Bankers Life experienced a 26% increase in its pre-tax operating earnings, which, along with a boost in life and Medicare supplement sales, led its parent, Conseco, to report $15.4 million in net income in the quarter.

The third-quarter results marked the third consecutive quarter of profit for the Carmel, Ind.-based insurer, said CEO Jim Prieur.

The company reported that its Bankers Life segment had pre-tax operating earnings of $85.4 million in the third quarter, compared to $67.8 million in the third quarter of 2008.

Company officials said in a statement that Bankers Life’s results for the third quarter were affected by several factors. The company saw an increase in earnings of nearly $20 million from the PFFS business assumed through its quota-share agreements with Coventry, with the last of these agreements to expire Jan. 1, 2010.

The company also saw increases in its share of risk adjustment premium payments made by the U.S. Department of Health and Human Services’ Center for Medicare and Medicaid Services, as well as an increase of nearly $7 million in earnings from company-owned life insurance policies, purchased to fund the segment’s deferred compensation plan for certain agents.

At the same time, the company reported a loss of about $7 million from long-term care product margins, primarily from higher claim expense and a decrease in premiums following policy lapses.

Its Colonial Penn segment reported pre-tax operating earnings of  $7.4 million in the third quarter, a 14% increase from the third quarter of 2008. Results for the third quarter of 2009 reflect favorable mortality experience compared to the same period in 2008, company officials said.

Meanwhile, its Conseco Insurance Group segment showed pre-tax operating earnings of $21.6 million in the third quarter of 2009, down 37%.

The losses were blamed on several factors, including a $7 million reduction related to universal life products primarily due to additional amortization expense from changes in its future estimates of the timing of changes to certain non-guaranteed elements related to the “Lifetrend” life insurance products, as well as investment earnings on decreased yields from its portfolio. In addition, the segment suffered from a reduction of $3 million from expenses related to the settlement of several lawsuits, which it did not identify.

The third-quarter results also an increase in its deferred tax valuation allowance of $20 million, established after completing a reinsurance transaction with Wilton Re.

The results from the third quarter of 2008 included a $157.4 million loss from discontinued operations related to the agreement to transfer the stock of Senior Health Insurance Co. to an independent trust, completed in the fourth quarter of last year.