The PA Dept of Ins. is facing a very difficult situation with a different insurer that might go into conservatorship next month. I think the PA DOI’s conclusion regarding the Conseco policies, is that a well-managed trust now is better than trying to mop up a big mess through conservatorship later.

At least by putting the policies into a trust, the PA Ins. Commissioner can cut administrative costs and eliminate waste, including executive compensation. The roughly two hundred million dollars of annual premiums paid by the policyholders can go towards current and future claims.

Insurance companies don’t have the authority to “transfer policies into a trust”. It was the PA DOI that had the authority to do this. They did it for the benefit of all the policyholders because Conseco Senior Health was on the road to insolvency.

As with any insurance purchase, it’s very important to check the financial ratings of the LTC insurers you are considering.