Investment News reported this week that the Pennsylvania Insurance Department has seized control of two subsidiaries of long-term care insurer Penn Treaty American Corp. because of their failure to maintain appropriate capital levels. http://www.investmentnews.com/apps/pbcs.dll/article?AID=/20090107/REG/901079993.
According to Commissioner Joel Ario, the department hopes to “rehabilitate” Penn Treaty Network and American Network Insurance Company and place them back in the private section. Although the companies are insolvent, says Ario, the state will continue to pay claims. If the insurer cannot be rehabilitated, it will be liquidated and the state will then guarantee each policy up to $300,000.
What this means for California policyholders is still unclear, but individuals with potential claims against the company should act now. The outcome will likely be far from positive. 1/7/09