A Sizzler Finally Fizzles

The warnings began more than a year ago. Executive Life Insurance, with 245,000 clients holding $40.5 billion of life insurance and annuities, was teetering toward insolvency. When California state insurance commissioner John Garamendi stepped before TV news cameras in Los Angeles last week, the pieces fell into place like tumblers in a lock.

As Garamendi announced that his agents were seizing control of Executive Life, attorneys for his department were securing an order in superior court enabling him to place the insurer in a state-controlled conservatorship. Across town, at the modern glass-and-steel headquarters tower of the insurer's parent company, First Executive,...