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Universal American Reinsures Life and Annuity Business

^{Published on 2008-12-01 15:34:08 - Market Wire}
 

RYE BROOK, N.Y.--([ BUSINESS WIRE ])--Universal American Corp. (NYSE: UAM) today announced it has agreed to reinsure substantially all of its in force life insurance and annuity business with Commonwealth Annuity and Life Insurance Company, a Goldman Sachs Group, Inc. subsidiary (NYSE:GS).

The agreements, which are subject to regulatory approval, are expected to become effective in the first quarter of 2009. The transaction will generate approximately $55-$60 million of after-tax statutory profit in Universal American's insurance company entities and, in addition, will reduce required capital by approximately $10-$15 million. On a GAAP basis, the Company will incur a noncash after-tax loss of approximately $5-$10 million, primarily as a result of writing off unamortized deferred acquisition costs relating to the business reinsured. The Company expects that the transaction will be slightly dilutive to earnings in 2009.

"This transaction strengthens our capital base and further allows us to focus on our core businesses," said Richard A. Barasch, Chairman and Chief Executive Officer of Universal American. "Universal American will continue to underwrite certain life insurance products as part of its continuing commitment to the senior market."

About Universal American Corp.

Universal American offers a diverse range of healthcare products - including health insurance, managed care, and prescription drug benefits - through its subsidiaries. Its companies are collectively among the leading providers of Medicare Advantage and Medicare prescription drug plans in the U.S., as over two million seniors rely on Universal American's products for their health or prescription drug coverage. For more information on Universal American, please visit our website at [ www.universalamerican.com ].

Matters discussed in this news release and oral statements made from time to time by representatives of Universal American may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and the Federal securities laws. Although Universal American believes that the expectations reflected in any forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be achieved. Forward-looking information is subject to risks, trends and uncertainties that could cause actual results to differ materially from those projected. Many of these factors are beyond Universal American's ability to control or predict. Important factors that may cause actual results to differ materially and could impact Universal American and the statements contained in this news release can be found in Universal American's filings with the Securities and Exchange Commission, including quarterly reports on Form 10-Q, current reports on Form 8-K and annual reports on Form 10-K. For forward-looking statements in this news release, Universal American claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Universal American assumes no obligation to update or supplement any forward-looking statements, whether as a result of new information, future events or otherwise.