Penn Treaty American Corp. announced that it has entered into a reinsurance agreement for new long-term care insurance policies with Bermuda-based Centre Solutions Limited.
“The Agreement, which is effective for all new long-term care insurance policies written after December 31, 2001, initially provides the Company with 50% quota share reinsurance on the first $100 million of newly issued long-term care annual insurance premium. The Agreement further provides Centre the option to reinsure a portion of the next $1 billion in newly issued long-term care annual insurance premium. If exercised, the option will allow Centre to reinsure future policies, subject to maximum quota share amounts of up to 40% as additional policies are written,” said the bulletin.
It noted that the Pennsylvania Insurance Department had approved the agreement, and said that it constitutes a “key component of its statutory capital management strategy as it escalates its sales efforts.”
William W. Hunt, President and C.O.O., stated, “The expansion of our existing reinsurance relationship provides us with the protection of a leading global reinsurer. As we begin to increase our sales, we anticipate that this Agreement will assist us in our statutory capital management and will further enable us to reestablish Penn Treaty as a sales leader in the long-term care insurance marketplace.”
Michael Crow, Centre VP, observed that, “We have worked closely with Penn Treaty in the past year and believe that this Agreement further supports our efforts to provide significant reinsurance support to the long- term care industry.”
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