Auto Insurance
California Regulator Takes Top Role in Insurance Crisis
John Garamendi, California’s first elected Insurance Commissioner, stood before 500 angry policyholders of the failed Executive Life Insurance Company, answering their questions, trying to soothe their fears and getting a warm response when he promised, “I’m working for you.”
But almost in the next breath, Mr. Garamendi felt compelled to add that “I’m no miracle worker” when it comes to salvaging the wreckage of Executive Life.
Policyholders, Mr. Garamendi told the subdued public meeting on Friday, still face the real risk of financial losses in the wake of his seizure of the Los Angeles-based insurer last month. And he repeatedly reminded his audience that the problems of Executive Life, which had invested in high-risk “junk bonds,” had their roots in the months and years before he took office in January.
Just over four months into his term as California’s insurance regulator, Mr. Garamendi, a Democratic former state legislator, is the point man in trying to solve what may be the nation’s worst insurance crisis. His handling of the situation will go a long way toward determining whether policyholders will escape potentially devastating losses, and could be the key in determining if the life insurance industry can salvage its reputation for rock-solid financial stability.
More : query.nytimes.com
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