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Lexington Insurance Company, a member company of American International Group, Inc. (AIG), today introduced LexAssure(SM), primary professional liability insurance designed expressly for small- to mid-sized regional accounting firms with annual revenue greater than $1,000,000.

LexAssure(SM) covers all major accounting practice areas, with coverage extending to business consulting, investment advisory services, financial planning and estate planning. In addition, LexAssure(SM) provides coverage for personal injury that arises out of professional services rendered and advertising injury.

“Lexington is well established as a leading underwriter of professional liability insurance for the largest accounting firms,” said Paul Cunningham, Vice President, Professional Liability, Lexington Insurance Company. “The introduction of LexAssure(SM) demonstrates Lexington’s commitment to the accounting industry by bringing our professional liability underwriting expertise to smaller firms that provide a broad array of accounting services.”

LexAssure(SM) is offered as a non-admitted policy and is available on an open brokerage basis. Minimum premiums start at $15,000 for the first $1 million in limit. Capacity is available up to $15 million with a minimum deductible of $10,000. Customized and complimentary risk management support and services are available to all LexAssure(SM) clients. Companion employment practice and management liability products are also available from Lexington.

For more information please contact: Chris Andrews at 617 330 8469 or or Paul Warburton at 215 255 6482 or paul.

American International Group, Inc. (AIG), world leaders in insurance and financial services, is the leading international insurance organization with operations in more than 130 countries and jurisdictions. AIG companies serve commercial, institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer. In addition, AIG companies are leading providers of retirement services, financial services and asset management around the world. AIG’s common stock is listed on the New York Stock Exchange, as well as the stock exchanges in London, Paris, Switzerland and Tokyo.

*Insurance is underwritten by member companies of American International Group, Inc., and is subject to underwriting review and approval. The description herein is a summary only. It does not include all terms, conditions and exclusions of the policies described. Please refer to the actual polices for complete details of coverage and exclusions. Coverage may not be available in all jurisdictions. Non-insurance products may be provided through independent third parties.

Acceptance Insurance Companies Inc.And IGF Insurance Company have signed a definitive agreement for American Agrisurance(R) and other Acceptance affiliates to purchase the crop insurance assets of IGF Insurance Company for cash and the assumption of certain insurance and reinsurance contracts to be determined prior to closing. IGF Insurance Company is a subsidiary of Symons International Group, Inc.And the nation’s fifth largest crop insurance company. American Agrisurance and its affiliates comprise the nation’s third largest crop insurance company.

Directors of all affected companies have approved the agreement, according to Acceptance President and Chief Executive Officer John E. Martin. The purchase is subject only to customary conditions and regulatory approvals, which the companies expect to receive before the end of June.

“Bringing these two companies together allows us to create a new presence in the crop insurance industry, combining the best of both organizations into a single, focused and efficient operation,” Martin said. “The next step is to make sure this transition is a smooth one for the tens of thousands of agents and farmers these companies serve, and that’s where we are now concentrating all of our efforts.”

Since January 2000 Acceptance has sold various portions of its property and casualty insurance operations, including a transaction announced earlier this month. “Today’s agreement is another part of the Company’s ongoing strategy to build on the strength of our AmAg unit, a leading provider of agricultural risk management products and services,” said Martin. “We have increased the Company resources dedicated to this business consistently during the past 17 months and adding the assets of IGF will continue to build AmAg’s ability to help farmers protect against bad weather, low commodity prices and other risks.”

Martin continued, “These two companies have led the industry in developing innovative new products for farmers’ risk management needs. AmAg invented Crop Revenue Coverage(TM), which quickly became the most popular new crop insurance product ever introduced. IGF developed the unique HAILPLUS(TM) system that is the most successful product of its kind in the industry, and the first to allow agents to write MPCI and Crop-Hail on the same application. We expect to continue this leadership.”

Dennis G. Daggett, President of IGF Holdings, Inc., said, “We are excited about the new opportunities the combined resources of IGF and AmAg can create for agricultural producers and crop insurance agents. The new organization will provide the best products and services in our industry.”

