Conseco Completes Reinsurance Transaction

CARMEL, Ind., Jan. 26 /PRNewswire-FirstCall/ — Conseco, Inc. (NYSE: CNO) said
today that it received the necessary regulatory approvals and completed the
previously announced transaction under which its Bankers Life and Casualty
Company subsidiary (“Bankers Life”) coinsured, with an effective date of October
1, 2009, about 234,000 life insurance policies with Wilton Reassurance Company
(“Wilton Re”). At closing, Wilton Re paid Bankers Life a ceding commission of
approximately $44 million and 50% coinsured these policies, which Bankers Life
will continue to service and administer.

“This transaction is expected to increase Conseco’s consolidated risk-based
capital ratio by 9 percentage points, along with increasing statutory capital by
the amount of the ceding commission,” said Conseco CEO Jim Prieur.

As part of the transaction, Bankers Life transferred to Wilton Re approximately
$73 million in investment securities and policy loans and $117 million of
statutory policy and other liabilities.

As previously announced, Conseco expects to record (as a result of the
transaction) an increase to its deferred tax valuation allowance of
approximately $18 million in the fourth quarter of 2009. Conseco also expects to
record a pre-tax deferred cost of reinsurance of approximately $30 million,
which, in accordance with generally accepted accounting principles (“GAAP”),
will be amortized over the life of the underlying policies, reducing quarterly
pre-tax income from operations by approximately $0.5 million. In addition,
Conseco’s future GAAP income from operations will be reduced by the earnings
from the portion of the block that is coinsured; such pre-tax earnings before
overhead were approximately $2 million in the third quarter of 2009.

About Conseco

Conseco, Inc.’s insurance companies help protect working American families and
seniors from financial adversity: Medicare supplement, long-term care, cancer,
critical illness and accident policies protect people against major unplanned
expenses; annuities and life insurance products help people plan for their
financial futures. For more information, visit Conseco’s website at
www.conseco.com.

Cautionary Statement Regarding Forward-Looking Statements.Our statements, trend
analyses and other information contained in this press release relative to
markets for Conseco’s products and trends in Conseco’s operations or financial
results, as well as other statements, contain forward-looking statements within
the meaning of the federal securities laws and the Private Securities Litigation
Reform Act of 1995. Forward-looking statements typically are identified by the
use of terms such as “anticipate,” “believe,” “plan,” “estimate,” “expect,”
“project,” “intend,” “may,” “will,” “would,” “contemplate,” “possible,”
“attempt,” “seek,” “should,” “could,” “goal,” “target,” “on track,” “comfortable
with,” “optimistic” and similar words, although some forward-looking statements
are expressed differently. You should consider statements that contain these
words carefully because they describe our expectations, plans, strategies and
goals and our beliefs concerning future business conditions, our results of
operations, financial position, and our business outlook or they state other
”forward-looking” information based on currently available information.
Assumptions and other important factors that could cause our actual results to
differ materially from those anticipated in our forward-looking statements
include, among other things: (i) our ability to continue to satisfy the
financial ratio and balance requirements and other covenants of our debt
agreements; (ii) general economic, market and political conditions, including
the performance and fluctuations of the financial markets which may affect our
ability to raise capital or refinance existing indebtedness and the cost of
doing so; (iii) our ability to generate sufficient liquidity to meet our debt
service obligations and other cash needs; (iv) our ability to obtain adequate
and timely rate increases on our supplemental health products, including our
long-term care business; (v) the receipt of any required regulatory approvals
for dividend and surplus debenture interest payments from our insurance
subsidiaries; (vi) mortality, morbidity, the increased cost and usage of health
care services, persistency, the adequacy of our previous reserve estimates and
other factors which may affect the profitability of our insurance products;
(vii) changes in our assumptions related to the cost of policies produced or the
value of policies in force at the effective date; (viii) the recoverability of
our deferred tax assets and the effect of potential ownership changes and tax
rate changes on its value; (ix) our assumption that the positions we take on our
tax return filings, including our position that our 7.0% convertible senior
debentures due 2016 will not be treated as stock for purposes of Section 382 of
the Internal Revenue Code of 1986, as amended, and will not trigger an ownership
change, will not be successfully challenged by the Internal Revenue Service; (x)
changes in accounting principles and the interpretation thereof; (xi) our
ability to achieve anticipated expense reductions and levels of operational
efficiencies including improvements in claims adjudication and continued
automation and rationalization of operating systems, (xii) performance and
valuation of our investments, including the impact of realized losses (including
other-than-temporary impairment charges); (xiii) our ability to identify
products and markets in which we can compete effectively against competitors
with greater market share, higher ratings, greater financial resources and
stronger brand recognition; (xiv) the ultimate outcome of lawsuits filed against
us and other legal and regulatory proceedings to which we are subject; (xv) our
ability to complete the remediation of the material weakness in internal
controls over our actuarial reporting process and to maintain effective controls
over financial reporting; (xvi) our ability to continue to recruit and retain
productive agents and distribution partners and customer response to new
products, distribution channels and marketing initiatives; (xvii) our ability to
achieve eventual upgrades of the financial strength ratings of Conseco and our
insurance company subsidiaries as well as the impact of rating downgrades on our
business and our ability to access capital; (xviii) the risk factors or
uncertainties listed from time to time in our filings with the Securities and
Exchange Commission; (xix) regulatory changes or actions, including those
relating to regulation of the financial affairs of our insurance companies, such
as the payment of dividends and surplus debenture interest to us, regulation of
financial services affecting (among other things) bank sales and underwriting of
insurance products, regulation of the sale, underwriting and pricing of
products, and health care regulation affecting health insurance products; and
(xx) changes in the Federal income tax laws and regulations which may affect or
eliminate the relative tax advantages of some of our products. Other factors and
assumptions not identified above are also relevant to the forward-looking
statements, and if they prove incorrect, could also cause actual results to
differ materially from those projected. All forward-looking statements are
expressly qualified in their entirety by the foregoing cautionary statements.
Our forward-looking statements speak only as of the date made. We assume no
obligation to update or to publicly announce the results of any revisions to any
of the forward-looking statements to reflect actual results, future events or
developments, changes in assumptions or changes in other factors affecting the
forward-looking statements.

SOURCE Conseco, Inc.

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Company Codes: NYSE:CNO