Exhibit 99.1
NEWS
For Release Immediate
Contacts (News Media) Tony Zehnder, Corporate Communications 312.396.7086
(Investors) Scott Galovic, Investor Relations 317.817.3228
Conseco Receives Approval to Complete Reinsurance Transaction with Wilton Re
Carmel, Ind., September 8, 2009 - Conseco, Inc. (NYSE:CNO) today announced that
it has received the required regulatory approvals for the previously announced
transaction under which two insurance companies in its Conseco Insurance Group
are coinsuring, with an effective date of January 1, 2009, approximately 104,000
non-core life insurance policies with Wilton Reassurance Company ("Wilton Re"),
a Minnesota reinsurance company.
"This transaction improves Conseco's consolidated risk-based capital ratio and
increases statutory capital," said Conseco CEO Jim Prieur. "In addition, it
further simplifies our administrative operations as we focus on our core
insurance businesses."
In the transaction, Wilton Re is paying a ceding commission of approximately
$57.5 million, 100% coinsuring the policies, and will take over responsibility
for future administration of the coinsured policies. The Conseco companies are
transferring to Wilton Re approximately $409 million in cash and policy loans
and approximately $466 million of statutory policy and other reserves.
As previously disclosed, most of the policies involved in the transaction were
issued by companies that were later acquired by Conseco. Approximately 70% of
the policies being coinsured are from Washington National Insurance Company and
the remainder are from Conseco Insurance Company.
As a result of the transaction, Conseco expects to record an increase to its
deferred tax valuation allowance of approximately $20 million in the third
quarter of 2009. Conseco also expects to record a deferred gain of approximately
$23 million. In accordance with generally accepted accounting principles
("GAAP"), this gain will be recognized over the remaining life of the block. In
the first six months of 2009, the coinsured block generated GAAP after-tax
earnings before overhead of approximately $5.0 million.
Conseco, Inc.'s insurance companies help protect working American families and
seniors from financial adversity: Medicare supplement, long-term care, cancer,
critical illness and accident policies protect people against major unplanned
expenses; annuities and life insurance products help people plan for their
financial futures. For more information, visit Conseco's website at
www.conseco.com.
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Conseco (2)
September 8, 2009
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) general economic, market and political
conditions, including the performance and fluctuations of the financial markets
which may affect our ability to raise capital or refinance existing indebtedness
and the cost of doing so; (ii) our ability to continue to satisfy the financial
ratio and balance requirements and other covenants of our debt agreements; (iii)
our ability to generate sufficient liquidity to meet our debt service
obligations and other cash needs; (iv) our ability to obtain adequate and timely
rate increases on our supplemental health products, including our long-term care
business; (v) the receipt of required regulatory approvals for dividend and
surplus debenture interest payments from our insurance subsidiaries; (vi)
mortality, morbidity, the increased cost and usage of health care services,
persistency, the adequacy of our previous reserve estimates and other factors
which may affect the profitability of our insurance products; (vii) changes in
our assumptions related to the cost of policies produced or the value of
policies in force at the effective date; (viii) the recoverability of our
deferred tax asset and the effect of potential ownership changes and tax rate
changes on its value; (ix) changes in accounting principles and the
interpretation thereof; (x) our ability to achieve anticipated expense
reductions and levels of operational efficiencies including improvements in
claims adjudication and continued automation and rationalization of operating
systems, (xi) performance and valuation of our investments, including the impact
of realized losses (including other-than-temporary impairment charges); (xii)
our ability to identify products and markets in which we can compete effectively
against competitors with greater market share, higher ratings, greater financial
resources and stronger brand recognition; (xiii) the ultimate outcome of
lawsuits filed against us and other legal and regulatory proceedings to which we
are subject; (xiv) our ability to complete the remediation of the material
weakness in internal controls over our actuarial reporting process and to
maintain effective controls over financial reporting; (xv) our ability to
continue to recruit and retain productive agents and distribution partners and
customer response to new products, distribution channels and marketing
initiatives; (xvi) our ability to achieve eventual upgrades of the financial
strength ratings of Conseco and our insurance company subsidiaries as well as
the impact of ratings downgrades on our business and our ability to access
capital; (xvii) the risk factors or uncertainties listed from time to time in
our filings with the Securities and Exchange Commission; (xviii) regulatory
changes or actions, including those relating to regulation of the financial
affairs of our insurance companies, such as the payment of dividends and surplus
debenture interest 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; and (xix) changes in the Federal income tax
laws and regulations which may affect or eliminate the relative tax advantages
of some of our products. 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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