NU Online News Service, Jan. 2, 10:27 a.m. – Penn Treaty American Corp., Allentown, Pa., says the Florida Insurance Department has given it until Jan. 31 to raise $23 million in additional statutory surplus for the company’s largest insurance subsidiary.
The Florida department had previously required Penn Treaty to come up with the extra surplus by Dec. 31, 2002.
Penn Treaty helped create the modern long-term care insurance market, but it ran into trouble with insurance regulators in 2001 because of the regulators’ fear that it had too little capital to support its policies.
Regulators in Florida, Penn Treaty’s biggest market, set statutory surplus goals for the company in a consent order that spells out specific surplus ratio requirements for Florida.
Penn Treaty is trying to raise the cash by selling $45 million in subordinated convertible notes. It reports that it has received a tentative commitment to buy up to $20 million of the notes from a group of current investors.