STOCKHOM, SWEDEN - A former chief executive of Sweden's largest insurer, Skandia Insurance Co. Ltd., was sentenced to two years in prison for fraud on Wednesday, court officials said.

Lars-Eric Petersson, who was fired in April 2003, was convicted of handing out 156 million kronor ($21.5 million) in bonuses to company executives without board approval, the Stockholm District Court said in a statement. However, he was acquitted of charges of adding 37 million kronor ($5 million) to his own retirement plan without informing the board of directors.

Petersson's lawyer, Torgny Wetterberg, said he will appeal the verdict.

The 150-year-old insurance company came under heavy criticism in 2003 from media and the Swedish public for the size of bonuses paid to top executives, for an alleged improper relationship with life-insurance arm Skandia Liv and for having awarded luxury apartments to a small group of executives who have since departed.

The company is now owned by South Africa's Old Mutual PLC, which launched a hostile takeover bid last year.