CARMEL, Ind. Conseco Inc. shares fell more than 3% Thursday after it said it would scrap the controversial gain-on-sale accounting method.

Gain-on-sale accounting requires lenders to use predicted performance to book net interest income from a loan up-front. From now on, the insurance giant will recognize such income over the life of the loan.

In a press statement, Conseco's chief financial officer, Rollin M. Dick, said the change "should neither increase nor decrease the total profit we recognize over the life of each new loan, but it will change the timing of profit recognition." Using the "portfolio" technique instead of gain-on-sale, he said, the company will report lower earnings from each new loan as it is securitized, but higher earnings later on, as the loan pays interest.

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