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SEC Investigates Cigna

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NU Online News Service, Nov. 1, 9:10 a.m. – Cigna Corporation, Philadelphia, announced today that the Securities and Exchange Commission has informed the company that it has opened an informal inquiry about Cigna. The company says it plans to cooperate fully with the SEC’s inquiry but did not disclose the reason for the investigation.

Cigna today also reported a consolidated net loss of $877 million for third quarter 2002 on revenues of $5.2 billion, compared to net income of $270 million on $4.8 billion in revenue for the same period in 2001.

Earnings included a nonrecurring charge of over $1 billion, a result of a charge against annuity costs as well as a reinsurance business it sold two years ago, the company said in a statement.

Excluding those charges, Cigna had an operating income of $208 million for the quarter, down from $273 million in operating income for the third quarter of 2001, an amount that excluded an $8 million after-tax net nonrecurring gain in that period.

“Our results are below our expectations and our potential, reflecting shortfalls in our health care business,” comments H. Edward Hanway, chairman and chief executive of Cigna.