UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549

FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of
the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 27, 2006
CONSECO, INC.
 (Exact name of registrant as specified in its charter)

   Delaware                               001-31792               75-3108137
----------------------                 ----------------        --------------
(State or other                          (Commission          (I.R.S. Employer
jurisdiction of                          File Number)        Identification No.)
organization)

11825 North Pennsylvania Street
        Carmel, Indiana                                             46032
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(Address of principal executive offices)                          (Zip Code)	

(317) 817-6100
 (Registrant's telephone number, including area code)

Not Applicable
 (Former name or former address,
if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
Item 1.01. Entry into a Material Definitive Agreement.
On July 27, 2006, the Internal Revenue Service entered into a final closing agreement with Conseco, Inc. (the "Company") relating to the previously disclosed settlement which involved the characterization of the Company's net operating loss pertaining to its investment in Conseco Finance Corp. ("CFC"). In the closing agreement, it was agreed that $2.1 billion of the worthless securities loss, which arose from our predecessor's investment in CFC, will be treated as life insurance company losses and the balance of the worthless securities loss will be treated as non-life losses. (Such amounts are prior to the application of certain cancellation of indebtedness reductions.) Copies of the closing agreement and the Company's press release are filed as Exhibits 10.21 and 99.1 to this Current Report on Form 8-K.
Item 7.01. Regulation FD Disclosure.
On August 1, 2006, the Company announced that it has reached a tentative settlement in the class action litigation case referred to as In Re Conseco Life Insurance Company Cost of Insurance Litigation. The settlement is subject to a court fairness hearing and other conditions. The Company expects to record additional expenses of approximately $100.3 million, after income taxes, related to the settlement in the quarter ended June 30, 2006. A copy of the Company's press release is filed as Exhibit 99.1 to this Current Report on Form 8-K.
Item 9.01. Financial Statements and Exhibits.
(c) Exhibits

10.21  Closing Agreement on Final Determination Covering Specific
       Matters

99.1   Press release of Conseco, Inc. issued August 1, 2006.	

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
CONSECO, INC.
August 1, 2006

By:  /s/ John R. Kline
     ------------------------
     John R. Kline
       Senior Vice President and
       Chief Accounting Officer	

Exhibit 10.21
CLOSING AGREEMENT BETWEEN:
 Conseco, Inc. and Subsidiaries and
Commissioner of Internal Revenue Service
Closing Agreement on Final Determination Covering Specific Matters
Under section 7121 of the Internal Revenue Code, Conseco, Inc. and Subsidiaries, (EIN 75-3108137), 11825 North Pennsylvania Street, Carmel, Indiana 46032, on behalf of itself and as the common parent of the affiliated group (collectively referred to as "the Taxpayer") for the tax year ended December 31, 2003 and the Commissioner of Internal Revenue Service (the "Commissioner") hereby make the following closing agreement:
WHEREAS, during 2003, the taxpayer conducted both life insurance business and nonlife insurance business;
WHEREAS, the taxpayer elected, pursuant to Section 1504(c)(2), to file a consolidated Federal life/nonlife income tax return for 2003;
WHEREAS, the stock in a group member of taxpayer became worthless during 2003;
WHEREAS, the taxpayer and the Commissioner have agreed that the loss is a worthless securities loss pursuant to Section 165(g)(3) and the amount of the worthless securities loss is $5,932,664,998; however, the parties have not agreed on whether the loss was incurred by a life or a nonlife company for purposes of Section 1503(c)(1).
WHEREAS, the taxpayer claimed the loss as a life insurance loss and the Commissioner has challenged the taxpayer's characterization of the loss as a life insurance loss;
WHEREAS, the parties want to resolve the dispute with finality
NOW IT IS HEREBY DETERMINED AND AGREED for federal income tax purposes, that:
1. Of the $5,932,664,998 worthless securities loss incurred in 2003 by taxpayer, $2,100,000,000 is a worthless securities loss realized by CIHC, Inc. (later renamed Conseco Life Insurance Company of Texas)(EIN 81-0626335), a subsidiary of the taxpayer, as a life insurance company loss includible in the consolidated life insurance subgroup.
2. Of the $5,932,664,998 worthless securities loss incurred in 2003 by taxpayer, $3,832,664,998 is a worthless securities loss realized by CIHC, Inc. (later renamed Conseco Life Insurance Company of Texas)(EIN 81-0626335), a subsidiary of the taxpayer, as a nonlife insurance company loss includible in the consolidated nonlife insurance subgroup.
CLOSING AGREEMENT BETWEEN:
 Conseco, Inc. and Subsidiaries and
Commissioner of Internal Revenue Service
This agreement is final and conclusive except:
(1) the matter it relates to may be reopened in the event of fraud, malfeasance, or misrepresentation of material fact;
(2) it is subject to the Internal Revenue Code sections that expressly provide that effect be given their provisions (including any stated exception for Code section 7122) notwithstanding any other law or rule of law; and
(3) if it relates to a tax period ending after the date of this agreement, it is subject to any law, enacted after the agreement date, that applies to that tax period.
By signing, the above parties certify that they have read and agreed to the terms of this document.

