Pennsylvania Insurance Commissioner Jennifer Altman filed an application with the state’s Commonwealth Court to have Senior Health Insurance of Pennsylvania placed in rehabilitation.
“SHIP's financial condition is dire,” states one of the comments in the application. Altman further noted her staff and consultants have spent some time working with SHIP’s management and trustees to obtain an accurate financial picture of SHIP’s affairs.
They have advised the commissioner that it may be possible to devise and implement a plan for SHIP’s rehabilitation that would produce the same or perhaps better outcome for policyholders than a liquidation would produce.
“SHIP's most recent annual statement demonstrates that the company is statutorily insolvent,” the introduction to the application states. “Additionally, SHIP's most recent risk-based capital report indicates that the company's total adjusted capital is substantially below its mandatory control level RBC, therefore triggering a ‘mandatory control level event.’”
The application also states SHIP’s directors and the Senior Health Care Oversight Trustees have consented to having the company placed in rehabilitation.
SHIP has been running off the long-term care insurance business of Conseco Senior Health Insurance since 2008. CSHI had been running off the business since 2003.
SHIP's financial condition has been worsening for several years. In March 2019, SHIP filed its 2018 financial statement with the Pennsylvania Insurance Department. The statement showed that SHIP's liabilities of $2.653 billion exceeded its assets of $2.206 billion by $447 million. The department at that time took no action to place the company in rehabilitation.
The insolvency grew to $462 million at the end of the first quarter of 2019, to $477 million at the end of the second quarter, and to $524 million at the end of the third quarter.