This past October, we reported that the long, sordid Penn Treaty saga was winding down, leaving behind it a trail of financial devastation:
"Penn Treaty and its affiliates are so broke that their unpaid obligations for Pennsylvania are expected to top $500 million"
Well, it looks like we're finally at the end of this particular journey:
"After eight years of legal struggle among state regulators, investors, and policyholders, Commonwealth Court Judge Hannah Leavitt signed off on a plan Wednesday to liquidate Penn Treaty"
That's nice, of course, but at what cost?
Well, it looks like that October estimate of some half a billion dollars was, um, a bit short:
"The decision leaves solvent insurers, their owners, and customers to pick up the cost for more than 70 percent of the up to $4.6 billion in projected long-term-care claims" [emphasis added]
That's $4.6 billion* (with a B), or just shy of 10 times what we thought it would be just a few months ago. About two-thirds of that will come from the state's Guaranty Fund (which money comes from all life and health insureds); the balance will be funded by an extra surcharge for other life and health insureds for the foreseeable future.
So the story may be over, but the impact will ripple on for years.
Oh, and exactly why did they go under? Wonder if it had something to do with this:
"Penn Treaty and its affiliates are so broke that their unpaid obligations for Pennsylvania are expected to top $500 million"
Well, it looks like we're finally at the end of this particular journey:
"After eight years of legal struggle among state regulators, investors, and policyholders, Commonwealth Court Judge Hannah Leavitt signed off on a plan Wednesday to liquidate Penn Treaty"
That's nice, of course, but at what cost?
Well, it looks like that October estimate of some half a billion dollars was, um, a bit short:
"The decision leaves solvent insurers, their owners, and customers to pick up the cost for more than 70 percent of the up to $4.6 billion in projected long-term-care claims" [emphasis added]
That's $4.6 billion* (with a B), or just shy of 10 times what we thought it would be just a few months ago. About two-thirds of that will come from the state's Guaranty Fund (which money comes from all life and health insureds); the balance will be funded by an extra surcharge for other life and health insureds for the foreseeable future.
So the story may be over, but the impact will ripple on for years.
Oh, and exactly why did they go under? Wonder if it had something to do with this:
[Hat Tip: Co-blogger Bob V]
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