NU Online News Service, Dec. 17, 11:36 a.m. – Penn Treaty American Corp., Allentown, Pa., a struggling long-term care insurer, says it is negotiating a deal that could reinsure 100% of its in-force LTC insurance policies.
The deal could help Penn Treaty jump back into the market, by reducing the amount of statutory capital the company needs to back obligations to policyholders, the company says.
Penn Treaty, a company that helped create the modern LTC insurance market in the 1960s and 1970s, always generated strong policy sales. But it stopped selling LTC policies in some states in the spring, after state insurance regulators questioned whether it had enough capital to back its policies.
Penn Treaty agreed to a voluntary suspension of new LTC policy sales in all states from Sept. 11 to Dec. 15. The company has been working with Pennsylvania insurance regulators to come up with a “corrective action plan.”
Penn Treaty now says it is addressing the concerns of the regulators by executing a non-binding letter of intent with a “major reinsurer.”