Penn Treaty American Corporation Continues Capital Formation Plan

Apr 17, 2001, 01:00 ET from Penn Treaty American Corporation

    ALLENTOWN, Pa., April 17 /PRNewswire/ -- Penn Treaty American Corporation
 (NYSE:   PTA) today announced progress in its plan to generate additional
 statutory capital for its insurance subsidiary operations and to improve
 liquidity.
     PTA has signed a letter of intent with Universal American Financial Corp.
 to sell its New York subsidiary, American Independent Network Insurance
 Company of New York, and certain of its non-core product lines, including
 Life, Medicare Supplement and Disability coverages.  The block purchase,
 estimated at $13 million, remains subject to customary due diligence,
 execution of definitive agreements and regulatory approvals.
     PTA intends to utilize the proceeds of the sale to provide parent
 liquidity and to supplement the statutory surplus of its insurance
 subsidiaries, Penn Treaty Network America and American Network Insurance
 Companies.
     In addition, PTA intends to limit statutory strain arising from the
 issuance of new business by temporarily suspending the marketing of new
 policies in Florida and Virginia due to higher surplus requirements in those
 states.  PTA has agreed to voluntary consents in both states to restrict the
 issuance of new business until additional capital is generated.  Upon the
 generation of sufficient statutory surplus and approval under Florida and
 Virginia statutes, PTA intends to petition for withdrawal of its voluntary
 consents and resume sales activity.
     PTA has previously disclosed its intention to undertake a rights offering
 in order to generate approximately $40 million in additional capital and
 surplus to support its insurance operations.  PTA believes that the Universal
 American transaction, if consummated, and the voluntary new business
 limitations will improve the Company's capital ratios and resources.  The
 announced action plans are expected to reduce the necessary proceeds of the
 rights offering.
     PTA, in conjunction with its financial advisors, Merrill Lynch & Co. and
 Advest, Inc., is continuing to evaluate all strategic and financial
 alternatives.
 
     PTA, through its wholly owned direct and indirect subsidiaries, Penn
 Treaty Network America Insurance Company, American Network Insurance Company,
 American Independent Network Insurance Company of New York, Penn Treaty
 (Bermuda), Ltd., United Insurance Group Agency, Inc., Network Insurance Senior
 Health Division and Senior Financial Consultants Company, is primarily engaged
 in the underwriting, marketing and sale of individual and group accident and
 health insurance products, principally covering long term nursing home and
 home health care.  PTA is licensed to conduct business in 50 states and the
 District of Columbia.
     Certain statements made by the Company, in this press release, may be
 considered forward-looking within the meaning of the Private Securities
 Litigation Reform Act of 1995.  Although the Company believes that its
 expectations are based upon reasonable assumptions within the bounds of its
 knowledge of its business and operations, there can be no assurance that
 actual results of the Company's operations will not differ materially from its
 expectations.  Factors which could cause actual results to differ from
 expectations include, among others, the Company's ability to raise adequate
 capital to meet the requirements of current business and anticipated growth,
 the adequacy of the Company's loss reserves, the Company's ability to qualify
 new insurance products for sale in certain states and to succeed in obtaining
 necessary rate increases, the Company's ability to comply with government
 regulations and the requirements which may be imposed by state regulators as a
 result of the Company's surplus levels, the ability of senior citizens to
 purchase the Company's products in light of the increasing costs of health
 care, the modality of premium revenue, the ability of the Company to defend
 itself from adverse litigation, and the Company's ability to expand its
 network of productive independent agents.  For additional information, please
 refer to the Company's reports filed with the Securities and Exchange
 Commission.
 
 

SOURCE Penn Treaty American Corporation
    ALLENTOWN, Pa., April 17 /PRNewswire/ -- Penn Treaty American Corporation
 (NYSE:   PTA) today announced progress in its plan to generate additional
 statutory capital for its insurance subsidiary operations and to improve
 liquidity.
     PTA has signed a letter of intent with Universal American Financial Corp.
 to sell its New York subsidiary, American Independent Network Insurance
 Company of New York, and certain of its non-core product lines, including
 Life, Medicare Supplement and Disability coverages.  The block purchase,
 estimated at $13 million, remains subject to customary due diligence,
 execution of definitive agreements and regulatory approvals.
     PTA intends to utilize the proceeds of the sale to provide parent
 liquidity and to supplement the statutory surplus of its insurance
 subsidiaries, Penn Treaty Network America and American Network Insurance
 Companies.
     In addition, PTA intends to limit statutory strain arising from the
 issuance of new business by temporarily suspending the marketing of new
 policies in Florida and Virginia due to higher surplus requirements in those
 states.  PTA has agreed to voluntary consents in both states to restrict the
 issuance of new business until additional capital is generated.  Upon the
 generation of sufficient statutory surplus and approval under Florida and
 Virginia statutes, PTA intends to petition for withdrawal of its voluntary
 consents and resume sales activity.
     PTA has previously disclosed its intention to undertake a rights offering
 in order to generate approximately $40 million in additional capital and
 surplus to support its insurance operations.  PTA believes that the Universal
 American transaction, if consummated, and the voluntary new business
 limitations will improve the Company's capital ratios and resources.  The
 announced action plans are expected to reduce the necessary proceeds of the
 rights offering.
     PTA, in conjunction with its financial advisors, Merrill Lynch & Co. and
 Advest, Inc., is continuing to evaluate all strategic and financial
 alternatives.
 
     PTA, through its wholly owned direct and indirect subsidiaries, Penn
 Treaty Network America Insurance Company, American Network Insurance Company,
 American Independent Network Insurance Company of New York, Penn Treaty
 (Bermuda), Ltd., United Insurance Group Agency, Inc., Network Insurance Senior
 Health Division and Senior Financial Consultants Company, is primarily engaged
 in the underwriting, marketing and sale of individual and group accident and
 health insurance products, principally covering long term nursing home and
 home health care.  PTA is licensed to conduct business in 50 states and the
 District of Columbia.
     Certain statements made by the Company, in this press release, may be
 considered forward-looking within the meaning of the Private Securities
 Litigation Reform Act of 1995.  Although the Company believes that its
 expectations are based upon reasonable assumptions within the bounds of its
 knowledge of its business and operations, there can be no assurance that
 actual results of the Company's operations will not differ materially from its
 expectations.  Factors which could cause actual results to differ from
 expectations include, among others, the Company's ability to raise adequate
 capital to meet the requirements of current business and anticipated growth,
 the adequacy of the Company's loss reserves, the Company's ability to qualify
 new insurance products for sale in certain states and to succeed in obtaining
 necessary rate increases, the Company's ability to comply with government
 regulations and the requirements which may be imposed by state regulators as a
 result of the Company's surplus levels, the ability of senior citizens to
 purchase the Company's products in light of the increasing costs of health
 care, the modality of premium revenue, the ability of the Company to defend
 itself from adverse litigation, and the Company's ability to expand its
 network of productive independent agents.  For additional information, please
 refer to the Company's reports filed with the Securities and Exchange
 Commission.
 
 SOURCE  Penn Treaty American Corporation