Credit Lyonnais and a French government entity set up to manage the bank’s failed assets agreed Tuesday to a tentative settlement of $600 million in a civil suit filed by California Insurance Commissioner John Garamendi, according to a spokesman for the state Department of Insurance.

The fraud suit, which is scheduled to go to trial this week, sought to recover at least $3.5 billion in losses stemming from the 1992 acquisition of Executive Life Insurance Co. by Credit Lyonnais in violation of federal law.

Norman Williams, the spokesman, said the settlement offer would not affect jury selection proceedings or the trial.

Credit Lyonnais’ settlement, which must be approved by a federal judge, also includes CDR, a French government entity set up to manage the money-losing assets of the bank. Sierra National Insurance Inc., a failed suitor for Executive Life that also sued Credit Lyonnais, must sign off on the deal, which will give them a portion of the settlement.

On Monday, Aurora National Life Assurance Co. of Inglewood agreed to settle for $80 million. Its parent company, Artemis, a French firm accused of profiting from Executive Life’s junk bond portfolio, would be the only significant defendant left in the case if the settlements are approved.

Garamendi claims the entities that acquired Executive Life had failed to report to California regulators their affiliation with Credit Lyonnais, which was owned by the French government at the time and made millions of dollars in profits from the sale of Executive Life’s junk bonds. 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.

In December 2003, Credit Lyonnais pleaded guilty to federal charges of making false statements to U.S. banking regulators for the bank deal. The bank, along with another French-owned company, agreed to pay $772 million to settle the criminal charges.