CNO to sell Conseco stock, Bankers Life regains traditional life block
March 12, 2014 by IFAwebnews Staff
CNO Financial Group Inc. announced it has entered into a definitive agreement to sell 100% of the common stock of Conseco Life Insurance Co., a wholly owned life insurance subsidiary consisting primarily of closed block interest-sensitive and traditional life insurance and annuities, to Wilton Reassurance Co.
The transaction, when completed, will reduce statutory run-off reserves by $3.4 billion, according to CNO.
As part of the agreement, Bankers Life and Casualty Co., a wholly owned life insurance subsidiary, will recapture approximately $160 million of traditional life reserves previously reinsured to Wilton Re, paying $28 million.
CNO also announced that its board of directors has approved an increase in the quarterly dividend to $0.06 per share on the company’s common shares, representing a 100% increase. The dividend will be payable March 24, 2014, to shareholders of record at the close of business on March 14, 2014.
“The disposition of these low returning and historically volatile closed-blocks of business marks another significant milestone for the company,” said Ed Bonach, CEO. “The divestiture of CLIC and the recently announced LTC reinsurance transaction enable us to shed the legacy of the past and devote our attention to our core business segments and meeting the needs of the fast growing and under-served middle-income market. These transactions will unlock stranded capital, be accretive to ROE, reduce the risk profile of the company and further support the decision to double our common stock dividend.”
The sale of Conseco is subject to customary closing conditions and certain regulatory approvals, and is expected to close mid-year 2014.