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June 26, 2009 at 08:00 PM
Conseco Inc. says it will reinsure about 104,000 of life insurance policies issued by 2 of its Conseco Insurance Group units.
The policies will be 100% reinsured and administered by Wilton Reassurance Company, Plymouth, Minn., with an effective date of January 1, 2009, says Conseco, Carmel, Ind.
“Completing this step is expected to increase Conseco’s consolidated risk-based capital ratio by 8 percentage points, along with increasing statutory capital,” said Conseco CEO Jim Prieur. “In addition, this transaction will further simplify our administrative operations as we focus on our core insurance businesses.”
As a result of the transaction, Conseco expects to record an increase to its deferred tax valuation allowance of about $18 million in the third quarter of 2009. The company also expects to record a deferred gain of about $25 million. Under generally accepted accounting principles, this gain will be recognized over the remaining life of the block. In the first quarter of 2009, the block being coinsured generated GAAP after-tax earnings before overhead of around $2.5 million, Conseco states.
