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February 19, 2002 at 07:00 PM
NU Online News Service, Feb. 19, 12:03 p.m. – The Pennsylvania Insurance Department has approved a “corrective action plan” that allows two key subsidiaries of Penn Treaty American Corp., Allentown, Pa., to return to selling new long-term care insurance policies in Pennsylvania and 22 other states.
The plan is based on an agreement by Centre Solutions (Bermuda) Ltd., an affiliate of Zurich Financial Services A.G., to reinsure the subsidiaries’ in-force LTC insurance policies.
The subsidiaries are Penn Treaty Network America Insurance Company and American Network Insurance Company.
Centre Solutions also has an option to reinsure some of the subsidiaries’ new LTC insurance policies, Penn Treaty says.
The reinsurance agreement gives the subsidiaries room to write new LTC insurance policies by reducing their statutory risk-based capital needs, Penn Treaty adds.
Penn Treaty was one of the companies that helped establish the modern U.S. LTC insurance market back in the 1970s. The company reported growing sales, and earnings stated according to Generally Accepted Accounting Principles were strong.
The company ran into trouble in early 2001, when some state regulators questioned whether it had enough capital to support the LTC insurance policies it was selling. Penn Treaty suspended sales of new LTC policies in all states in September 2001.
In addition to Pennsylvania, Penn Treaty’s subsidiaries are now accepting LTC insurance applications in Alabama, Maine, Nevada, Washington, Delaware, Massachusetts, North Dakota, West Virginia, Hawaii, Minnesota, Oregon, Wyoming, Indiana, Mississippi, Rhode Island, Kansas, Iowa, Montana, South Dakota, Louisiana, Nebraska and Utah, the company says.
