Conseco cuts to affect
isle customers

Conseco Inc. plans to phase out about half of its major medical health insurance policies, which could leave as many as 80,000 clients in 16 states, including Hawaii, without a provider and about 300 employees without jobs.

The Indiana-based company told The Indianapolis Star that the policies to be cut from Conseco Medical Insurance Co. have been unprofitable.

In Hawaii, Conseco is a relatively small player in the health insurance market, according to state Insurance Commissioner, Wayne Metcalf.

That they are leaving Hawaii is no surprise, he said.

"They are getting out of states where they don't do a lot of business. Hawaii is one of those states," he said.

The actual numbers of policyholders in Hawaii is difficult to determine because of the way Conseco is structured, Metcalf said. "Because they are organized as a life insurance company that offers a health insurance plan, they file data with us on premium volume, not on the number of covered lives as is the case with other life insurers," he said.

Metcalf said the company would be required to honor any policies until they expire.

Conseco spokesman Mark Lubbers said Conseco has tried to peddle the Rockford, Ill.-based arm of the company but found no takers for CMIC as a unit. Conseco still hopes to sell parts of CMIC in states where health insurance remains profitable, Lubbers said.

The first notification letters were sent July 27, giving customers six to 12 months notice before policies begin to expire Feb. 1, 2002. By Aug. 1, 2002, all affected policies will expire.

State sells bonds for school projects

Capitalizing on its high bond rating, the state said it sold $456.75 million in general obligation bonds yesterday.

The state said the bonds included $300 million in new money and $156.75 million to refinance existing debt. They carried an interest rate of 4.72 percent. Gov. Ben Cayetano said the refinanced debt will save $7.15 million since the past bonds carried an interest rate of 5.41 percent.

The state said the new bonds -- which carried a trip-A rating from various bond rating agencies -- will be used for construction at the University of Hawaii as well as at public schools and libraries.

Auto Club of S. Calif. cleared of wrongdoing

LOS ANGELES >> The Automobile Club of Southern California did not break the law by selling Hawaiian vacations through a company it secretly owned, the state attorney general's office has concluded.

The nonprofit auto club, which runs a travel agency, bought a controlling interest in tour operator Pleasant Holidays two years ago, but did not reveal the purchase to its nearly 5 million members or to people booking trips through the company.

When the relationship was revealed by a trade publication in June, media calls prompted the state attorney general's office to investigate.

Yesterday, the state said the auto club's silence did not violate the law.

Pleasant Holidays is a leading tour packager for Hawaii vacations. Last year, the company sent about 450,000 people to Hawaii, bringing the company about $450 million in revenue.

Isle cruise parent delays earnings report

American Classic Voyages Co. has rescheduled its second-quarter earnings announcement, which had been set for today, because of "ongoing discussions" with the Mississippi shipyard it contracted to build its two 1,900-passenger cruise lines for use in Hawaiian waters. The earnings will be announced Tuesday, the company said.

It was reported earlier this week that Sen. John McCain, R-Ariz., had written to President Bush charging that Northrop Grumman/Ingalls Shipbuilding is as much as 18 months behind in its work. The first ship was due to be completed in 2003.