The Ace Group of Companies has sold off the long-term care insurance business of Combined Insurance Company of America to MedAmerica in a $70 million deal.

Ace, which moved its holding company to Switzerland last year and retains its principal executive offices in Bermuda, acquired Combined from Aon Corporation for $2.56 billion a year ago.

MedAmerica said yesterday that the transaction involves a block of 11,000 contracts which MedAmerica expects to generate $12 million in annualised written premium. The transaction was effective on December 31, 2008.

"Ace recognises that servicing long-term care insurance requires dedicated operations and specialised risk management expertise," Bill Naylon, vice-president of finance and capital markets at MedAmerica, said.

"Combined Insurance and Ace entrust us with the future of their insureds," said Chadwick Roy, director of capital markets at MedAmerica. "They value the security MedAmerica offers. We're not an insurance supermarket."