Conseco plans to combine Conseco Health Insurance, Conseco Insurance units

Conseco Inc. said it plans to combine two insurance subsidiaries into a new entity in an attempt to save money and boost its statutory capital levels, according to a filing with the Securities and Exchange Commission. The insurer will merge Conseco Health Insurance Co. and Conseco Insurance Co. into Washington National Insurance Co., aiming to complete the transaction in the fourth quarter, pending approval from insurance commissioners in Arizona, California and Illinois. If the merger and an agreement announced on June 25 to co-insure a block of 104,000 non-core life insurance policies with Wilton Reassurance Co. had been completed by June 30, the carrier’s risk-based capital ratio would have climbed 18 percentage points to 265%, said Jim Prieur, Conseco’s chief executive. The merger will help Conseco save an estimated $2.5 million annually by eliminating the cost of filing financial reports and exams on two statutory companies. However Conseco expects to rack up a one-time $8 million charge related to the cost of updating its technology systems, modify its agent appointments and handle other merger-related changes. Once the merger is completed, the newly merged entity will have $5.3 billion in statutory assets, 925,000 policies in force and $625 million in annual premiums.