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Conseco reserve costs to wipe out fourth-quarter profit

February 23, 2007

Conseco Inc. expects to spend $53 million after taxes to shore up capital reserves for its long- term care and core insurance businesses, the company announced today.

The Carmel-based insurer said the expense likely will wipe out its fourth-quarter profit, which Conseco now will announce on March 6, a week later than originally planned. During its fourth quarter last year, the company recorded profit of $77.1 million, or 42 cents per share.

This year, analysts had forecast fourth-quarter profit of 36 cents per share, according to Thomson Financial. The long-term care block of policies, which Conseco services but no longer sells, have seen a much higher frequency of claims in recent quarters, leading to lower profits.

Conseco also said today that its executives determined the company needs an “extended” review of its claims reserves and internal controls over financial reporting.

The long-term care block of policies, which Conseco services but no longer sells, have seen a much higher frequency of claims in recent quarters, leading to lower profits.

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