NU Online News Service, Aug. 14, 10:35 a.m. – Penn Treaty American Corp., Allentown, Pa., is reporting $2.4 million in net income for the second quarter on $101 million in revenue, compared with $4.8 million in net income on $94 million in revenue for the second quarter of 2000.
The company, which sells long-term care insurance and other insurance products, faced close scrutiny from state regulators during the quarter as a result of concerns about its ability to meet obligations to LTC policyholders. The company stopped selling new LTC insurance policies in several large states.
Premiums from the sale of new LTC policies fell 50%, to $12 million. Penn Treaty also had to add $6 million to claim reserves because of an unexpected increase in the claims rate.
Penn Treaty "continues to work closely with state insurance regulators to affirm its reserving and surplus levels," the company says.
But revenue from renewals of existing LTC policies increased 25%, helping Penn Treaty record a 4% increase in overall revenue.
