Trying To Avoid A Sequel To The Executive Life Story

It hasn't been easy. John Garamendi's first act as California's insurance commissioner on Jan. 7 was to freeze auto and property insurance rates. Then, on Apr. 11, he seized Executive Life Insurance Co., the junk-bond-laden Los Angeles company, in the country's largest insurance collapse. Now, the former college wrestling champion is going mano a mano with American Express Co. in a high-stakes match over the fate of First Capital Holdings Corp. The Los Angeles company owns First Capital Life Insurance Co., whose $3.3 billion junk-bond portfolio is second only to Executive Life's. Unless the two sides come to terms, regulators could seize First Capital, creating a nightmare for policyholders and a black eye for Shearson Lehman Brothers Inc. and parent AmEx.

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