Conseco Completes Divestiture of Old Block of Fixed and Equity-Indexed...( CARMEL Ind. Oct. 12 /- Conseco In...),Health

CARMEL, Ind., Oct. 12 /PRNewswire-FirstCall/ -- Conseco, Inc. (NYSE: CNO), announced that it has completed the previously announced transaction under which three insurance companies in its Conseco Insurance Group unit coinsured, with an effective date of Jan. 1, 2007, most of their older inforce equity- indexed annuity and fixed annuity business with Reassure America Life Insurance Company ("REALIC"), a subsidiary of Swiss Re Life & Health America Inc. In the transaction, REALIC paid a ceding commission of $76.5 million.

Conseco CEO Jim Prieur said, "This transaction is an important step in improving the performance of the company. It will allow us to retire four annuity administrative systems, which will further simplify our back office and reduce our operating expenses. We will consider how best to apply the proceeds from the transaction and the $175 million of capital formerly held to support these policies to increase Conseco's return on equity, including repurchases of Conseco common stock and investments in the business."

As previously reported, Conseco expects to record after-tax charges related to the transaction in the third quarter of 2007 of approximately $65 million (resulting principally from the extinguishment of the insurance intangibles associated with the business), plus the block's earnings (or minus the block's loss) between the effective date and the close of the transaction. The block's after-tax loss for the first half of 2007 was approximately $2 million, including after-tax net realized investment losses of approximately $19 million.

Conseco, Inc.'s insurance companies help protect working American families and seniors from financial adversity: Medicare supplement, long-term care, cancer, heart/stroke and accident policies protect people against major unplanned expenses; annuities and life insurance products help people plan for their financial futures. For more information, visit Conseco's web site at