Suitors Still Jockeying for Exec Life : Insurance: Broad Inc. is among those pressing a bid for the failed insurer.

The jockeying for position by bidders for failed Executive Life Insurance Co. is continuing this week on hopes that the insurance industry proposal conditionally recommended by Insurance Commissioner John Garamendi last Thursday could still fall through.

Among those still maneuvering is Los Angeles-based Broad Inc., which is trying to find a partner for its bid to take over Executive Life. Its effort is being made even though the financial services firm was not one of three potential buyers named by Garamendi last week.

Garamendi on Oct. 24 conditionally recommended a takeover offer from the National Organization of Life & Health Guarantee Assns. (NOLHGA), a nonprofit group representing state guaranty funds nationwide.

However, he said the NOLHGA bid for Executive Life, which was seized by state regulators in April, was contingent on meeting nine conditions by Nov. 4. Among the conditions is that NOLHGA establish its legal authority to run an insurance company.

At the same time, Garamendi urged a French investor group headed by Altus Finance and a group led by the investment banker Hellman & Friedman to keep their bids open and improve them in case the NOLHGA deal fell through.

After Garamendi makes his final recommendation, it will be up to Los Angeles Superior Court Judge Kurt Lewin to decide who will actually take over the company.

The Broad bid, which was premised on removing junk bonds from Executive Life to create a more stable company, was rejected apparently because it lacked a firm buyer for Executive Life’s junk-bond portfolio.

Broad, an insurance holding company with assets of $13 billion, was considered out of the running by some analysts after the announcement. But a top Broad official says the firm hopes that its experience in managing life insurance companies will make it an attractive partner for one of the two runner-up bidders.

“We’ve been talking to people very recently” about the possibility of forming a joint bid, said Eli Broad, chairman and chief executive of the company. He argues that his firm’s experience managing three life insurance companies makes it more qualified than the other bidders to run Executive Life.

Broad argued that Altus’ and Hellman’s interest in Executive Life is solely in acquiring the junk bonds, which have recently appreciated in value, and not primarily in running the firm as an insurance company.

Mike Sitrick, a spokesman for Altus, said the finance firm had no interest in teaming up with Broad. He said Altus does not intend to break off its partnership with Mutuelle Assurance Artisanale de France, a French insurance company. Under the French offer, MAAF would manage Executive Life and Altus would buy the insurer’s junk bonds.

Warren Hellman, a leader of the Hellman & Friedman bid, said it was not impossible that he could join up with Broad, but that it was unlikely such an alliance would emerge in the next few days.

“I wouldn’t mind doing a deal with Eli,” he said. “It’s just too late--unless things change a lot in the next couple of weeks, which they could.”

Meanwhile, legal arguments were winding up Thursday in a related case where holders of about $1.85 billion in municipal bonds backed by Executive Life guaranteed investment contracts are battling over their status in the company’s rehabilitation. Insurance regulators have relegated the so-called muni-GIC holders to “general creditor” status, which means they would be lucky to get 30 or 40 cents on the dollar, compared to the 89% to 100% payments promised to policyholders.

Judge Lewin said that the outcome of this trial will have a dramatic impact on the overall rehabilitation of the Los Angeles-based insurer. A decision is expected within a few days.