An auditor hired by California insurance regulators has determined that Executive Life Insurance Co. was in far worse financial condition at the end of 1990 than the insurer first reported. The accounting firm of Coopers & Lybrand, in a study conducted for the California Department of Insurance and made public at a court hearing Thursday, concluded that Executive Life, which was seized by regulators in April, was well short of its required capital level Dec. 31.
Coopers & Lybrand said the insurer's liabilities exceeded assets by $426.3-million at the end of 1990. Executive Life had reported a $528.4-million capital surplus, an excess of assets over liabilities.
The reported shortfall is the most specific figure yet used by California insurance regulators to gauge the possible losses to policy and annuity holders and other customers of Executive Life. California's insurance commissioner, John Garamendi, is seeking a buyer to inject new financing into Executive Life, but he has made it clear that some customers will sustain losses because of the company's collapse.
About 11,000 Floridians hold Executive Life insurance policies.
Coopers & Lybrand arrived at the capital shortfall of $426.3-million after revaluing a number of the insurer's assets.
Garamendi has not declared Executive Life insolvent, a legal step that he believes would restrict the insurance department's ability to find a buyer and work out a plan to minimize losses to customers.
One of Garamendi's most difficult tasks in developing a rehabilitation plan will be to forge agreements between various classes of Executive Life's customers, avoiding any delay that could result in higher losses, officials said.
UAW loses at Toyota/GM plant
SAN FRANCISCO _ Members of a dissident labor group have ousted leaders of the United Automobile Workers (UAW) union at New United Motor Manufacturing Inc., a venture between General Motors Corp. and Toyota Motor Corp. in Fremont, Calif.
In elections Wednesday, the candidate of the dissident group, the People's Caucus, defeated the incumbent president of the local. Members of the dissident group were elected to three of five other top union positions.
The caucus, loosely affiliated with a national UAW dissident group called New Directions, argues for a more traditional, adversarial relationship between the union and management.
The dissidents' victory reflects a gradual worsening of morale at the plant, which has been hailed as a successful example of how Japanese management techniques can be used in the United States.
Union representatives did not return telephone calls Friday. Michael Damer, a spokesman for New United Motor Manufacturing, said, "We believe we can work constructively with the new leadership."
The most recent contract expired June 1.