US LAWMAKERS TO PROBE CREDIT LYONNAIS’ BUY OF EXECUTIVE LIFE

The US House of Representatives’ government reform committee is to convene hearings on October 10 to examine Crédit Lyonnais’ acquisition of failed Executive Life Insurance in the early 1990s. It was not until 1998 that regulators in California discovered that Crédit Lyonnais engineered the purchase through a front company, in apparent violation of both a federal law then in effect that barred banks from owning insurers and a California law still in effect that bars a foreign government from owning an insurer in the state. At the time, Crédit Lyonnais was owned by the French government. Last year, federal prosecutors in Los Angeles recommended that indictments be issued over the matter. “It is time that someone is held accountable”, said California congressman Doug Ose. The committee also intends to examine ways to protect policyholders whose annuities lost their value after the bank bought Executive Life’s assets for pennies on the dollar.