New Data Questions Conseco's Integrity
Leigh Jones Journal Record Reporter, THE JOURNAL RECORD
New information tied to Conseco's hearing to acquire Duncan- based Universal Fidelity Life calls into question the integrity of the $33 billion insurance powerhouse, the Oklahoma Insurance Department argues.
Attorneys for the insurance department learned Wednesday that a Conseco subsidiary in Birmingham, Ala. -- Vulcan Life -- had its license suspended in October after Conseco moved to redomesticate the company to Carmel, Ind., where Conseco is based.
The insurance department is now contending that Conseco's integrity is at issue in its application to buy Universal Fidelity, a $38 million Medicare supplement and long-term health insurance provider. Prior to the information received this week, the insurance department's objections to Conseco's application were based on antitrust concerns and Conseco's alleged control of Universal Fidelity, though the application to buy the Duncan insurer had not been granted. "This argument is a third leg," said Orval Jones, general counsel for the Oklahoma Insurance Department. "This calls into question the integrity and competence of the people who control Conseco." Conseco's outside counsel, Curtis Dickinson, who also learned of the Vulcan Life suspension this week, said his client had not revealed the information to the insurance department prior to this week because of the death of Conseco's general counsel in March. "We're updating changes that happen on a regular basis," Dickinson said. Jones argues that Conseco had a duty to disclose the information to the insurance department in early November. Under Oklahoma law, the insurance commissioner can deny a Form A application if the acquiring party lacks integrity, competence or experience in the industry. The Vulcan Life matter, Dickinson asserts, has no bearing on Conseco's application to purchase Universal Fidelity. "The two are absolutely not related," Dickinson said. Vulcan Life's license was suspended after Alabama Insurance Department officials were unable to obtain company records related to the redomestication application. Conseco maintains the Alabama Insurance Department had an agreement with Vulcan Life allowing records to be removed from the premises. A hearing about the suspension is pending in Alabama. Dickinson says no change of operations has resulted from the suspension because Vulcan Life previously ceased writing any new policies. …