Insurer stops writing policies

0 Comments | Philadelphia Inquirer, The, October, 2008 | by Linda Loyd Inquirer Staff Writer

Penn Treaty American Corp., an Allentown long-term-care insurance company, said yesterday that its primary insurance subsidiary will be considered insolvent unless it can raise at least $100 million by Jan. 1. The insurer said it would stop issuing new policies, and will consider "strategic alternatives." The company will accept letters of interest from prospective investors and purchasers through mid-October and decide on a course by the end of the year.

The company needs $100 million to $120 million to cover reinsurance agreements it intentionally dropped "because the cost to keep them was more than the value of the agreements," Cameron Waite, executive vice president of strategic operations, said in an interview. If a cash infusion is not found, Penn Treaty said it...