Conseco to turn LTC unit into indie trust

Conseco said that it plans to transfer Conseco Senior Health Insurance, its long-term care unit, to an independent trust.
AUG 13, 2008
By  Bloomberg
Conseco Inc. said that it plans to transfer Conseco Senior Health Insurance Co., its long-term care unit, to an independent trust. The Senior Health Care Oversight Trust will be established for the exclusive benefit of Conseco Senior Health’s LTC policyholders, and all the Bensalem, Pa.-based unit’s stock, including its $2.9 billion in assets, will be transferred to the trust. Conseco of Carmel, Ind., has also formed a transition trust and has filed for regulatory approval with Pennsylvania insurance commissioner Joel Ario to separate the LTC unit from its parent company. Once all other closing conditions are satisfied, this transition trust will merge with the independent trust. Following the transfer, the LTC unit will be known as Senior Health Insurance Company of Pennsylvania and will be led by management transferred from Conseco. Conseco expects to record some $1.2 billion in accounting charges related to the transaction. Just over $500 million of that will be reflected in the carrier’s second-quarter earnings report. In May, Conseco was slapped with a $2.3 million fine and another $30 million in restitution after a team of 40 insurance regulators investigated the LTC unit and Chicago-based Bankers Life and Casualty Insurance Co., another Conseco subsidiary. The investigation revealed lapses in the company’s LTC insurance claims and complaints processing, among other problems.

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