GALLANT AND VALOR INSURANCE COMPANIES INSOLVENT, APPEAL DISMISSED

Chicago, IL -- Acting Illinois Insurance Director Arnold Dutcher announced today that he obtained an Agreed of Order entered by the Circuit Court of Cook County, Illinois on March 13, 2003 which contains a Finding of Insolvency for both Gallant and Valor Insurance companies, and requires both companies to dismiss their pending appeal of the court's August 9, 2002 Order of Liquidation. The Appeal was dismissed on March 27, 2003.

On February 25, 2002, an Order of Conservation was entered against both Gallant and Valor Insurance Companies, following the Department of Insurance's determination that Gallant was insolvent by more than $21 million, and Valor by more than $15 million.

An Order of Liquidation was entered by the Circuit Court of Cook County, Illinois against Valor and Gallant on August 9, 2002 subject to a 14-day stay until August 23, 2002. The order was entered on the Director's motion for judgment on the pleadings which was granted by the Circuit Court on August 7, 2002 based on a duly authorized Consent to Liquidation executed by the companies' board of directors which the owner subsequently refused to honor. On August 14, 2002, the companies filed a Notice of Appeal of the Order of Liquidation.

As a result of the dismissal of the Appeal, the Illinois and Indiana Insurance Guaranty Funds will now be able to provide statutory coverage to policyholders and other claimants for covered claims arising out of the liquidation of both companies.

Acting Director Dutcher cautioned that due to the number of pending claims against the companies that it will take a period of time to see that all open claim files are sent to the respective guaranty funds. There are approximately 18,000 claims currently pending against both companies.

The Liquidation Order contains an injunction prohibiting suits against Gallant or Valor outside of the liquidation proceedings.

The 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.