Despite vehement objections from state regulators, Conseco Inc. yesterday completed its transfer of a group of long term care policies to an independent trust.
Some 164,000 long term care policies under the Bensalem-based Conseco Senior Health Insurance Co. of Pennsylvania have been transferred to an independent trust called Senior Health Care Oversight Trust.
The move, which was approved by Pennsylvania insurance commissioner Joel Ario, legally removes that book of policies from the parent company.
Since August, state commissioners Mike Kreidler of Washington state, Steve Poizner of California and Kevin McCarthy of Florida pleaded with Mr. Ario’s office for a public hearing to allow policyholders to comment on the transition.
The regulators and other experts feared that there was insufficient capital in the trust to meet the long term care needs of the policyholders.
No such hearing was ever granted.
In addition to transferring the policies, Carmel, Ind.-based Conseco also contributed $175 million in capital to the trust, in the form of a 6% $125 million senior note due in 2013 and an $11 million contribution to the trust to provide working capital and cover future operating costs.
Another $39 million in cash was also given to the trust, including a ceding commission of $35.7 million by Conseco Life Insurance Co., also of Carmel.
Conseco did not immediately return a call for comment.