WESTERN SPECIALTY INSURANCE COMPANY ORDERED INTO LIQUIDATION

Chicago, IL -- Illinois Insurance Director Nat Shapo announced today that the Cook County Circuit Court issued an Order of Liquidation against Western Specialty Insurance Company of Oak Brook, Illinois, on May 6, 2002, following a determination by the Department of Insurance that the company's surplus was impaired by an amount in excess of $1 million, and at the request of the company's board of directors.

Western Specialty is a wholly owned subsidiary of Western Holdings Incorporated. The company was originally incorporated in April 1986 as Oak Brook Property and Casualty Insurance Company, a wholly owned subsidiary of First Oak Brook Corporation Syndicate, which was placed into liquidation in 1996. The current name was adopted upon the sale of a majority interest in the company to current ownership in 1996.

The company is licensed in two states (California and Illinois) but operated on a surplus lines or non-admitted basis in seven additional states, concentrating its writings primarily in commercial multiple peril, workers compensation, other liability, and private passenger automobile coverages. At December 31, 2001, the company reported gross written premium of approximately $7,500,000.

Any active business in the state in which the company was licensed will be canceled thirty-one (31) days from the date of the entry of the Order of Liquidation, on the policy's expiration date, or when requested by the named insured, whichever occurs first. All other active policies in any other jurisdiction were canceled upon the entry of the Order of Liquidation.

The Order of Liquidation contains an injunction prohibiting suits against Western Specialty 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.