A long term care insurer that has entered rehabilitation voluntarily says it may still have a buyer for a key subsidiary.

Penn Treaty American Corp., Allentown, Pa., has responded to an announcement issued Tuesday by Pennsylvania insurance regulators that the company’s Penn Treaty Network America and American Network Insurance Company subsidiaries have entered rehabilitation under orders issued by the Pennsylvania Commonwealth Court.

The subsidiaries are under the statutory control of the Pennsylvania Insurance Department, but Penn Treaty continues to own them, Penn Treaty says.

Penn Treaty announced in October 2008 that the subsidiaries “would voluntarily enter rehabilitation if the company was unsuccessful in its efforts to enter into a transaction prior to January 1, 2009, that provided its insurance subsidiaries with adequate capitalization,” Penn Treaty says.

Penn Treaty has a non-binding offer for American Network and substantially all of American Network’s long term care insurance policies issued after Jan. 1, 2002, Penn Treaty says.

Penn Treaty “is continuing the due diligence process for the proposed transaction, but believes that proceeds realized from the transaction will be insufficient to fully capitalize PTNA’s immediate capital needs,” Penn Treaty says.

Penn Treaty agreed to the entrance of the Pennsylvania rehabilitation orders because of the likelihood that the proceeds from the American Network deal would not provide enough capital, Penn Treaty says.