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April 03, 2002 at 07:00 PM
NU Online News Service, April 3, 11:25 a.m. – Penn Treaty American Corp., Allentown, Pa., is hoping its 2001 financial statements will help it inspire more confidence in long-term care insurance brokers and customers.
Earlier this week, the LTC insurer reported a $49 million net loss for 2001 on $382 million in revenue, compared with $23 million in net income on $393 million in revenue for 2000.
But Penn Treaty says it had net operating income of $129,000 for the fourth quarter and net operating income of $7.1 million for the year.
Net operating income excludes “certain after-tax amounts that occurred as a result of a significant reinsurance transaction entered as a part of the company’s corrective action plan recently filed with and approved by the Pennsylvania Insurance Department,” the company says.
Perhaps more important, the company says it received an unqualified opinion from its independent auditors, attesting to the completeness and accuracy of the results.
Penn Treaty helped establish the modern LTC insurance market, but it ran into trouble with insurance regulators early in 2001, when some officials and some accountants questioned whether the company had enough capital to support its rapidly growing block of LTC insurance business.
