A.M. Best Places Ratings of Echelon Property & Casualty Insurance Company Under Review with Developing Implications

Business Wire, March 13, 2008

OLDWICK, N.J. -- A.M. Best Co. has placed the financial strength rating of B- (Fair) and the issuer credit rating (ICR) of "bb-"of Echelon Property & Casualty Insurance Company (Echelon P&C) (Chicago, IL) under review with developing implications.

These rating actions follow the recent announcement that Echelon P&C entered into a definitive stock purchase agreement with Lockhart Insurance Holding Company, Ltd. (Lockhart) and the approval of the Form A Statement by the Illinois Division of Insurance. Under the definitive agreement, Lockhart would purchase approximately 83% of Echelon P&C's stock for roughly $4.2 million.

The ratings will remain under review pending the close of the transaction and discussions with management regarding ultimate capitalization plans and Echelon P&C's new business plan. However, should the transaction fail to close within a reasonable period of time, the ratings would be downgraded as surplus at year-end 2007 fell below Illinois' minimum regulatory requirements.

Echelon P&C's surplus declined precipitously during fourth quarter 2007 as a result of loss reserve increases and changes in non-admitted assets, as well as the company's voluntary decision to stop writing any new or renewal business effective September 2007.

For Best's Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings.> Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.