Conseco said that it has received the necessary regulatory approvals and completed the transaction under which its Bankers Life and Casualty Company subsidiary coinsured, with an effective date of October 1, 2009, about 234,000 life insurance policies with Wilton Reassurance Company.

At closing, Wilton Re has paid Bankers Life a ceding commission of approximately $44m and 50% coinsured these policies, which Bankers Life will continue to service and administer. As part of the transaction, Bankers Life has transferred to Wilton Re approximately $73m in investment securities and policy loans and $117m of statutory policy and other liabilities.

Aafter the transaction, Conseco expects to record an increase to its deferred tax valuation allowance of approximately $18m in the fourth quarter of 2009. It also expects to record a pre-tax deferred cost of reinsurance of approximately $30m, which will be amortised over the life of the underlying policies, reducing quarterly pre-tax income from operations by approximately $0.5m.

Jim Prieur, CEO of Conseco, said: This transaction is expected to increase Conseco’s consolidated risk-based capital ratio by 9 percentage points, along with increasing statutory capital by the amount of the ceding commission.”