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HC2 Gets Offer for Long-Term Care Insurance Business

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Michael Gorzynski — an investor who owns a 6.6% stake in HC2 Holdings Inc., has a seat on the HC2 board and who serves as the chairman of HC2′s Continental General Insurance Company unit — is trying to acquire the Continental insurance business from HC2.

A company controlled by Gorzynski has sent HC2 a non-binding indication of interest in buying the insurance business, HC2 says.

HC2 is a New York-based company that buys and owns a wide range of other companies, including energy companies and steel companies.

Continental Insurance Group is the “intermediate holding company” that HC2 uses to hold the insurance operations. The main insurance operating companies are Continental General and Continental LTC Inc.

Continental insurance is based in Austin, Texas, and administers coverage for about 125,000 LTCI, life, annuity and supplemental health customers.


  • A copy of the new indication of interest announcement is available here.
  • An earlier article about HC2 and Continental is available here.

HC2 used Continental Insurance Group to acquire Continental General and a sister company, United Teacher Associates Insurance, from Great American Financial Resources in 2015.

HC2 then used Continental Insurance Group to acquire Kanawha Insurance Company, an LTCI issuer, from Humana Inc. in 2018.

Although Continental has blocks of life and annuity business as well as blocks of LTCI business, it’s best known for its LTCI business, because it has been one of the few companies making deals for blocks of LTCI business.

Gorzynski made headlines about a year ago by leading an effort to change HC2′s management. Philip Falcone, the previous CEO, left the company in June, and Wayne Barr Jr. was named to fill the position.

Gorzynski joined the HC2 board in May. He was appointed chairman of Continental General in October.

Gorzynski holds a bachelor’s degree from from the University of California at Berkeley and a master’s degree in business from Harvard. He started out working as an analyst at Credit Suisse First Boston, Mellon Ventures, Spectrum Equity and Third Point. He formed MG Capital Partners in 2011.

The Proposed Deal

Gorzynski made the offer for the Continental business through a holding company that he controls, Continental General Holdings LLC.

The proposal would create a transaction with a value of about $90 million, according to HC2.

The value of the deal would be “subject to certain adjustments, consisting of, among other things, a combination of $65 million in cash and the transfer to HC2 (or cancellation) and/or modification of the terms of certain HC2 and HC2-affiliate securities owned by Continental,” according to HC2.

Gorzynski’s holding company would get Continental General and Continental LTC as well as Continental Insurance Group Ltd., according to HC2.

HC2 says that, to complete the deal, it would need approval from the Texas Department of Insurance and other consents and approvals.

Gorzynski will recuse himself from HC2 board deliberations on the Continental insurance business deal proposal, HC2 says.

“The [HC2] board intends to engage a financial advisor, following which time it expects to carefully evaluate the Indication of Interest and, if appropriate, negotiate with representatives of the buyer,” HC2 says. “The company is not in a position to make any prediction at this time as to its response to the buyer or any outcome relating to the indication of interest.”

Gorzynski’s holding company has asked HC2 for a 30-day exclusivity period, although HC2 has said it is not ready to enter into such an agreement at this time, according to a notice HC2 filed with the U.S. Securities and Exchange Commission.

— Read HC2 Completes One LTCI Deal, Seeks Moreon ThinkAdvisor.

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