CARMEL, Ind., Nov. 12 /PRNewswire-FirstCall/ -- Conseco, Inc. (NYSE: CNO) announced today that it completed the previously announced transfer of Senior Health Insurance Company of Pennsylvania, formerly known as Conseco Senior Health Insurance Company ("Senior Health"), to Senior Health Care Oversight Trust, an independent trust (the "Trust"). In connection with the completion of the transfer, Conseco contributed $175 million to the capital of Senior Health and the Trust, as follows:
-- A 6% Senior Note due 2013 in the principal amount of $125 million, the principal of which is payable in five equal annual installments.
-- A contribution of $11 million to the Trust to provide working capital and to fund future operating expenses of the Trust.
-- Cash and cash equivalents of $39 million, including a ceding commission of $35.7 million paid by Conseco Life Insurance Company, in connection with the assignment by Senior Health of its non-long term care business to Conseco Life Insurance Company.
The transaction was subject to approval by the Pennsylvania Insurance Department, which issued its order approving the transfer of ownership earlier today.
"The completion of this transfer and the formation of the independent trust is a balanced solution for all of Conseco's constituents and Senior Health's long-term care policyholders," Conseco CEO Jim Prieur said. "The trust will operate Senior Health for the exclusive benefit of the policyholders, without a profit motive, and will be governed by a highly qualified board of trustees under the oversight of the Pennsylvania Insurance Department. In addition, we expect that Conseco will benefit from both reduced earnings volatility and better allocation of management resources on its core businesses going forward."
As previously announced, Conseco expects to record accounting charges
of approximately $1.1 billion related to the transaction, of which $503.7
million was recognized in
|SOURCE Conseco, Inc.|
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