The settlement calls for two Conseco subsidiaries – Conseco Services, LLC and Conseco Equity Sales, Inc – to pay a total of $5 million, and for the SEC and the Attorney General to file a claim for an additional $10 million against the bankruptcy estate of a subsidiary of the predecessor company. The two subsidiaries did not admit or deny the alleged findings of the investigation.
Conseco’spredecessor sold its variable annuity subsidiary to an unrelated third party before filing for bankruptcy in December 2002, and no Conseco affiliates have sold any new variable annuity policies since the divestiture. Conseco executives were told in January the company might be charged with improper trading of its variable annuities business, the company said in a regulatory filing (See Regulators Readying Conseco VA Action ).
The firmemerged from bankruptcy in September 2003.
Because Conseco had previously established a reserve for potential liabilities in this matter, the settlement is expected to have no impact on the earnings guidance Conseco provided in its second quarter 2004 earnings release last week, the company said in a news release.