Conseco Inc. says it has agreed to a reinsurance arrangement that could increase the company’s overall risk-based capital ratio by 9 percentage points.

Wilton Reassurance, Plymouth, Minn. – a unit of Wilton Re Holdings Ltd., Wilton, Conn. – has agreed to pay Bankers Life and Casualty Company, a Conseco subsidiary, a $45 million ceding commission and provide 50% coinsurance for a block of about 237,000 life insurance policies.

Bankers Life would continue to administer the policies.

Wilton Re would get about $95 million in investment securities and policy loans along with $140 million in liabilities.

The block of policies to be coinsured earned about $2 million before overhead in the third quarter, Conseco reports.

Conseco, Carmel, Ind., (NYSE:CNO) says it hopes Illinois and Wisconsin regulators will approve the transaction by the end of the year.

In addition to increasing Conseco’s RBC ratio by 9 percentage points, the Bankers Life deal should increase Conseco’s statutory capital by the amount of the ceding commission, according to Conseco Chief Executve James Prieur.

Conseco ended the third quarter with a risk-based capital ratio of 252%, a spokesman says.

Earlier this year, Conseco announced that Wilton Re had agreed to provide 100% coinsurance for 104,000 policies written by Conseco’s Washington National Insurance Company and Conseco Insurance Company units.