A publicly traded specialty health insurer is going private.[@@]

The Blackstone Group, New York, has organized a consortium that will spend more than $1 billion to acquire much of the stock of UICI, North Richland, Texas, and turn the company into a privately held company.

UICI managers, employees and agents will invest about $125 million in the deal, UICI says.

UICI says its board has given the deal unanimous approval. The company hopes to win the regulatory approvals to complete the transaction by March 31, 2006.

The deal appears to give UICI a market value of about $1.7 billion.

UICI generates $1.8 billion in revenue per year by selling health insurance plans designed for students and for self-employed people as well as limited-benefit “mini medical” plans designed for workers who lack major medical coverage.

Shares of UICI stock now trade under the symbol UCI on the New York Stock Exchange.

Ronald Jensen, 74, who founded UICI in 1983 and had served as the company’s chairman ever since, died in an automobile crash Sept. 2 in Irving, Texas.

The UICI board has elected UICI Chief Executive Officer William Gedwed to succeed Jensen as chairman of the company.

Members of the Jensen family own about 28% of UICI’s stock.

Jensen began planning a UICI buyout in 2004, and members of the Jensen family have signed documents supporting the Blackstone deal, Gedwed says.

UICI executives say UICI now is seeking support for the deal from its 4,800 independent agents.

Chinh Chu, a senior managing director at Blackstone, says the UICI agent network was one reason it has helped to finance the UICI buyout.