NU Online News Service, April 15, 2003, 6:52 p.m. EDT – Conseco Inc., Carmel, Ind., is reporting a $7.8 billion net loss for 2002 on $4.4 billion in revenue, down from a $419 million net loss on $5.5 billion in revenue for 2001.
The net results include many unusual charges. The biggest is a $2.9 billion charge for an accounting change. The company’s operating loss, which excludes the unusual charges, was $1.6 billion.
Conseco has filed for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code. Its reorganization plan calls for it to sell its consumer finance unit, which employs 5,400 of its 10,100 employees, and focus on its life and health insurance operations.
But the company notes in its Form 10-K annual report that it intends to focus on profitable insurance products that it can sell with an imperfect credit history.
The company says it may discontinue the sale of many types of life insurance policies through independent producers and will definitely be phasing out the sale of long-term care insurance through independent producers, although it will continue to sell LTC insurance policies through its Bankers Life and Casualty Company unit.
The company is also de-emphasizing the sale of its fixed, equity-indexed and value-adjusted annuities through independent producers, although it will continue to sell annuities through career agents.
“Sales of annuities are affected by the financial strength ratings assigned to our insurance subsidiaries by independent rating agencies,” Conseco says in its Form 10-K.
Conseco will continue to sell specified disease and Medicare supplement insurance policies through independent producers, the company says.
The full text of Conseco’s Form 10-K is on the Web at http://www.sec.gov/Archives/edgar/data/719241/000071924103000008/final.txt