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Statement of Insurance Commissioner Tom Gallagher Re: Conseco Bankruptcy

12/18/2002

TALLAHASSEE - Conseco, Inc. filed for Chapter 11 bankruptcy reorganization in U.S. Bankruptcy Court in Chicago late yesterday. Conseco, Inc. is a publicly traded holding company and is not an insurance company. The Florida Department of Insurance has been closely monitoring the finances of Conseco's affiliate insurance companies and will continue to do so following the holding company's attempt at reorganization.


As a holding company, Conseco, Inc. is a separate legal entity that is distinct and apart from its subsidiary insurers. The company's announcement to file for bankruptcy does not include its subsidiary insurance companies nor does it impact the policyholder obligations of its subsidiary insurance companies.
Unlike most other corporations, insurance companies are not eligible to file for bankruptcy. Instead, they are governed by state laws that are designed, first and foremost, to protect policyholders.

Moreover, regardless of a holding company's financial condition, insurance companies must always meet capital, surplus and reserve requirements to ensure they meet their obligations to policyholders. In addition, insurance companies are not allowed to pay dividends to the parent company or make disbursements to affiliate companies outside the normal course of business without approval of regulators in the state where the insurance company is domiciled.

At the present time, the Department is satisfied with the Conseco insurance companies' financial ability to continue normal operations.
Conseco writes life and health insurance and annuities through subsidiary insurance companies domiciled in Texas, Illinois, Pennsylvania, Indiana, Arizona and New York. Attached is a list of the eleven Conseco insurance companies that are authorized to write business in Florida.

Bankers Life and Casualty Company
Bankers National Life Insurance Company (Suspended)
Conseco Annuity Insurance Company
Conseco Direct Life Insurance Company
Conseco Health Insurance Company
Conseco Life Insurance Company
Conseco Medical Insurance Company
Conseco Senior Health Insurance Company
Conseco Variable Insurance Company
Pioneer Life Insurance Company
Washington National Insurance Company

Of the total premium written by these eleven companies, Florida represents 8.7 percent