A federal judge has approved a $600 million settlement between California insurance regulators and a French government entity acting on behalf of Credit Lyonnais SA.

The settlement ends a civil suit filed by California Insurance Commissioner John Garamendi to recover $3.5 billion in losses stemming from the 1992 acquisition of Executive Life Insurance Co. by Credit Lyonnais.

Garamendi claimed the entities that acquired Executive Life failed to report to state regulators their affiliation with Credit Lyonnais, which was owned by the French government. At the time, federal law prohibited banks from owning insurance companies.

More than 300,000 former policyholders lost their annuities and death benefits after Executive Life lost money on a $6 billion portfolio of junk bonds.

Under the settlement, Garamendi will get $516.5 million to pay back Executive Life policyholders. About $75 million will go to Sierra National Life Insurance Holdings Inc., which also sued Credit Lyonnais.

The settlement, which was tentatively agreed upon in February, includes Credit Lyonnais and CDR, the French entity set up to manage the money-losing assets of the bank. It does not include Artemis SA, a holding company controlled by French billionaire Francois Pinault, which went to trial in July. In that trial, a Los Angeles jury awarded $700 million in punitive damages to state regulators. A federal judge has not approved the deal.

In December 2003, Credit Lyonnais pleaded guilty to federal charges and agreed to pay $772 million to settle the criminal charges.