ELAN Files Calif. Public Records Act Request with Commissioner to Release $4B in Policyholder Losses

December 16, 2004

The Executive Life Action Network (ELAN), an activist group of former Executive Life Insurance Co. policyholders, has filed a California Public Records Act (CPRA) request with Insurance Commissioner John Garamendi urging him to release documentation of more than $4 billion in policyholder losses that resulted from the largest financial fraud in California history.

The CPRA requires state agencies to release documents to the public upon request unless specific statutory exemptions apply.

“We’ve waited 13 years for our losses to be acknowledged,” said Sue Watson, co-founder of the Executive Life Action Network, and mother of Katie, an annuitant who suffered brain damage as an infant due to hospital error. “The Commissioner knows the facts but has declined to make them public for the entire world to see. Our losses must be acknowledged so we can receive full restitution and justice from Credit Lyonnais and the other defendants.”

Credit Lyonnais and other defendants have admitted to criminally defrauding the U.S. government, resulting in the largest criminal settlement in U.S. history. The civil lawsuit filed by Garamendi is scheduled to go to trial in February 2005. It has been reported that Executive Life policyholders suffered in excess of $4 billion in losses as a result of Credit Lyonnais’ fraudulent purchase of the company.

“The Commissioner is representing 330,000 policyholders affected by this fraud. Their losses should be at the core of his lawsuit; yet we have to resort to filing a public records request to demand that he put them on the table. Policyholders are at risk because Insurance Commissioner Garamendi has not directly countered — in public or in court — defendants’ claims that there were no real losses,” said Maureen Marr, co-founder of the network and an Executive Life policyholder activist. “We are very concerned that the statements made by the Commissioner for years — that nearly all policyholders were made whole — were made for political purposes; those misstatements are hampering the policyholders’ hopes for recoveries now that this fraud has been discovered and is being litigated.

“We are afraid that, without the release of this information, this case will be settled quietly with policyholder losses swept under the rug. We are deeply alarmed by reports in the French press that Garamendi has reduced his initial settlement demand considerably,” said Marr.

The trial in Garamendi v. Altus Finance, is scheduled to begin on Feb. 15, 2005.

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