Penn Treaty American Corporation Voluntarily Suspends New LTC Sales Pending Plan Consideration
PR NEWSWIRE - September 12, 2001 18:34
ALLENTOWN, Pa., Sep 12, 2001 /PRNewswire via COMTEX/ -- Penn Treaty American Corporation (NYSE: PTA) today announced that, due to continued consideration of its Corrective Action Plan ("the Plan") by the Pennsylvania Insurance Department, it has voluntarily suspended the sale of new long-term nursing facility and home health care insurance products in all states except New York. The Company's insurance subsidiaries will not accept new applications until December 15, 2001 unless they receive earlier regulatory approval. This action does not impact policies pending through September 10, 2001 or policy renewals.
The Company, which has supplemented its statutory capital in recent months, anticipated that consideration of the Plan for its subsidiary, Penn Treaty Network America Insurance Company, would be completed by September 1, 2001. However, because the Plan remains under consideration, the Company determined to temporarily suspend new sales of its profitable product line, which would normally yield early losses and reductions to capital under statutory accounting practices.
Irving Levit, PTA Chairman, President and C.E.O., stated, "While we recognize that this action is particularly difficult for applicants seeking coverage and for our loyal distribution force, we feel it is only prudent to cease new business sales until regulatory approvals of the Plan have been received. During this period, we will continue to provide the highest quality service to our existing policyholders, claimants and agency force. We hope to recommence new sales as soon as possible."
The Company believes that completion of the Plan is necessary to generate additional non-dilutive forms of statutory capital for its subsidiary operations, including reinsurance alternatives that have been evaluated during the past six months. PTA continues to evaluate other capital generation measures, which it also believes are closely dependent upon the Plan.
The Company's decision to cease new sales does not supersede agreements with or orders in certain states in which its subsidiaries are not currently writing business. However, PTA believes that, if the Plan is approved some of its existing agreements could be satisfied and withdrawn. The Company's latest action does not include its disability and Medicare supplement product lines, which are intended for sale to other companies. |
