After 33 years with Blue Cross of California, Ray Finan thought his income was secure when he and his wife Lillian, a self-employed medical malpractice attorney, retired in 1984. He never knew that their financial security evaporated when, two years later, Blue Cross terminated its pension plan and instead bought annuities from Executive Life Insurance Co. The checks kept coming all the same. But by the time Ray Finan died in 1988, Executive Life was careering headlong toward financial disaster.
This April, California insurance commissioner John Garamendi seized the $10.1 billion insurer as it teetered on the edge of insolvency. Two...
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