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Archive for March 4th, 2009

I’m optimistic that Conseco will get an Unqualified Opinion in two weeks.  Here are some facts presented by Steve Stecher, President of Conseco Insurance Group.  march-3-communciation-regarding-press-release_cig-sales

Conseco’s issues are at a holding company level.  The underlying insurance companies remain well-capitalized.  This question should be answered by March 17th!

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Wellcare filed it’s unaudited financial statements for the first 9 months of 2008 and is delaying the issuance of the full year 2008 results.

Aside from it’s regulatory issues with CMS and the Florida Department of Insurance, it appears that May 13th, 2009 will be a key date for the company from a liquidity standpoint.  Similar to the case of Genworth, Wellcare’s liquidity concerns are at a “Parent Company” level, meaning, it is holding  an adequate amount of cash in it’s insurance and HMO subsidiaries, but that cash is restricted (for the protection of policyholders).  Insurance Subsidiaries are regulated by the state DOI in terms of how much cash can be paid up to the parent in the form of dividends or inter-company loans.  As of 12/31/08, Wellcare was able to upsteam enough cash to give the parent company $147.7 million in unregulated cash and $4.9 million in unregulated investments ($152.7 million, total, not including a $65 million dividend which was paid on 1/2/09).  As of 12/31/08, Wellcare owed $152.8 million on it’s Senior Secured Credit Facility which comes due on May 13th, 2009.

Assuming things go as planned for Wellcare, they will be able to pay off the Senior Secured Credit Facility when it comes due.  Given the difficult credit markets, they may have some difficulties accessing credit, if they require it.

From a profit and loss standpoint, Wellcare posted a net loss of ($5.7 million) for the 9 months ending 9/30/08 versus a net profit of $157 million for the 9 months ending 9/30/07.  They anticipate a small profit for the full year of 2008 in the $5-10 million range.  The swing was largely due to increases in their Medical Loss Ratio (MLR), lower investment yeilds and higher Administrative expense due to the various governmental agency investigations.  Wellcare projected lower income in 2009 due to higher MLR, higher Administrative expense ratio and lower investment yields.

Here is a link to their press release.

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There are a large number of articles on this, however, I think the New York Times/AP story gives a brief account of Gov. Sebelius’ political career as Insurance Commissioner and then Governor of Kansas and some of her key decisions.

The Department of Health and Human Services (HHS) oversees the Center for Medicare and Medicaid Services (CMS) as well as the Food and Drug (FDA), National Institutes for Health (NIH) and the Centers for Disease Control and Prevention (CDC).

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