Reinsurance agreement boosts Conseco's capital ratios

Conseco Inc. said Friday that a subsidiary has reached a reinsurance agreement with Wilton Reassurance Co. covering about 237,000 life insurance policies.
OCT 14, 2009
By  John Goff
Conseco Inc. said Friday that a subsidiary has reached a reinsurance agreement with Wilton Reassurance Co. covering about 237,000 life insurance policies. Wilton Re will pay a ceding commission of about $45 million and will 50 percent co-insure the policies with an effective date of Oct. 1, 2009, Conseco said. Conseco's Bankers Life and Casualty subsidiary will continue to administer the policies, Carmel, Ind.-based Conseco said. Bankers Life also will transfer to Wilton Re about $95 million in investment securities and policy loans, and $140 million of statutory policy and other liabilities. The transaction, expected to be completed in the current quarter, is subject to approval by insurance regulators in Illinois and Wisconsin. Conseco CEO Jim Prieur said the transaction is expected to increase his company's consolidated risk-based capital ratio by 9 percentage points, and increase statutory capital. Reinsurance is effectively insurance for insurers — it allows companies to transfer some of the risk associated with certain policies, in order to reduce the amount it might have to pay out in the event of an insurance claim. As a result of the transaction, Conseco expects to record an increase to its deferred tax valuation allowance of about $19 million in the current quarter. Conseco also expects to record a pre-tax deferred cost of reinsurance of about $30 million.

Latest News

Next-gen woman advisor managing $200M switches from UBS to Sanctuary Wealth
Next-gen woman advisor managing $200M switches from UBS to Sanctuary Wealth

Advisor joins the Partnered Independence model for new firm launch.

How did US institutional investors navigate the choppy waters of Q4, 2024?
How did US institutional investors navigate the choppy waters of Q4, 2024?

Median return for institutions managing a combined $1.4T revealed.

Trump set to hit foreign steel imports with 25% tariffs
Trump set to hit foreign steel imports with 25% tariffs

Canada, Mexico appear to be included despite pause on other levies.

Dollar gains on tariffs as trade fears intensify
Dollar gains on tariffs as trade fears intensify

Strategists see potential inflation impact, more cautious Fed.

Bond market experts expect yields to continue higher
Bond market experts expect yields to continue higher

Uncertainty set to keep upward pressure on fixed income investments.

SPONSORED Taylor Matthews on what's behind Farther's rapid growth

From 'no clients' to reshaping wealth management, Farther blends tech and trust to deliver family-office experience at scale.

SPONSORED Why wealth advisors should care about the future of federal tax policy

Blue Vault features expert strategies to harness for maximum client advantage.