A.M. Best Places Lyndon Life Under Review Following Announcement of Planned Acquisition.

OLDWICK, N.J.--(BUSINESS WIRE)--August 15, 1997--A.M. Best Co. has placed the "B++" (Very Good) ratings of the Lyndon insurance companies under review with developing implications. This action follows today's announcement that ACCEL International Corp. has reached an agreement in principle to sell its auto after-market products group and the stock of its subsidiary Acceleration Life Insurance Co. to Frontier Insurance Group, Inc. for an undisclosed price. The purchase will be funded equally by the existing cash of Frontier Insurance Group, Inc. -derived from its recently completed $130 million equity offering- and the existing capital of its subsidiary, Lyndon Life Insurance Co.

The Lyndon companies, which were acquired by Frontier Insurance Group, Inc. in June, include Lyndon Property Insurance Co., Lyndon Life Insurance Co. and Gulfco Life Insurance Co.. In addition, the "B-" (Fair) rating of ACCEL's subsidiary Acceleration Life Insurance Co. has been placed under review with positive implications, and the "B" (Fair) rating of Acceleration National Insurance Co. was placed under review with developing implications.

A.M. Best will review the effects that the transaction will have on the capital positions of Lyndon Property and Lyndon Life. Potential benefits of the acquisition include: access to an additional distribution source, the expansion of the auto warranty, credit life and disability lines of business, and cost savings opportunities.

The review status of Acceleration National Insurance Co. reflects the company's significantly changing business mix as well as the potential for reducing holding company leverage as a result of the transaction. Historically, the company has written insurance on extended service contracts, errors and omissions liability for real estate brokers, vendors single interest (automobile physical damage), surety, farm owners and other general liability coverages. It has since discontinued all these lines except insurance on extended service contracts. In 1996, the company began writing long haul trucking and charter buses, which has developed into a major line for the company. As part of the agreement with Frontier, Acceleration National will transfer its auto warranty business to Lyndon Property Insurance Co.

The review of the individual companies will conclude upon the expected close of the transaction during the fourth quarter of 1997. The closing is subject to due diligence and regulatory approvals.

A.M. Best Co., established in 1899, is America's oldest and most widely recognized insurance rating and information source.

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