Conseco Inc., a financial services and insurance firm that has been struggling for years with mounting debt and losses after acquiring the nation's largest mobile-home lender, filed for protection from its creditors late Tuesday.

The insurance units of the Indianapolis-based company were not included in the bankruptcy filing and continue operating under the watchful eyes of state regulators, with the company saying that "policyholders will not be affected."

Conseco, which has about 13,000 employees, is the nation's seventh-largest publicly traded life and health insurance company. With $52 billion in assets and $51 billion in debt, Conseco would be the third-largest corporate bankruptcy after those of WorldCom Inc. and Enron Corp. But Mark Lubbers, a Conseco spokesman, said that "well over half" of the assets listed belong to banking and insurance operations that are excluded from the filing. Under federal law, banks and insurance companies may not seek bankruptcy protection.

The bankruptcy filing was the latest development in a string of setbacks that began in 1998, when Conseco acquired mobile-home lender Green Tree Financial Corp. and renamed it Conseco Finance Corp. The $6 billion acquisition, one of many made by the company in the 1990s, left Conseco vulnerable to the economic slump that followed. Many financially vulnerable borrowers stopped making payments or refinanced their loans, reducing anticipated revenue.

"This has been a slow-moving train wreck," said James L. Bromley, a bankruptcy lawyer at Cleary, Gottlieb, Steen & Hamilton. "Everyone knew this was coming. It was just too far gone."

The financial troubles began piling up under company founder Stephen C. Hilbert, a former encyclopedia salesman, who was relieved of his duties as chairman and chief executive in 2000, when the company was $8.2 billion in debt.

Gary Wendt, former chief executive of General Electric Capital Corp., was brought in to attempt to revive the company, but he stepped down this past October. Shortly afterward, the company reported a third-quarter loss of $1.77 billion -- more than quadruple its loss for the year-earlier period.

Conseco's bankruptcy filing includes an agreement in principle with its bankers and bondholders to restructure the company and reduce its debts, the company said yesterday. Chief executive William J. Shea said the company will "do everything we can" to maximize the potential of its businesses.

Conseco Finance Corp. said it has reached a tentative agreement to sell its assets and operations to private investors that include Fortress Investment Group and J.C. Flowers & Co. for a price equal to its outstanding secured debt. But the sale would be subject to a court-supervised auction that would allow other bidders to to make higher offers.

Bankruptcy analysts said Conseco was typical of companies that took on large amounts of debt during the recent boom years, assuming that they would enjoy continued growth. "When the bubble burst, people started to reevaluate the prospects for these companies, which now looked lower, and the debt levels looked higher," said Karin Thorburn, an associate professor of finance at the Tuck School of Business at Dartmouth University.

William A. Brandt Jr., president of Development Specialists Inc., a restructuring consulting firm in Chicago, said Conseco's difficulties will be compounded by the fact that some of its more profitable operations are in the regulated insurance industry. Conseco needs to reassure state insurance regulators that its insurance operations are not threatened by its balance sheet troubles, he said.

When insurance companies become insolvent, they are typically taken over by state receiverships as a way to protect consumers.

Insurance and bankruptcy experts said Conseco's insurance customers should be safe for now.

Conseco writes policies in the District, Maryland and Virginia.

D.C. Insurance Commissioner Lawrence H. Mirel said Conseco companies have $3 million in life insurance policies in the District, $1.8 million in annuities, and $6 million in accident and health insurance. "We think the companies are all fine," he said. "They really are separately regulated. We think there's not going to be any problem."

Other analysts, though, weren't so sure. "It's perplexing to hear people say that the insurance subsidiaries are not going to be affected by any of this," said Robert E. Hoyt, an insurance professor at the University of Georgia. "I understand there are various protective shells. But it's still all one company. I would be very cautious in assuming it's a non-issue."

Shares of Conseco closed yesterday at 6 cents, up 0.021 cents.

Staff researcher Richard S. Drezen contributed to this report.

Chief executive William J. Shea talks to reporters in Chicago about Conseco's decision to file for bankruptcy protection. Attorneys from the law firm Kirkland & Ellis enter the federal courthouse in Chicago on Tuesday to make Conseco's bankruptcy filing. Conseco's insurance units were not included in the filing.