Exhibit 99.1
NEWS
For Release Immediate
Contacts (News Media) Jim Rosensteele, SVP, Corporate Communications
317.817.4418
(Investors) Tammy Hill, SVP, Investor Relations
317.817.2893
Conseco Announces Settlement with SEC and New York Attorney General
Carmel, Ind., August 9, 2004 -- Conseco, Inc. (NYSE: CNO) today announced a
settlement with the Securities and Exchange Commission and the New York Attorney
General, concluding the previously disclosed joint investigation into market
timing in variable annuities issued by a former subsidiary of Conseco's
predecessor company.
Without admitting or denying the alleged findings of the investigation, two
Conseco subsidiaries - Conseco Services, LLC and Conseco Equity Sales, Inc. -
have consented to the entry of a cease and desist order requiring their future
compliance with securities laws. The settlement also calls for the subsidiaries
to pay a total of $5 million, and for the SEC and NYAG to file a claim for an
additional $10 million against the bankruptcy estate of a subsidiary of the
predecessor company.
Conseco said it is pleased to have resolved this legacy issue. Because Conseco
had previously established a reserve for potential liabilities in this matter,
the settlement is expected to have no impact on the earnings guidance Conseco
provided in its second quarter 2004 earnings release last week.
As previously reported, Conseco's predecessor sold its variable annuity
subsidiary to an unrelated third party before filing for bankruptcy in December
2002, and no Conseco affiliates have sold any new variable annuity policies
since the divestiture. Conseco, Inc. emerged from bankruptcy in September 2003.
Conseco, Inc.'s insurance companies help protect working American families and
seniors from financial adversity: Medicare supplement, long-term care, cancer,
heart/stroke and accident policies protect people against major unplanned
expenses; annuities and life insurance products help people plan for their
financial futures.
Cautionary Statement Regarding Forward-Looking Statements. Our statements, trend
analyses and other information contained in this press release relative to
markets for Conseco's products and trends in Conseco's operations or financial
results, as well as other statements contain forward-looking statements, within
the meaning of the federal securities laws and the Private Securities Litigation
Reform Act of 1995. Forward-looking statements typically are identified by the
use of terms such as "anticipate," "believe," "plan," "estimate," "expect,"
"project," "intend," "may," "will," "would," "contemplate," "possible,"
"attempt," "seek," "should," "could," "goal," "target," "on track," "comfortable
with," "optimistic" and similar words, although some forward-looking statements
are expressed differently. You should consider statements that contain these
words carefully because they describe our expectations, plans, strategies and
goals and our beliefs concerning future business conditions, our results of
operations, financial position, and our business outlook or they state other
"forward-looking" information based on currently available information.
Assumptions and other important factors that could cause our actual results to
differ materially from those anticipated in our forward-looking statements
include, among other things: (i) the potential adverse impact of our
predecessor's Chapter 11 petition on our business operations, and relationships
with our customers, employees, regulators, distributors and agents; (ii) our
ability to operate our business under the restrictions imposed by our senior
bank credit facility or agents; (ii) our ability to operate our business under
the
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Consecco (2)
August 9, 2004
restrictions imposed by our senior bank credit facility orfuture credit
facilities; (iii) our ability to improve the financial strength ratings of our
insurance company subsidiaries and the impact of prior rating downgrades on our
business; (iv) our ability to obtain adequate and timely rate increases on our
supplemental health products including our long-term care business; (v) general
economic conditions and other factors, including prevailing interest rate
levels, stock and credit market performance and health care inflation, which may
affect (among other things) our ability to sell products and access capital on
acceptable terms, the market value of our investments, and the lapse rate and
profitability of policies; (vi) our ability to achieve anticipated expense
reductions and levels of operational efficiencies; (vii) customer response to
new products, distribution channels and marketing initiatives; (viii) mortality,
morbidity, usage of health care services, persistency and other factors which
may affect the profitability of our insurance products; (ix) performance of our
investments; (x) changes in the Federal income tax laws and regulations which
may affect or eliminate the relative tax advantages of some of our products;
(xi) increasing competition in the sale of insurance and annuities; (xii)
regulatory changes or actions, including those relating to regulation of the
financial affairs of our insurance companies, including the payment of dividends
to us, regulation of financial services affecting (among other things) bank
sales and underwriting of insurance products, regulation of the sale,
underwriting and pricing of products, and health care regulation affecting
health insurance products; (xiii) the ultimate outcome of lawsuits filed against
us and other legal and regulatory proceedings to which we are subject; and (xiv)
the risk factors or uncertainties listed from time to time in our filings with
the Securities and Exchange Commission.
Other factors and assumptions not identified above are also relevant to the
forward-looking statements, and if they prove incorrect, could also cause actual
results to differ materially from those projected. All written or oral
forward-looking statements attributable to us are expressly qualified in their
entirety by the foregoing cautionary statement. Our forward-looking statements
speak only as of the date made. We assume no obligation to update or to publicly
announce the results of any revisions to any of the forward-looking statements
to reflect actual results, future events or developments, changes in assumptions
or changes in other factors affecting the forward-looking statements.
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