First Executive Life Sale To Aurora Closes

LOS ANGELES - The sale of $7.6 billion First Executive Life Insurance Co. to Aurora National Assurance Co. closed today, as the California Supreme Court rejected a last minute effort to block the transaction.

The closing marked the beginning of the end of a two-year legal battle over the nation's second-largest insurance failure. It was seized by the state's Department of Insurance in April 1991.

The plan will provide 92 percent of the holders of 400,000 Executive Life policies with 100 percent of their policy values.

Holders of $1.6 billion of Executive Life-backed municipal bonds petitioned the state supreme court to stop the sale because they were unhappy with their recovery. That petition was rejected yesterday.

Under a rehabilitation plan developed by the insurance department, Executive Life will become part of Aurora National, which is financed by a French investment syndicate.