A medical stop-loss player says it wants to sell more high-deductible health insurance, short-term medical insurance, and other fully insured health products.
The company, Independence Holding Company, Stamford, Conn., says it has agreed to acquire Insurers Administrative Corp., Phoenix, a health plan administrator with a product line that includes health savings account plans.
Independence subsidiaries provide stop-loss coverage, or a kind of reinsurance, for many employers with self-funded health plans.
Insurers Administrative administers $220 million in life and health premiums and premium-equivalents for about 125,000 individuals.
Standard Security Life Insurance Company of New York and Madison National Life Insurance Company Inc. already insure about 30% of Insurers Administrative’s business, according to IHC.
When IHC completes the deal, Insurers Administrative will have a network of 50,000 agents, brokers and general agents selling health insurance and related products in 46 states, IHC says.
IHC hopes to complete the deal by Jan. 31.
Once the deal is completed, Scott Wood, president of Insurers Administrative, will become a co-chief operating officer at IHC.
Steve Wood, who is the founder of Insurers Administrative and the father of Scott Wood, will continue to be chairman of Insurers Administrative, and he has agreed to help IHC get better provider network discounts for Standard Security Life customers.
David Kettig, who has been a chief operating officer at another IHC unit, American Independence Corp., also will become an IHC co-chief operating officer, IHC says.
IHC Chief Executive Roy Thung says his company will be filing new individual and limited-benefit health products this year.
The acquisition of Insurers Administrative “transforms IHC into a life and health insurance company with comprehensive ‘in-house’ capabilities that are readily scaleable and will enable us to expand rapidly in the fully insured health market, which is much larger than the self-funded health market,” Thung says in a statement.
The medical stop-loss business was profitable in late 2005, but margins were declining, and IHC believes that margins on fully insured health coverage are less volatile, Thung says.