Worth Watching Stocks: Huntington Bancshares Incorporated (NASDAQ:HBAN), CNO Financial Group Inc (NYSE:CNO)

On Friday, Shares of Huntington Bancshares Incorporated (NASDAQ:HBAN), added 1.54% and closed at $9.86 in the last trading session. The last trading range of the stock ranges between $9.70 and $9.92. Huntington Bancshares Incorporated (HBAN) anticipates to report its third quarter earnings on Wednesday, October 26, 2016, before the market opening. A news release and supporting financial data will be available at that time on the company’s shareholder relations website.

CNO Financial Group Inc (NYSE:CNO), dropped -1.80% and closed at $15.27 in the last trading session. The last trading range of the stock ranges between $14.30 and $15.44. The company’s Market capitalization is $2.63 Billion with the total Outstanding Shares of 175.14 million. CNO Financial Group, Inc. (CNO) declared recently that its auxiliaries, Bankers Conseco Life Insurance Company (BCLIC) and Washington National Insurance Company (WNIC), are terminating reinsurance agreements with Beechwood Re (BRe) and recapturing about $550 million of closed block long-term care liabilities.

As formerly revealed in a Form 8-K that was filed on August 1, 2016, CNO had begind an independent third party audit of about $116 million (1) of Level 3 investments that were held in trusts on behalf of BCLIC and WNIC. Based on the information obtained in the audit, CNO, together with the New York Department of Financial Services (NYDFS) and the Indiana Department of Insurance (IDOI), have concluded that a noteworthyportion of the investments do not comply with applicable regulatory requirements for assets supporting the reinsurance agreements. As such, the NYDFS and IDOI directed BCLIC and WNIC, respectively, to remedy the resultant deficiency.

In order to protect the interests of CNO, BCLIC, WNIC and their respective stakeholders, the CNO companies have taken the following actions:

  • BCLIC and WNIC sent written notice to Wilmington Trust, N.A. (Wilmington), as trustee to the reinsurance trusts, that BCLIC and WNIC exercised their rights to right away withdraw all assets from the trusts, and instructed Wilmington to deliver the assets to custodial accounts of BCLIC and WNIC.
  • BCLIC and WNIC gave written notice to BRe that they are terminating their reinsurance agreements with BRe, effective right away.
  • BCLIC and WNIC recently expanded the scope of the audit to include additional Level 3 investments with a stated amount of about $90 million.
  • BCLIC and WNIC begind an arbitration proceeding and demanded emergency relief, specifically, that BRe provide immediate access to certain documents and information regarding the trust assets, which will allow the audit of the aforementioned Level 3 investments to be concluded. BCLIC and WNIC are also seeking compensatory, consequential and punitive damages from BRe as part of the arbitration.
  • BCLIC and WNIC have also begind litigation against current and former individual principals of BRe (Mark Feuer, Scott Taylor and David Levy) for the damages caused by their actions.

The CNO companies are resuming responsibility for all aspects of policyholder administration. We expect no impact to policyholders as a result of these actions.

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