Penn Treaty seals Imagine finite terms

US long-term care (LTC) insurance group Penn Treaty has confirmed the details of its new reinsurance agreement with offshore reinsurance group Imagine Re. The reinsurance provides 75% quota share protection for new LTC policies issued by the insurer’s subsidiaries, Penn Treaty Network America and American Network Insurance Cos, with effect from October 1, 2005. Penn Treaty can recapture the business on any September 30 following at least three years of reinsurance cover. Imagine will maintain an experience account in the event of future recapture, while Penn Treaty will pay the reinsurer an annual expense and risk charge based on the level of reinsured premium, ceded reserves and statutory surplus credit provided.