The Illinois Department of Insurance is seeking the rehabilitationof Land of Lincoln Mutual Health InsuranceCo. after the Centers for Medicare and Medicaid Services did not allowthe suspension of the co-op's federal risk adjustment program liability.

Anne Dowling, acting director of the state's insurance department,has requested the Illinois Attorney General to petition the Circuit Court of CookCounty for an order of rehabilitation for the insurer. The CMS' decision comes despiteLand of Lincoln being owed an outstanding payment of approximately $70 million aspart of the related federal risk corridor program.

Under an order of rehabilitation, Land of Lincoln will temporarilycontinue to operate under Dowling's supervision. The co-op will continue payingpolicyholder claims, while Dowling works with the CMS to establish a 60-day specialenrollment period for the insurer's policyholders to obtain new health care policies,and prepare Land of Lincoln for liquidation.

Land of Lincoln provides health insurance to approximately 49,000Illinois residents.