State Regulators Rush to Assure Policyholders on Conseco

The Insurance Departments of several Midwestern states have rushed to assure policyholders that Conseco’s long anticipated bankruptcy filing, announced yesterday, will have minimal impact on their investments.

The regulators explained that while the main holding company has filed for chapter 11 protection as part of a larger plan of reorganization, its insurance affiliates would remain largely unaffected.

Conseco is incorporated in Indiana, and the State’s Department of Insurance issued the following Notice:
On December 17, 2002, Conseco Inc, and two affiliates filed for permission to reorganize under Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court in Chicago. The filing does not affect Conseco Life Insurance Company, the only Indiana domestic insurer in Conseco’s group of 13 subsidiary insurance companies. The Conseco insurance companies are separate legal entities from the holding company that filed the bankruptcy petition. It is crucial that consumers understand that none of the Conseco insurance companies have filed, or will file, for bankruptcy.

The bulletin went on to describe the efforts the Department had made to work with the company, the fact that it continues to meet statutory requirements and the assurance that “Conseco Life and the other Conseco insurance companies will continue to operate normally, including paying claims as appropriate.”

It included with the admonition that “Before taking any action in regard to their policies, policyholders should be aware that the insurance company is not bankrupt.”

Regulators in Iowa and Missouri have issued similar statements. Most of Conseco’s insurance subsidiaries are organized and operate under the laws of the States of Texas and Illinois, and their respective Insurance Departments are expected to closely supervise any fundamental reorganization of the company’s insurance activities.

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