HealthMarkets Taps Former Humana Executive To Be Next CEO

HealthMarkets Inc. has named a new president and chief operating officer who will become the company's chief executive officer next year.

Kenneth J. Fasola will become HealthMarkets' president and CEO by June 2011. Phillip J. Hildebrand, the current CEO, will become chairman of the board of directors at that time.

Fasola, who has 25 years experience in the health insurance industry, previously worked at Humana Inc. (NYSE: HUM), where he was responsible for individual major medical, specialty and supplemental insurance operations, HealthMarkets said.

The Texas-based HealthMarkets, which focuses on the self-employed and individual health insurance markets, is the brand name for insurance plans underwritten and issued by its subsidiaries -- the Mega Life and Health Insurance Co., Chesapeake Life Insurance Co. and Mid-West National Life Insurance Company of Tennessee.

Attempts to get comment from the company weren't immediately successful.

Hildebrand, CEO since June 2008, and Fasola, will serve in similar roles at Insphere Insurance Solutions, a HealthMarkets' distribution unit that sells life, health, long-term care and retirement plans and services from several carriers to small businesses.

In September 2005, a group of private-equity firms led by the Blackstone Group agreed to acquire HealthMarkets, formerly known as UICI, in a transaction valued at $1.7 billion (BestWeek, Sept. 19, 2005).

In July 2008, HealthMarkets was to pay a $20 million fine as part of a settlement with state insurance regulators leading a multistate examination of its insurance subsidiaries (BestWire, July 22, 2008). The National Association of Insurance Commissioners earlier that year said a market conduct examination of the company found inadequate training and oversight of agents and insufficient disclosure of company relationships with associations and affiliates, among other problems (BestWire, Jan. 4, 2008).

Since HealthMarkets was acquired by the group of private equity firms, the organization sold the assets for most of its other insurance divisions, leaving the self-employed consumer health division as the primary revenue generator for the organization, A.M. Best Co. said in May 2009 (BestWire, May 28, 2009).

Mega Life and Health Insurance Co., Chesapeake Life Insurance Co. and Mid-West National Life Insurance Company of Tennessee each currently have Best's Financial Strength Ratings of B++ (Good).

(By Fran Matso Lysiak, senior associate editor, BestWeek: [email protected])