GENEVA ASSURANCE SYNDICATE, INC. ORDERED INTO CONSERVATION

CHICAGO, IL -- Illinois Insurance Director Mark Boozell has obtained an Order of Conservation against Geneva Assurance Syndicate, Inc., a member of the Illinois Insurance Exchange. The order was entered in the Circuit Court of Cook County on May 17, 1996, but has been kept under court seal until today, in order to give the Department of Insurance the opportunity to review the books, records, and other relevant financial data of Geneva.

Geneva, of Concord, California, and Chicago, Illinois, is a wholly owned subsidiary of United Southern Assurance Company (Melbourne, Florida) and JBW & Co., Inc. (Concord, California), which are in turn affiliates of Concord General Corporation (Concord, California).

The action was taken to conserve the assets of the company for the protection of its policyholders and creditors. The order also contains a temporary moratorium upon the payment of all claims and loss adjustment expenses until further order of the court, and an injunction prohibiting suits against Geneva outside of the conservation proceedings. Since entry of the Order of Conservation, which found that Geneva is impaired by an amount in excess of $4,500,000, the Director as Conservator has been conducting a review of Geneva's claims and other pertinent records to determine what further action may be appropriate.

Geneva has been in runoff for approximately one year, at the time management and the Illinois Insurance Exchange, which has the primary statutory responsibility for regulating the syndicates, reached an agreement to cease underwriting. Since that time, the Exchange has been monitoring the activities of Geneva, and subsequently reached the conclusion that Geneva may not have sufficient assets to fully meet its obligations. Pursuant to Illinois statute, the Exchange reported its findings to the Illinois Director, who subsequently concluded that a formal court order was necessary to protect the company's policyholders. Even though the company has been in a runoff mode, it still has a number of policies in force. Director Boozell found it prudent at this time to further petition the court for authorization to make the Conservation Order public, so that active policyholders may assess their coverage situations.

As an underwriting syndicate on the Exchange, Geneva is a member of the Illinois Insurance Exchange Guaranty Fund. The Guaranty Fund is a security mechanism developed by the Exchange and funded by Exchange syndicates to provide an additional layer of protection in the event an Exchange syndicate is declared insolvent. The Guaranty Fund is available to provide between $7.5 million and $15 million coverage, in an amount not to exceed $300,000 per claim, to assist Geneva to meet its obligations to its policyholders in whole or in part.

The conservation proceedings are being handled by the Department's Office of the Special Deputy Receiver, 222 Merchandise Mart Plaza, Suite 1450, Chicago, Illinois 60654; (312) 836-9500.