Humana sells long-term care insurance business

Humana Inc. announced it will sell stock of its subsidiary, KMB American Corporation, to Continental General Insurance Company.

CGIC is a Texas-based insurance firm wholly owned by HC2 Holdings Inc. It provides long-term care, life and annuity coverage to 93,000 members, while Humana’s LTC business serves 30,100 policyholders as Kanawha Insurance Co.

Humana expected to record a net loss of around $400 million. It will fund the transaction with about $203 million of parent company cash contributed into KMG.  HC2 Holdings said it planned to buy KMG with $150 million in statutory capital and surplus with about $2.3 billion of cash and invested assets.

The transaction is expected to close by the third quarter of 2018 subject to standard approvals.