CENTAUR INSURANCE CO. SETTLES DISPUTES WITH MISSION INSURANCE GROUP

Chicago, IL - Illinois Acting Insurance Director Arnold Dutcher announced today the settlement of litigation and arbitration between Illinois-based Centaur Insurance Company, in rehabilitation, and five insolvent insurers making up the Mission Insurance Group, based in California and Missouri. Terms of the agreement, which also settles disputes involving Mission and Centaur's corporate parent, Chicago-based Borg-Warner Security Corporation, include the approval of a $48 million claim by Mission in the Centaur estate and the payment of $4 million to Mission by Borg-Warner.

The Mission Group, whose members are in liquidation under the control of the Insurance Commissioners of California and Missouri, is Centaur's single largest creditor. An insolvent property and casualty company, Centaur has been operating under the control of the Illinois Insurance Director, subject to the supervision of the Circuit Court of Cook County, since 1987. The Mission Group's claims are based on a series of reinsurance agreements entered into between Centaur and Mission in the 1970s and 1980s.

According to Dutcher, the settlement paves the way for the ultimate resolution of the Centaur rehabilitation proceedings. "In the coming months, we expect to begin actively negotiating with the Centaur policyholder creditors who have filed claims so that the company's remaining liabilities can be

finally determined and its assets distributed to the remaining creditors," Dutcher said. "It may be that a liquidation order and claims bar date will be necessary to deal with any creditors whose claims cannot be settled expeditiously." Although Centaur is insolvent, it has been paying policyholder-level claims under a court approved plan of rehabilitation. Claims of other creditors, including reinsurance claims of other insurance companies, are being settled, but not paid pending resolution of all policyholder claims.

The settlements are subject to the approval of the Cook County Circuit Court, in the rehabilitation proceedings of Centaur, the court overseeing the liquidation proceedings for the Mission Group and the court presiding over the Borg-Warner matter.

Centaur's rehabilitation is being handled by the Director's Office of the Special Deputy, 222 Merchandise Mart Plaza, Chicago, IL 60654; (312) 836-9500.