Munich Re America HealthCare and Cairnstone Solidify Relationship Through Purchase Agreement

Business Wire, August 20, 2007

PRINCETON, N.J. -- Munich Reinsurance America, Inc., through its operating division, Munich Re America HealthCare, has entered into a definitive merger agreement with Cairnstone, Inc. - an industry leader in employer stop loss insurance. The transaction is expected to close in September.

"We are very excited about our ownership of Cairnstone," said Bob Trainer, President of Munich Re America HealthCare. "We view this as an excellent strategic fit and are looking forward to significant growth opportunities. This demonstrates our commitment and desire to expand our leadership position in this market." "This acquisition fits perfectly with the Munich Re Group's International Health strategy," said Dr. Wolfgang Strassl, Member of the Board of Management of Munich Re. "It further demonstrates our commitment to the U.S. healthcare market." With this transaction Munich Reinsurance America, Inc. increases its ownership in Cairnstone from 25% to 100%. Cairnstone will keep its name and continue to operate independently with its core management team in place.

"This is great news for Cairnstone," said President and CEO of Cairnstone, Jim Tillett. "We have built an incredible partnership with Munich Re America HealthCare over the past ten years that has resulted in consistent value, extraordinary service, and financial stability for our clients. We are excited about the many additional benefits that we will be able to bring to our clients as a result of this transaction."

Cairnstone, Inc. has been in the employer stop loss business since 1996 and manages over $80 million of employer stop loss business. Stop loss insurance helps self-insured employers manage the risk of funding their employees' healthcare cost.

About Munich Re America HealthCare

Munich Re America HealthCare, one of the nation's largest providers of healthcare risk management solutions, is a division of Munich Reinsurance America, Inc., a member of the Munich Re Group, which has an estimated $35 billion in surplus. The Munich Re Group, whose business also includes primary insurance and asset management, has a preeminent position in the global reinsurance industry.

For more information about Munich Re America HealthCare, please visit http://www.mrahc.com.

About Cairnstone

Founded in 1996, Cairnstone manages employer stop-loss insurance programs and provides catastrophic claims management assistance to hundreds of self-funded employer groups nationwide. Cairnstone is also a leading producer of catastrophic medical coverage to hospital and physician groups. The company has agreements with several leading insurance carriers to market, underwrite and manage those excess loss programs. In addition to its headquarters in Miami, Cairnstone has offices in nine cities across the country.

For more information about Cairnstone, please visit http://www.cairnstone.com.