Conseco expects a $20m increase in its deferred tax valuation allowance in Q3
Conseco has received the regulatory approvals for the transaction under which two insurance companies in its Insurance Group are coinsuring approximately 104,000 non-core life insurance policies with Wilton Reassurance, a Minnesota reinsurance company.
In this transaction, Wilton Re is paying a ceding commission of approximately $57.5m, 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 $409m in cash and policy loans and approximately $466m of statutory policy and other reserves, said the company.
Jim Prieur, CEO of Conseco, said: This transaction improves Conseco’s consolidated risk-based capital ratio and increases statutory capital. In addition, it further simplifies our administrative operations as we focus on our core insurance businesses.
As a result of the transaction, Conseco expects to increase its deferred tax valuation allowance of approximately $20m in the third quarter of 2009. Conseco also expects to record a deferred gain of approximately $23m.
Approximately, 70% of the policies being coinsured are from Washington National Insurance Company and the remainder are from Conseco Insurance Company.