Acceptance Insurance Companies Inc. Announces Revised Credit Agreement and Capital Reallocation.

Business Editors

OMAHA, Neb.--(BUSINESS WIRE)--Dec. 29, 1999

Acceptance Insurance Companies Inc. (NYSE:AIF) today announced that it has entered into a revised credit agreement with Comerica Bank as the new agent bank and U.S. Bank and First National Bank of Omaha as participating banks. The Company said lenders under the new credit facility have provided a $31.4 million Letter of Credit, on a fully collaterallized basis, to secure certain commitments which may arise in future years under one of the Company's crop reinsurance contracts. Company payments of reinsurance premiums for additional coverage in future years will reduce its commitments and the required Letter of Credit; the applicable reinsurance agreement also can be commuted on an annual basis.

In addition, the Company announced the Nebraska Department of Insurance approved repayment of a $20 million surplus note due from one of its insurance company subsidiaries and an investment of $20 million in American Growers Insurance Company, the Company's primary crop insurance company, by one of the Company's property and casualty insurance subsidiaries.

Acceptance also said the recently formed special committee of its Board of Directors determined there is not an immediate need to obtain the $20 to $40 million of additional capital offered by McCarthy Group and Directors representing another major shareholder, but recommended the Board of Directors continue to review the capital requirements of the business as it is restructured.

Michael R. McCarthy, Chairman of the Company, stated, "The revised credit agreement, surplus note payment and transfer of additional capital to our primary crop insurance company have provided for the short term needs of the Company. We are looking forward to continuing to build the profitable segments of our Company." McCarthy also said the Company has initiated an intensive financial and organizational review and added, "We expect this review to provide the foundation for building a balanced specialty property and casualty insurance business generating income from crop operations, other property and casualty insurance operations and from the Company's investment portfolio."

The Company said it is formalizing and implementing the previously announced agreement with Markel Insurance Company related to property and casualty business produced and serviced in its Scottsdale, Arizona office.

Acceptance Insurance is a specialized insurance company providing crop, property and casualty insurance products throughout the United States. American Agrisurance, the Company's wholly owned crop insurance marketing subsidiary, is a widely recognized leader in the crop insurance industry.