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November 13, 2002 at 07:00 PM
NU Online News Service, Nov. 13, 4:39 p.m. – Penn Treaty American Corp., Allentown, Pa., is reporting a $24 million net loss for the third quarter on $161 million in revenue, compared with $4.1 million in net income on $90 million in revenue for the third quarter of 2001.
Penn Treaty, a company that helped create the modern long-term care insurance market, has been working to overcome regulators’ concerns about the adequacy of the capital reserves backing its obligations to policyholders.
Results for the latest quarter include the cost of setting aside an additional $83 million in claims reserves. Although the cost cut the company’s net income, it did not require any cash expenditures, the company says.
Penn Treaty says it hopes to sell $25 million in new stock by Dec. 31 to come up with the capital it needs to meet regulators’ requirements and support new sales of long-term care coverage. The company first reported plans for the stock sale in early October.
