LOS ANGELES -- The California insurance commissioner said yesterday that enough states belonging to the insurance industry's guaranty association have ratified an agreement to guarantee the group's participation in the bailout of the failed Executive Life Insurance Co.
John Garamendi, the commissioner, said that the proposal had been ratified by members of the National Organization of Life and Health Guaranty Associations representing states with policyholders who in total hold 80 percent of the value of the company's life insurance policies.
Eighty percent was the threshold for approval. The most recent state to ratify the plan was Utah.
The five states with the most policyholders -- California, Texas, Florida, Illinois and Pennsylvania -- had ratified.
The proposal, enhanced from the group's original offer, calls for the guaranty association to make up most of the losses that would otherwise be suffered by Executive Life policyholders. The plan will ultimately cost the life insurance industry about $1.9 LTC billion, or $1 billion more than originally planned.