considering all options in the wake of this disappointing decision."
The judge in the case, R. Gary Klausner, indicated his tentative decision to reinstate a $241 million restitution award. This award was issued by a different District Court judge after the first trial, and later vacated by the Ninth Circuit without prejudice to its being reinstated after the second trial. With interest since the prior trial in 2005, the restitution amount will be substantially larger today.
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