PacifiCare buys unit from another insurer

Tuesday, Nov. 30, 2004 | 11:27 a.m.

Two insurers that do business in Nevada have announced plans to consolidate some of their operations.

Cypress, Calif.-based PacifiCare Health Systems Inc. announced Monday it plans to purchase Pacific Life Insurance Co.'s group health insurance business, which includes medical, dental and life insurance coverage for small and large employers in 30 states.

PacifiCare insures 39,000 Nevadans on its commercial plans and about 25,500 Nevadans on its Medicare Advantage plans, which provide additional benefits beyond traditional fee-for-service Medicare. Pacific Life insures about 17,000 Nevadans in its group health plans.

Under the deal, PacifiCare will assume future claims liability in exchange for Newport Beach, Calif.-based Pacific Life's premium revenue. PacifiCare will also acquire renewal rights for the insureds enrolled in group health plans and the assets associated with those plans. PacifiCare said it has the right to hire about 700 Pacific Life employees who service the group insurance business. The financial terms of the deal were not disclosed.

The deal is scheduled to close early next year after California regulators review it.

Pacific Life will continue to offer life insurance, individual annuities and other investment and retirement products.

This is the second acquistion announcement PacifiCare has made in the last few months. In September, PacifiCare announced plans to purchase Green Bay, Wis.-based American Medical Security Group Inc. for $502 million.

That deal is awaiting regulatory approval in a few states and would add about 314,000 insureds, including 4,000 in Nevada.