CNO Financial Group’s plan to consolidate three of its insurance companies has received regulatory approvals, according to the Carmel, Ind.-based company.
Jim Prieur
The consolidation plan calls for the merging of two CNO insurance subsidiaries, Conseco Insurance Co. and Conseco Health Insurance Co., to become part of Washington National Insurance Co. Regulators in Indiana, Illinois, Arizona and California approved the plan, which included the redomestication of WNIC from Illinois to Indiana.
“Although the re-domestication and merger process has taken longer than initially anticipated, as we indicated when we first announced the plans, we do expect this merger to provide many benefits, including an increase to CNO’s total adjusted statutory capital,” said CEO Jim Prieur of CNO Financial in a statement.
Nearly half of the Conseco Insurance Group’s inforce business and all new sales activity is going to now go through one company.
WNIC now has about $5 billion of statutory assets, 925,000 policies in force, $575 million of annual premiums, and $4.3 billion of statutory policy reserves, comprised of specified disease and other supplemental health policies (60%), annuities and other deposits (31%), and life insurance policies (9%), according to the company.
CNO’s chief financial officer, Ed Bonach, said the merger will “increase to our consolidated risk-based capital ratio.,” noting that if the merger had been completed June 30, CNO’s consolidated risk-based capital ratio would have been increased by 9 percentage points.
Company officials said they anticipate another $2 million in annual savings from eliminating the costs to administer and file financial reports and related audits and examinations on two statutory companies and by reducing overall premium tax payments. Offsetting these savings will be about $5 million of one-time expenses over the next 12 months, including costs to update and restock forms, update IT systems, modify agent appointments, and complete other changes arising from the merger, according to the company. Officials added that the re-domestication and merger will have no other impact on CNO’s earnings or financial statements under generally accepted accounting principles.
CNO is a holding company with insurance subsidiaries, principally Bankers Life and Casualty Co., Colonial Penn Life Insurance Co. and Washington National Insurance Co., which focus on retirement planning for seniors and others.
CNO Financial Group’s consolidation plan is approved via IFAwebnews.com .
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