Conseco Inc.                                Commissioner
and Subsidiaries                            Internal Revenue Service

By: /s/ William T. Devanney, Jr.            By:/s/ James T. Izbicki
   -----------------------------               --------------------

Title:  Sr. Vice Pres. Corp. Tax            Title: Appeals Team Case Leader

Date:   01/12/06                            Date:  07/27/2006	

Exhibit 99.1
NEWS
For Release Immediate
Contacts (News Media) Tony Zehnder, EVP, Corporate Communications 317.817.4409
(Investors) Lowell Short, SVP, Investor Relations 317.817.2893
Conseco Announces Tentative Litigation Settlement and Resolution of Tax Matter
Carmel, Ind., August 1, 2006 - Conseco, Inc. (NYSE:CNO) announced today that it has reached a tentative settlement in the class action litigation case referred to as In Re Conseco Life Insurance Company Cost of Insurance Litigation. The settlement, which involved policies sold by insurance companies that were subsequently acquired by Conseco, is subject to a court fairness hearing and other conditions. As a result of the settlement, the Company expects to record additional expenses of approximately $100.3 million, after taxes, in the quarter ended June 30, 2006. Conseco is scheduled to announce its quarterly earnings results after the market closes on August 2, 2006.
James Hohmann, Conseco's interim CEO, said "implementation of this settlement will resolve a significant historical issue and will allow our current management team, our associates, our regulators and our rating agencies to focus more fully on Conseco's progress toward becoming a leading provider of life insurance, supplemental health insurance and annuities for middle America." Despite this charge, the insurance subsidiaries continue to maintain a strong capital position for the protection of all policyholders. Although we have not completed our second quarter statutory financial statements, we estimate that our consolidated risk-based capital ratio (a non-GAAP measure) will exceed 330% as of June 30, 2006.
The Company also announced today that its previously announced tentative settlement with the Internal Revenue Service has been finalized. As previously disclosed, the settlement, which involved the characterization of the company's net operating loss pertaining to its investment in Conseco Finance, was awaiting approval of the related audit by the Joint Committee on Taxation. As a result of this resolution, Conseco expects to reduce the valuation allowance on its deferred income tax assets by approximately $260 million at June 30, 2006. The change in the valuation allowance will not affect the Company's net income, but will be a direct increase to shareholders' equity at June 30, 2006.
Collectively, the tentative litigation settlement charge and the deferred tax valuation allowance adjustment will increase shareholders' equity by approximately $160 million at June 30, 2006.
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Conseco (2) August 1, 2006
Conseco, Inc.'s insurance companies help protect working American families and seniors from financial adversity: Medicare supplement, long-term care, cancer, heart/stroke and accident policies protect people against major unplanned expenses; annuities and life insurance products help people plan for their financial futures. For more information, visit Conseco's web site at www.conseco.com.
Cautionary Statement Regarding Forward-Looking Statements. Our statements, trend analyses and other information contained in this press release relative to markets for Conseco's products and trends in Conseco's operations or financial results, as well as other statements, contain forward-looking statements within the meaning of the federal securities laws and the Private Securities Litigation Reform Act of 1995. Forward-looking statements typically are identified by the use of terms such as "anticipate," "believe," "plan," "estimate," "expect," "project," "intend," "may," "will," "would," "contemplate," "possible," "attempt," "seek," "should," "could," "goal," "target," "on track," "comfortable with," "optimistic" and similar words, although some forward-looking statements are expressed differently. You should consider statements that contain these words carefully because they describe our expectations, plans, strategies and goals and our beliefs concerning future business conditions, our results of operations, financial position, and our business outlook or they state other "forward-looking" information based on currently available information. Assumptions and other important factors that could cause our actual results to differ materially from those anticipated in our forward-looking statements include, among other things: (i) our ability to achieve an upgrade of the financial strength ratings of our insurance company subsidiaries and the impact of prior rating downgrades on our business; (ii) the ultimate outcome of lawsuits filed against us and other legal and regulatory proceedings to which we are subject; (iii) our ability to obtain adequate and timely rate increases on our supplemental health products including our long-term care business; (iv) mortality, morbidity, usage of health care services, persistency and other factors which may affect the profitability of our insurance products; (v) our ability to achieve anticipated expense reductions and levels of operational efficiencies; (vi) the adverse impact of our Predecessor's bankruptcy proceedings on our business operations, and relationships with our customers, employees, regulators, distributors and agents; (vii) performance of our investments; (viii) our ability to continue to recruit and retain productive agents and distribution partners and customer response to new products, distribution channels and marketing initiatives; (ix) the risk factors or uncertainties listed from time to time in our filings with the Securities and Exchange Commission; (x) general economic conditions and other factors, including prevailing interest rate levels, stock and credit market performance and health care inflation, which may affect (among other things) our ability to sell products and access capital on acceptable terms, the returns on and the market value of our investments, and the lapse rate and profitability of policies; (xi) changes in the Federal income tax laws and regulations which may affect or eliminate the relative tax advantages of some of our products; and
(xii) regulatory changes or actions, including those relating to regulation of the financial affairs of our insurance companies, such as the payment of dividends to us, regulation of financial services affecting (among other things) bank sales and underwriting of insurance products, regulation of the sale, underwriting and pricing of products, and health care regulation affecting health insurance products.
Other factors and assumptions not identified above are also relevant to the forward-looking statements, and if they prove incorrect, could also cause actual results to differ materially from those projected. All written or oral forward-looking statements attributable to us are expressly qualified in their entirety by the foregoing cautionary statement. Our forward-looking statements speak only as of the date made. We assume no obligation to update or to publicly announce the results of any revisions to any of the forward-looking statements to reflect actual results, future events or developments, changes in assumptions or changes in other factors affecting the forward-looking statements.
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