L.A.-Based SunAmerica to Buy Into Executive Life’s Successor : Insurance: Company’s move to seek a one-third stake in the deal to rehabilitate the failed carrier is a significant vote of confidence.

SunAmerica Inc., the Los Angeles financial services company headed by Eli Broad, has agreed to buy a one-third stake in the successor company to failed Executive Life Insurance Co.

SunAmerica’s investment, described as “less than $50 million,” is a significant vote of confidence in the new carrier’s prospects by a respected, California-based insurance company.

The deal will be effective upon final approval of the Executive Life rehabilitation plan that is now pending in Los Angeles Superior Court.

During the prolonged court proceedings that have followed the insurer’s seizure, some policyholders have expressed doubts about the viability of its successor, to be named Aurora National Life Assurance Co.

“We see (SunAmerica’s involvement) as further proof that Aurora has the momentum to both close this deal and be a strong, ongoing insurance company,” said Bill Schulz, a spokesman for Insurance Commissioner John Garamendi.

SunAmerica was a losing bidder in the October, 1991, auction for Executive Life. Garamendi, who had seized the junk-bond-laden insurer the previous April, instead awarded it to a French investment group led by Altus Finance Co. and Mutuelle Assurance Artisinale de France.

“We would not make an investment of this type unless we thought it was a very safe investment,” said Jana Waring Greer, senior vice president at SunAmerica.

SunAmerica described itself as a minority investor that would take no role in operating Aurora. It will, however, have one-third representation on the boards of both Aurora and its parent, New California Holding Co.

Broad has built his successful financial services firm in part by cherry-picking assets from troubled insurance firms. He is widely regarded as having excellent timing.

SunAmerica stock has rocketed from about $3 in 1990 to $28.625 currently on the New York Stock Exchange.

With $17 billion in assets, SunAmerica is the parent of Sun Life Insurance Co. of America and Anchor National Life Insurance Co., among other holdings.

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Times staff writer Tom Petruno contributed to this report.