Aetna Says SEC Probing Acquisitions

HARTFORD, Conn. — Aetna Inc., the biggest U.S. health insurer, said U.S. regulators are reviewing its acquisitions, including this year’s $1-billion purchase of a Prudential Insurance Co. of America unit, to determine if it properly accounted for costs.

The Securities and Exchange Commission review is the latest in a series of problems with the Prudential HealthCare acquisition, which took half a year to pass regulatory muster and is losing money at a rate equal to $175 million a year.

At the same time it disclosed the SEC review, Aetna reported earnings that exceeded analyst expectations.

Aetna said its third-quarter profit from operations rose 27% to $193.1 million, or $1.27 a share. That beat the $1.16 average estimate of analysts polled by First Call Corp. Revenue rose 29% to $7.02 billion.

Aetna has reduced costs this year by withdrawing its Medicare health maintenance organizations from several markets, after legislation last year reduced the expected growth in government payments to Medicare HMOs.

Aetna also boosted rates it charges employers for health benefit plans, and it’s receiving certain payments from Prudential to offset losses from Prudential HealthCare.

Shares of Aetna fell $2.69 to close at $48.50 Thursday on the New York Stock Exchange. The shares have lost 35% of their value since the beginning of September, in part on concern about the Prudential purchase. Health insurer stocks in general have fallen because of concerns about possible legislation placing restrictions on managed health-care plans and the threat of class-action lawsuits.

Analysts said investors are concerned that the SEC review may force the company to restate its earnings.