Alliance General Insurance Company Liquidated

CHICAGO -- Alliance General Insurance Company of Chicago, Illinois, was declared insolvent and placed under an Agreed Order of Liquidation on January 7, 2000. The Cook County Circuit Court granted Illinois Insurance Director Nathaniel S. Shapo's petition based on the Department of Insurance's finding that the company's policyholder surplus was impaired by over $3 million.

Alliance General's most recent financial statement reflected approximately $13.7 million in direct as well as assumed reinsurance premiums for the period ending December 31, 1998. The company has not written any new direct business since the third quarter of 1998. On a licensed basis in Illinois and on an excess and surplus line basis in 39 other states, as well as the Virgin Islands, the company wrote commercial liability and property coverages primarily focused in commercial package policies for small businesses and product liability exposure.

A wholly owned subsidiary of Alliance Insurance Group, Inc., the company was incorporated in 1984 and began business on January 1, 1985.

The Illinois Insurance Guaranty Fund will be responsible for the covered claims of Illinois policyholders. The Agreed Order of Liquidation contains an injunction prohibiting suits against Alliance General outside of the liquidation proceedings. Liquidation proceedings are being handled, on behalf of the Director of Insurance, by the Office of the Special Deputy Receiver, 222 Merchandise Mart Plaza, Suite 1450, Chicago, Illinois 60654; (312) 836-9500.