On December 17, 2002, Conseco, Inc., (Conseco) along with several subsidiaries, including CIHC, Inc. and Conseco Finance Corp., filed for permission to reorganize under Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court in Chicago.
Conseco, Inc. is a publicly traded holding company headquartered in Carmel, Indiana. Conseco, Inc. is not an insurance company. Conseco, Inc. is engaged in insurance and consumer finance operations through a number of subsidiary companies. As a holding company, Conseco, Inc. is a separate legal entity that is distinct and apart from its subsidiary insurance companies.
The Texas Department of Insurance (TDI) has been closely monitoring the Conseco situation for many months in coordination with insurance regulators from other states. Conseco, Inc. had previously announced that it had engaged the services of financial and legal advisors to help restructure its debt at the holding company level, and that a bankruptcy filing was possible.
Conseco, Inc., owns thirteen subsidiary insurance companies that write life insurance, health insurance and annuities. These insurers are domiciled in Texas, Illinois, Pennsylvania, Indiana, Arizona and New York. A Texas insurance company, Conseco Life Insurance Company of Texas, is the parent of all of the other insurance subsidiaries, except for Bankers National Life Insurance Company, which is also a Texas domiciled insurer. A listing of all the insurance companies and their states of domicile is included below.
Conseco, Inc.’s subsidiary insurers are governed by state laws that are designed to protect the interests of the policyholders. Insurance companies are not eligible to file for bankruptcy under the federal bankruptcy code.
Conseco, Inc.'s bankruptcy filing does not relate to the obligations of its insurance subsidiaries, which continue to operate under their own management. The Conseco subsidiary insurance companies have adequate capital, reserves and liquidity to meet their obligations to policyholders at this time.
TDI has been working very closely with insurance regulators from all other states, with particular emphasis on coordination with the states where Conseco’s insurance companies are domiciled. State regulators are charged with and committed to the protection of the policyholders and claimants of the Conseco insurance companies.
Additionally, TDI has been working closely with Conseco management to monitor the Conseco situation and the financial condition of the insurance subsidiaries. In October, 2002, TDI obtained commitments from Conseco that are designed to ensure that the insurance companies will be protected during and after any restructuring, including a bankruptcy filing. Conseco management memorialized this through formal agreements with TDI to maintain the financial health of the insurance subsidiaries and to provide quality customer service to policyholders. Under the agreements as well as state law, Conseco’s insurance subsidiaries must maintain sufficient capitalization and reserves and may not pay dividends or make any disbursements outside the ordinary course of business without TDI’s regulatory approval. Conseco must also maintain an infrastructure that allows normal operations of its insurance subsidiaries to continue.
TDI has worked with similarly troubled holding companies in the past, and while each situation is unique, the primary focus of TDI has always been and remains the protection of the insurance company policyholders and claimants.
Questions and Answers
Q: What did Conseco announce?
A: On December 17, 2002, Conseco, Inc. (Conseco), along with several subsidiaries, including CIHC, Inc. and Conseco Finance Corp., filed for permission to reorganize under Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court in Chicago.
Q: Who is Conseco, Inc.?
A: Conseco, Inc. is a publicly traded holding company headquartered in Carmel, Indiana. Conseco, Inc. is not an insurance company. Conseco is engaged in insurance and consumer finance operations through a number of subsidiary companies.
As a holding company, Conseco, Inc. is a separate legal entity that is distinct and apart from its subsidiary insurance companies.
Conseco, Inc., owns thirteen subsidiary insurance companies that write life insurance, health insurance and annuities. These insurers are domiciled in Texas, Illinois, Pennsylvania, Indiana, Arizona and New York. A Texas insurance company, Conseco Life Insurance Company of Texas, is the parent of all of the other insurance subsidiaries, except for Bankers National Life Insurance Company, which is also a Texas domiciled insurer. (see listing of companies and states of domicile at the end of the Q & A).
Q: Are the Conseco insurance subsidiaries in bankruptcy? Will the assets of the insurers be tied up in the bankruptcy proceeding?
A: In short, "no".
Conseco, Inc.'s subsidiary insurers are governed by state laws that are designed to protect the interests of the policyholders. Insurance companies are not eligible to file for bankruptcy under the federal bankruptcy code.
Conseco, Inc.'s bankruptcy filing does not relate to the obligations of its insurance subsidiaries, which continue to operate under their own management. The Conseco subsidiary insurance companies have adequate capital, reserves and liquidity to meet their obligations to policyholders at this time.
Insurance Companies and States of Domicile
Bankers National Insurance Company (TX)
Conseco Life Insurance Company of Texas (TX)
Bankers Life Insurance Company of Illinois (IL)
Bankers Life and Casualty Insurance Company (IL)
Conseco Annuity Assurance Company (IL)
Colonial Penn Life Insurance Company (formerly Conseco Direct Life Insurance Company) (PA)
Conseco Health Insurance Company (AZ)
Conseco Senior Health Insurance Company (PA)
Conseco Life Insurance Company of New York (NY)
Pioneer Life Insurance Company (IL)
Conseco Medical Insurance Company (IL)
Washington National Insurance Company (IL)
Conseco Life Insurance Company (IN)