Acceptance Insurance Companies Inc. is an insurance holding company providing agricultural risk management products and services throughout the United States. American Agrisurance, the Company’s wholly owned crop insurance marketing subsidiary, is a recognized leader in the crop insurance industry. Symons International Group also is an insurance holding company and through its Superior Insurance Company and Pafco General Insurance Company is a nonstandard automobile insurer.

This release includes forward-looking statements with respect to the Company’s expected future financial results. Such forward-looking statements are subject to inherent risks and uncertainties that may cause actual results to differ materially from those contemplated by such forward-looking statements, including factors noted in the Company’s Form 10K for the year ended December 31, 2000, which are incorporated herein by reference.

InsuranceVianet poised to review, integrate future business

and expansion opportunities.

A new holding company, InsuranceVianet, has been formed to provide overall guidance and governance of its two subsidiary operations, InsuranceNoodle and InsureVianet.

“In creating InsuranceVianet, the board of directors has solidified the relationship between InsuranceNoodle and InsureVianet and strategically positioned the two companies for future growth,” said Don Urbanciz, InsuranceVianet’s new CEO. “InsuranceVianet is now poised to review and integrate additional business opportunities, such as new joint ventures and acquisitions, that will enhance and expand the online products and services InsuranceNoodle and InsureVianet offer to small businesses and commercial insurance agencies across the continental United States.”

Other newly elected InsuranceVianet officers are Chairman Geoff Kalish ; COO Peter Bothwell; CFO Tim Adelman , and Secretary Kathyrn Emmerson .

In addition, Emmerson and Bothwell were named CEOs of the InsuranceNoodle and InsureVianet subsidiaries, respectively.

About InsuranceNoodle nsuranceNoodle, a Chicago-based insurance e-broker, is the most complete online insurance solution for small business, ensuring comprehensive, tailored coverage at competitive prices. Through a quick and streamlined process, InsuranceNoodle offers agencies and small business owners comparative quotes and online purchasing of products from leading insurers such as AIG, Chubb, Clarendon, The Hartford, Kemper, Philadelphia Insurance Companies, The St. Paul, XL Specialty Insurance and Zurich. Real-time customer service and advice from licensed insurance advisors is available from 7:30 a.m. to 6 p.m., Central Time, Monday through Friday. InsuranceNoodle is licensed in 49 states, reaching over 99% of all small businesses in the U.S. through its extensive national network of independent insurance agencies or via direct access online.

InsureVianet, a division of InsuranceNoodle, Inc., is based in Bloomfield, CT, and provides commercial insurance agents and brokers with fast, convenient online proprietary and innovative small business P&C products, including Employment Practices Liability (EPL) insurance. InsureVianet also offers value-added services that help small business policyholders achieve and maintain compliance with federal and state employment practice regulations, reduce the chance of incidents escalating into costly claims, and assist in creating a productive work environment. InsureVianet’s policies are underwritten by XL Specialty Insurance Company, a member of XL Capital Ltd.

A new state report finds that the state’s unemployment insurance trust fund — funded by employers to cover benefits to unemployed workers — is being depleted at a faster rate than expected.

As a result, the fund balance is expected to drop to a point that automatically triggers a 15 percent “emergency solvency surcharge” next January and possibly another 15 percent surcharge in January 2005.

This would be the first time in the fund’s history that such a surcharge would be enacted and it would result in every employer in the state being taxed, on average, an additional $110 per employee for each year.

That’s on top of an average $36 per employee hike in the same tax that kicked in on Jan. 1, making for a total increase in the employer tax of nearly 60 percent in 24 months.

State officials and lobbyists said a combination of the slow economy and recently enacted unemployment benefit hikes is to blame for the rapid depletion of the unemployment insurance trust fund.

In January, the state’s unemployment rate was 6.5 percent, down from a revised 6.9 percent for December, but up slightly from 6.4 percent the year before. Los Angeles County’s January unemployment rate was 6.6 percent.

While the jobless rate is far below the levels seen during the last recession, there is increasing concern the economic slowdown could drag on through next year. Last week’s UCLA economic forecast projected only 0.7 percent job growth statewide through 2003 and a similarly meager level of job growth for 2004.

According to the forecast, government job cutbacks from the state budget deficit and the anticipated impact from the looming war with Iraq are likely to be major drags.

