Humana Inc., a health insurer whose shares have fallen about 60 percent in 12 months, said it will take a fourth-quarter pretax charge of as much as $500 million--resulting in a loss--because it paid too much for some acquisitions.

Humana agreed to sell its PCA Property & Casualty Insurance Co. unit, which includes a workers-compensation business, to a subsidiary of White Mountains Insurance Group Ltd. for $125 million in cash to reduce debt. It's also selling a Medicare-insurance unit for an undisclosed price.

Humana is trying to revive earnings that have dropped in the past three quarters because it didn't raise premiums enough to cover higher medical costs. The company has said multi-year rate agreements with some commercial customers limited its ability to boost premiums.

"They are continuing to make sure that they're putting in the right premiums," said analyst William McKeever of PaineWebber Inc., who rates Humana a "neutral." "They've missed now for several years."

Shares of Humana fell 5/8, to 7-9/16, on the New York Stock Exchange.

Goodwill is the intangible assets that make up the difference between the book value of a company and a price at which the company is purchased. Acquirers have to amortize goodwill during a number of years, which reduces earnings.

Humana is taking the pretax charge of $400 million to $500 million because goodwill from some of its acquisitions was worth less than originally calculated, the company said, meaning Humana paid too much. The company said it's analyzing purchases, including the 1997 acquisition of PCA's parent company, to calculate the exact amount of the fourth-quarter charge.

"It's not related to the [managed-care] operations, so it's forgivable," McKeever said of the charge.

The cut in goodwill should help increase earnings in the future, some analysts said. Humana's earnings declined in each of the first three quarters of 1999.

Other health insurers, such as Foundation Health Systems Inc. and WellPoint Health Networks Inc., have sought to jettison their workers-compensation businesses, which provide policies that cover employees who can't work because of disabilities or other problems. Large health insurers have had trouble making money with the programs and found themselves distracted from their primary managed-care operations as health-care costs increased.

"Virtually every other company in the field has already done this," said Todd Richter, a Banc of America Securities analyst with a "neutral" rating on Humana. "There was a time when people believed there was some synergy between workers' comp and the traditional medical business. That synergy hasn't worked out."

Humana agreed to sell the business that provides insurance supplementing Medicare, the government health program for the elderly, to a unit of Cincinnati-based American Annuity Group Inc. The price wasn't disclosed. The unit has about 42,000 customers in 17 states in its "Medigap" plans. Both sales are expected to close in the first quarter.

CAPTION: Humana, based in Louisville, said it paid too much for some of its recent acquisitions.