Assurant To Exit Health Insurance Market - Quick Facts

(RTTNews) - Assurant Inc. (AIZ) said that it will exit the health insurance market as the Company sharpens its focus on housing and lifestyle specialty protection offerings.

Assurant will immediately begin to wind down its major medical operations and has reached an agreement in principle to sell certain business lines and assets to National General Holdings Corp., subject to final documentation and regulatory approval. The Company expects to substantially complete its exit of the health insurance market by the end of 2016.

National General Holdings Corp. (NGHC) will acquire Assurant Health's supplemental and small group self-funded product lines and certain other assets including a proprietary small group sales channel. Assurant Health will continue sales of its supplemental and small group self-funded products as it finalizes the terms of the transaction with National General Holdings Corp.

At the same time, as part of the wind-down process, Assurant Health will cease sales of its individual major medical, small group fully-insured and short-term medical health insurance policies on June 15, 2015 and will not participate in open enrollment under the Affordable Care Act for 2016.

The Company will meet all claims, benefits, provider payments and agent commission responsibilities during these transitions. There will be no changes to Assurant Health policies or benefits currently in effect. Affected customers will receive letters from Assurant Health beginning the week of June 15, 2015.

Assurant is committed to treating all employees fairly and with respect as the Company exits the health insurance market during the next 18 months. Affected employees will be considered for open positions within Assurant, based on qualifications. Those unable to find another position will be offered severance, outplacement and job readiness support. The first phase of job reductions will occur this summer and affect an estimated 300 out of approximately 1,700 positions at Assurant Health.

The Company estimates that total costs associated with its exit from the health insurance market will amount to $175 million to $250 million. These charges primarily include premium deficiency reserves, severance and retention, contract and lease terminations, and other transaction costs. The Company estimates the total future incremental cash expenditures related to these costs will be $95 million to $110 million.

As part of its focus on housing and lifestyle specialty protection products and services, Assurant continues to pursue a sale of its employee benefits segment to a buyer with a more focused benefits portfolio. The process is underway and is expected to conclude in the next several months. Serving more than 30,000 small and mid-sized employers, Assurant Employee Benefits provides a robust product suite of voluntary and employer-paid products including dental, long-term and short-term disability and life insurance.