Triple hit

The annual benefit hikes, passed by the state Legislature in 2001, take the maximum weekly unemployment benefit from $230 as of December 2001 to the current level of $370 and $450 by Jan. 1, 2005. At the time they were enacted, employer groups bitterly opposed the hikes, saying they would deplete the trust fund.

The hikes started taking effect as the state’s economy was reeling from the dot-com collapse and the Sept. 11, 2001 terrorist attacks. As the economy slowed, more people were laid off and filed unemployment claims that have to be paid out of the unemployment insurance trust fund. What’s more, last year the Legislature passed a bill making the unemployment benefit hikes retroactive to Sept. 11, creating a one-time $500 million hit to the fund.

According to the forecast from the California Employment Development Department, the trust fund has fallen from $5.8 billion as of last June 30 to an estimated $3.7 billion this past Dec. 31. That prompted the automatic trigger of the $36 per employee per year hike in the unemployment insurance tax paid by employers.

The Feb. 27 report further projects the fund balance will drop to $1.7 billion by the end of this year. That would be less than 0.6 percent of the total wages and salaries paid in the state, the level at which the 15 percent “emergency solvency surcharge” is automatically triggered.

Even after this emergency injection of employer dollars, the report finds that the fund balance is expected to remain at $1.7 billion as it absorbs the next unemployment benefit hike. If that’s the case, the emergency solvency surcharge would be triggered once again in January 2005, creating that second $1 10 per employee charge for businesses.

“Given the current projections, we don’t see the fund recovering at all in the near future,” said Carol Evans, vice president of the California Taxpayers Association. “We could be staying on this emergency surcharge for at least the next three or four years, which means that every year, employers would be hit with higher taxes.”

Lobbying increases

To avoid these increases, employer groups and the California Taxpayers Association are lobbying for a freeze on unemployment benefit levels until the fund builds back a reserve margin of at least $4 billion. That would shelve the remaining two unemployment benefit hikes.

But that proposal is meeting stiff resistance from the Democrat-controlled Legislature and is not likely to make it out of committee.

“A freeze is like kicking the unemployed workers when they are down, and under no circumstances will I ever support it,” said Richard Alarcon, chair of the Senate Labor and Industrial Relations committee. Alarcon carried the unemployment benefit increase bill during the 2001 session; a bill to postpone those benefit increases would have to pass his committee.

Alarcon said the hikes in unemployment benefits would serve to stimulate the economy. “The unemployed spend every dime of that unemployment benefit, which puts that extra money back into the economy.”

Attacking fraud

With a freeze on the benefit hikes looking unlikely, employer groups are pursuing another tack: lobbying to enact reforms that would cut fraud and abuse. Julianne Broyles, a lobbyist with the California Chamber of Commerce, said fraudulent claims and overpayments on legitimate claims cost $600 million a year.

Ever thought about what would happen if your insurance carrier went bankrupt? It’s not impossible. Insurance companies are businesses–and like any business, it’s not unheard of for them to face financial difficulties, including insolvency. Policyholders need to pay attention and react swiftly to protect their companies.

Here’s what happens when an insurance company goes bankrupt. A public notice is issued, and the carrier also notifies policy-holders, says Holly Bakke, commissioner of the New Jersey Department of Banking and Insurance and chair of the National Association of Insurance Commissioner s’ Insolvency Task Force.

“There is a national system of guarantee funds that provides a safety net for policyholders,” says Bakke. Particulars differ by state, but essentially, the guarantee fund pays some pending claims–typical]y up to $300,000, but not all types of claims are covered–refunds unearned premiums, and provides shortterm coverage while you seek replacement insurance.

Bakke says that with the insolvency notice, you’ll also receive a set of instructions. It’s important to follow those instructions promptly and completely, especially if you have a claim you haven’t filed yet. And don’t delay your search for new coverage; the period during which the guarantee fund will protect you varies by state, but it’s not a lot of time.

The best way to guard against a bankrupt insurance carrier is to buy your coverage from financially sound, well managed companies. Bakke says your insurance agent should provide you with this reformation, as well as an explanation of how your state’s guarantee fund works. “Your agent should be educating you on this issue long before it ever becomes an issue,” says Bakke. And let’s hope it never does.