Pa. Department Approves Launch of Trust

The Pennsylvania Insurance Department has approved the separation, effective today, of Senior Health Insurance Company of Pennsylvania (formerly Conseco Senior Health Insurance Company) from Conseco Inc. As a result of the transaction, the long-term care business of SHIP will be managed by SHIP, subject to the oversight of the Senior Health Care Oversight Trust and, for certain matters, the Department.

The Oversight Trust is to be governed by an independent Board of Trustees composed of former insurance regulators and financial experts. The Trust will also have as a member the former Surgeon General of the United States, Dr. C. Everett Koop, who is an authority on health care issues affecting seniors. The Trust will manage SHIP as a non-profit organization the sole purpose of which is to satisfy the obligations of the insurance coverages underwritten by SHIP. The Trust and SHIP will be subject to oversight from the Department.

In addition to Dr. Koop, the Board of Trustees consists of:

• Julianne Bowler, lead trustee and former commissioner, Massachusetts Department of Insurance
• Gregory Serio, former superintendent of Insurance, State of New York
• Cecil Bykerk, former chief actuary, Mutual of Omaha and President, Society of Actuaries
• John Wells, president and CEO of SHIP

Management transferred from Conseco to SHIP includes John Wells, who will serve as the president and CEO of SHIP, and his senior management team for operations and finance.

On Aug. 11, 2008, Conseco Inc. announced its intention for an independent trust to be formed to own and operate CSHI. Under the terms of the completed transaction, all of the stock of CSHI has been transferred to the Trust, including its $121 million of total adjusted capital as of Sept. 30, 2008, to which an additional $175 million has been received from Conseco.