Penn Treaty Subsidiaries Given OK To Write New LTC Policies
The Pennsylvania Insurance Department has approved a plan that lets two key subsidiaries of Penn Treaty American Corp., Allentown, Pa., return to the long term care insurance market in Pennsylvania and 22 other states.
Penn Treaty, one of the insurers that developed the modern U.S. LTC insurance industry, reported strong sales, but it ran into trouble in early 2001, when some state regulators asked whether it had enough capital to support its growth.
Penn Treaty agreed in September 2001 to suspend new LTC insurance sales while it dealt with regulators concerns.
Centre Solutions (Bermuda) Ltd. helped by agreeing to reinsure the in-force LTC policies at Penn Treaty Network America Insurance Company and American Network Insurance Company, Penn Treaty says.
Centre Solutions, a unit of Zurich Financial Services A.G., also has an option to reinsure many of the subsidiaries new LTC insurance policies, according to Penn Treaty.
The reinsurance arrangement will give the subsidiaries room to write new policies by reducing the amount of capital they need to support the LTC business, Penn Treaty says.
“Our policyholders, agents and shareholders benefit accordingly,” says Irving Levit, president of Penn Treaty, in a statement accompanying the deal announcement.
In addition to Pennsylvania, Penn Treatys 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, according to the company.
Penn Treaty is seeking permission to resume LTC sales in the other states, the company says.
Reproduced from National Underwriter Life & Health/Financial Services Edition, February 25, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.