Penn Treaty American Corp. has entered into a nonbinding letter of intent to sell a long term care insurance subsidiary, American Network Insurance Company, and American Network’s business operations to an undisclosed buyer.
Penn Treaty, Allentown, Pa., says the move is part of a rehabilitation plan for the Penn Treaty Network America Insurance Company unit.
In October, the company suspended sales of new policies and agreed to submit a rehabilitation plan to the Pennsylvania Department of Insurance by Jan. 1, 2009.
The company warned at the time of the suspension that its auditors might declare that the company is no longer a going concern if the company could not find a buyer or secure financing.
The company issued the warning after its primary reinsurer, Imagine International Reinsurance Ltd., revoked its agreement to back Penn Treaty LTC insurance policies.