NU Online News Service, Jan. 10, 9:33 a.m. – Penn Treaty American Corp., Allentown, Pa., says it has reduced its statutory capital needs by arranging for Centre Solutions (Bermuda) Ltd., Hamilton, Bermuda, to reinsure its new long-term care insurance policies.
The Centre agreement provides 50% quota share reinsurance on the first $100 million of newly issued LTC annual insurance premium. The agreement also gives Centre the option to reinsure a portion of the next $1 billion in newly issued LTC annual insurance premium with maximum quota share amounts of up to 40%.
The Pennsylvania Insurance Department has approved the agreement, Penn Treaty says.
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.
Penn Treaty has been trying to raise cash and reduce its capital needs to meet the statutory surplus goals in a consent order issued by Florida insurance regulators.