State regulators seized the main subsidiary of First Executive Corp., an insurance giant that was one of fallen financier Michael Milken's biggest customers and one of the largest junk-bond buyers ever.

Executive Life Insurance Co. was seized Thursday, said California Insurance Commissioner John Gar-a-men-di.Next to the Resolution Trust Corp., Executive Life may be the largest holder of junk bonds in the world, Garamendi said. The Resolution Trust Corp. is a federal agency set up to sell assets of savings and loans that failed when the junk-bond market collapsed.

About $6.4 million of Executive Life's $10.1 billion in assets was invested in junk bonds, said Garamendi.

Executive Life was placed in a conservatorship to protect thousands of investors as well as many pension plans, while a team of bankers, attorneys and accountants attempt to stabilize the troubled firm, he said.

In addition, Garamendi said a consortium of European companies and investors had proposed a detailed plan to take over and operate Executive Life, adding, "We hope to ensure a maximum return."

Garamendi blamed Executive Life's troubles on "the excesses of the '80s. The go-go attitude that created the junk bond phenomenon and the ensuing scandal - the company was very much a part of it."

First Executive spokesman William Adams was reported to be out of his office on Thursday. A woman in Adams' office said no statement was expected immediately.

Earlier this month, First Executive reported a loss of $465.9 million for the fourth quarter and said California regulators shut off the cash flow from its troubled insurance units.

In the past week, customers have flooded the company with calls seeking to cash in their policies, worsening its troubled financial condition even more, Garamendi said.

Until the rehabilitation is complete, customers who hold about 170,000 life insurance contracts and 75,000 annuities are barred from cashing in their policies or borrowing on them, except in cases of extreme hardship, the commissioner said.