Cigna Corp., Philadelphia, said it expects to take an additional third-quarter charge of $315 million on an arbitration settlement by its now-defunct reinsurance operation. The announcement marks the second time in just over a month that the nation's third-largest health insurer has warned it would reduce its third-quarter net income because of expenses stemming from its former reinsurance business, which was sold in 2000. In early September, it reported plans to take a $720 million charge. Cigna was one of three insurers that had pooled coverage to spread risk on workers' compensation claims. The pool, which was formerly managed by Unicover Managers, had obtained reinsurance for a significant portion of its exposure to claims, but disputes over the coverage led to arbitration. An arbitration panel rendered a decision recently requiring payment by Cigna, the company said. Cigna also has been struggling with rising medical costs in its health insurance business and has had trouble boosting enrollment, partly because of service issues. The company will report third-quarter earnings on Nov. 1. Last year, it posted third-quarter net income of $270 million, or $1.81 per share, on revenue of $4.8 billion.
Cigna's third-quarter charges top $1 billion
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