Efforts to reduce exposure to investment market ups and downs led to a dip in third-quarter earnings at a major long term care insurer.[@@]

The insurer, Penn Treaty American Corp., Allentown, Pa., is reporting $3 million in net income for the latest quarter on $92 million in revenue, compared with $42 million in net income on $150 million in revenue for the third quarter of 2004.

The company recently got out of a reinsurance arrangement that required it to record large quarterly gains and losses caused by swings in the value of a “notional experience account.”

In the third quarter of 2004, the notional account experienced a $54 million gain.

Although net income was down, premium revenue from new policy sales increased 6%, to $5.4 million, Penn Treaty says.