North America

Executive Life award

A jury awarded US$700mn in punitive damages to the State of California against French company, Artemis for conspiring to defraud state insurance regulators in the early 1990s through its acquisition of the bankrupt local life insurer, Executive Life. The award comes months after a jury cleared Francois Pinault, the owner of Artemis, of any wrong doing. Artemis, along with the French banking group, Credit Lyonnais, stood accused of benefiting at the expense of Executive Life's policy holders from selling off the assets of the life insurer. Lawyers for the California Department of Insurance argued that Artemis itself gained $851mn from selling off Executive Life's junk bond portfolio. Credit Lyonnais reached a $600mn out of court settlement with the Department of Insurance in February. However, Artemis's lawyers are contending that the punitive award constitutes a violation of federal law because no compensatory damages were awarded. An attorney for Artemis, speaking to Reuters newsagency, said that US law clearly states that a punitive award cannot be more than 10 times the amount of compensatory damages.