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Life Health > Long-Term Care Planning

CNO to add to long-term care reinsurance hit

By Allison Bell

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CNO Financial Group Inc. says it may take a charge of about $5 million for the fourth quarter to reflect an adjustment to the valuation of a block of assets recaptured from a reinsurer in September.

Related: CNO cancels LTCI reinsurance arrangement

The Carmel, Indiana-based company recaptured about $505 million in assets from the reinsurer, Beechwood Re Ltd. of the Cayman Islands, in September 2016.

CNO agreed in December 2013 to use Beechwood Re to reinsure long-term care insurance business written by two insurance company subsidiaries. CNO took a $75.4 million charge for the fourth quarter of 2016 to reflect the cost of the breakup with the reinsurer.

CNO says in a notice filed Thursday with the U.S. Securities and Exchange Commission that it is taking the new charge because an accountant reviewed the recaptured assets and found the assets were worth less than the value given by Beechwood Re.

The size of the charge for the fourth quarter of 2016 is based on preliminary values and might change, CNO says.

Related:

No one connected dots as Platinum reported Madoff-like returns

Beechwood says clients secure as reinsurer limits Platinum risks

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