US insurance and loan company Conseco has filed for the third-biggest US bankruptcy ever with $6.5bn (£4bn) in debts, it has been reported.

Conseco warned last month that it might file for bankruptcy protection after a quarterly loss of $1.8bn.

Its insurance subsidiaries were excluded from the filing and will continue to honour policies.

Conseco was set up by encyclopaedia salesman Stephen Hilbert, who was ousted as chairman and chief executive in 2000, to be replaced by GE Capital head Gary Wendt.

Wendt himself was replaced in September this year by William Shea.

The company had owned assets such as an extensive art collection and a riverboat casino.

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