AmerInst Authorizes Share Dividend, Rights Offering.

HAMILTON, Bermuda -- The Board of Directors of the AmerInst Insurance Group, Ltd., a provider of reinsurance protection for CPA firms, announced today that it has authorized a share dividend of two shares for each one share outstanding, as described in the Proxy Statement for the Company's 2006 Annual General Meeting. The Board also authorized a rights offering to existing shareholders to be completed after the share dividend is effective. The current anticipated terms of the rights offering are as follows:

--The rights offering will be subject to shareholder approval of the proposed increase in the Company's authorized shares and completion of the share dividend.

--Each shareholder of record on April 2, 2006 of outstanding common shares of AmerInst will receive non-transferable rights to purchase one additional common share for each share currently owned.

--Shareholders will be entitled to exercise their rights in whole or in part.

--While a final per share exercise price has not yet been determined, AmerInst expects it to be based on the price paid in the 2005 tender offer, increased to reflect the net increase in book value of common shares since the tender offer. On a pre-share dividend basis, the offering price is expected to be about $70 per share (or approximately $23 per share after giving effect to the share dividend).

--If the rights offering is not fully subscribed initially, shareholders who have exercised their rights will have the opportunity, on a pro rata basis, to purchase the unsubscribed shares.

--The first shares sold pursuant to the rights will be those currently owned by the Company's indirect subsidiary, AmerInst Investment Company, Ltd. ("Investco"), which currently owns 106,652 shares. If the rights offering is fully subscribed, Investco would no longer own any shares of the Company. If more shares are subscribed for than are owned by Investco, those additional shares will be newly issued by the Company.

In addition to the exercise price, other important matters relating to the rights offering have not been finalized as of the date of this press release, including the date of the initial offering, the expiration date of the rights offering and the procedures relating to the purchase of initially unsubscribed shares.

This press release is neither an offer to sell nor a solicitation of an offer to buy any of the securities described herein.

As part of the distribution of rights, AmerInst intends to file a registration statement on Form S-3 with the United States Securities and Exchange Commission (SEC) for the purpose of registering the shares of common stock underlying the rights to purchase common shares. Once the registration statement has been declared effective, AmerInst will distribute to each shareholder a copy of the related prospectus. Please be advised that this press release only provides notice of the rights offering and that the rights offering will be made only by means of the prospectus, once the registration statement is declared effective by the SEC. The Company has not yet determined when it will commence the rights offering but expects to file the registration statement during May 2006. The rights offering cannot be commenced unless and until the SEC has declared that registration statement to be effective.

Any questions concerning the proposed rights offer can be directed to Ronald Katch (847-446-3700).

About AmerInst

AmerInst was formed in 1988 with the mission to provide direct insurance coverage for CPAs. The Company was originally created to write direct insurance business and later shifted its focus to the re-insurance market. If primary insurance markets continue to harden, the Company stands ready to directly underwrite primary coverage up to $1,000,000 for its shareholders or other CPA firms that might seek primary malpractice coverage. The Company currently provides reinsurance protection for approximately 24,000 insured CPA firms that are located throughout the United States. In 2001, the Company was re-domesticated to Bermuda, in order to enhance its ability to provide services to its stakeholders and the long-term benefit of its shareholders.

Forward-Looking Statements 

This press release contains statements that may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future and, accordingly, such results may differ from those expressed in any forward-looking statements made herein. Those risks and uncertainties include, but are not limited to, risks relating to the potential instability or unprofitability of the market we participate in, our dependence on primary insurers, the potential lack of available reinsurance, changes in domestic or global economic conditions and changes in federal or state tax laws or the administration of such laws.