PTNA and ANIC are placed under the statutory control of the Pennsylvania Insurance Department
Penn Treaty American, a provider of long-term care insurance in the U.S., has announced that two of its insurance subsidiaries, Penn Treaty Network America and American Network Insurance have entered rehabilitation under orders issued by the Pennsylvania Commonwealth Court.
According to the orders, Penn Treaty Network America (PTNA) and American Network Insurance (ANIC) are placed under the statutory control of the Pennsylvania Insurance Department.
The orders also grant the insurance commissioner direct authority to preserve the insurers’ assets and oversee their current financial situation and operations while continuing to pay policyholder claims. Both insurers remain under the ownership of Penn Treaty American.
As announced in October 2008, Penn Treaty American agreed that PTNA and ANIC would voluntarily enter rehabilitation if the company was unsuccessful in its efforts to enter into a transaction prior to January 1, 2009, that provided its insurance subsidiaries with adequate capitalisation.
The company announced in December 2008, that it had received a non-binding letter of intent for the sale of ANIC and substantially all of its long-term care insurance policies issued after January 1, 2002. The company is continuing the due diligence process for the proposed transaction but believes that proceeds realised from the transaction will be insufficient to fully capitalise PTNA’s immediate capital needs. As a result, the company agreed to the entrance of the orders as previously committed.