Calif. recovers $1.25B in 2006 from failed insurers

SACRAMENTO, Calif.--California Insurance Commissioner John Garamendi has announced a record $1.25 billion recovery for the policyholders of failed insurers during 2006.

Payments include $377 million to the former policyholders of the failed Executive Life Insurance Co., which was taken into receivership in 1991.

In addition, the Conservation and Liquidation Office disbursed $540 million to the policyholders and creditors of Mission Insurance Group Inc., which was put in liquidation in 1987.

The CLO also collected $168 million from the estate of Fremont Indemnity Co., a workers compensation insurer that was placed in liquidation in 2003. This disbursement will be paid to the California Insurance Guaranty Assn.

Mr. Garamendi, in his role as statutory liquidator, has distributed more than $2.74 billion to policyholders and claimants of failed insurers since he resumed office in 2003, according to the department. Altogether, the CLO closed 33 failed insurance company estates, representing 61% of the 54 estates that were open at the time the commissioner took office.