American International Group subsidiary makes investment in Alcohol Sensors International.

ISLANDIA, N.Y.--(BUSINESS WIRE)--Dec. 23, 1996--Alcohol Sensors International Ltd. (ASI) (NASDAQ:ASIL), developers and marketers of safety devices that help prevent drinking and driving, today announced that a subsidiary of American International Group Inc. (AIG), has made an investment in ASI.

ASI manufactures the SENS-O-LOCK (TM) Breath Alcohol Ignition Interlock Safety Device which requires a driver to provide an alcohol-safe breath sample prior to starting their vehicle and at random intervals while driving. AIG through a subsidiary has made an investment of $2.5 million in convertible preferred stock of ASI in order to support the company, in its development, manufacturing and distribution efforts.

"AIG is making a significant investment in Alcohol Sensors International to strengthen our financial position and assure adequate marketing support for the launch of a new line of SENS-O-LOCK (TM) Alcohol Specific Technology products commencing in January 1997," stated Robert B. Whitney, ASI President and CEO. "Drinking and driving is a major problem here in the United States and in countries around the world. We are pleased and proud that a major insurer doing business worldwide has recognized the life-saving potential products."

Alcohol Sensors International Ltd., will begin taking orders for their new SENS-O-LOCK AST series products in January at the 1997 Winter Consumer Electronics Show. The new SENS-O-LOCK models feature superior accuracy, freedom from recalibration and Alcohol Specific Technology: detecting and reacting only to ethanol. Sensors used in previous designs, including competitors' products, may be affected by a wide variety of gases, including cigarette smoke, carbon monoxide (vehicle exhaust), gasoline vapors, acetone and other noxious fumes, as well as human ketones misread as high alcohol levels resulting in "false positives." The new AST series products are unaffected by exposure to these gases. Three models will be introduced during the first quarter of 1997, the SENS-O-LOCK 1100 AST, 2100 AST and 3100 AST, designed for the Mandate (court-ordered), Parental (voluntary) and Commercial markets, respectively.

"Our ongoing research and development efforts have led to the development of true breakthrough technology with the introduction of our proprietary alcohol sensor, " Whitney explained. "Because of this superior technology, we anticipate entering the evidentiary market during the second quarter of 1997, with stationary, equipment designed to replace breath alcohol devices currently used in the police stations and specially equipped DWI-vans, as well as high quality hand-held units that will enable an EBT-certified test unit to be carried in every patrol car." ASI is also planning to develop hand-held units for private and commercial use, also anticipated in the 2nd or 3rd quarter of 1997.

"Insurance underwriters around the world recognize the tragedy of drinking and driving accidents, in terms of loss of life, serious injury and billions of dollars in property losses, legal fees and claims." Whitney said. "Driver education, substance abuse classes higher insurance premiums, fines and even the threat of jail have not succeeded in mitigating the drinking and driving problem. In fact, the latest U.S. statistics show an increase. SENS-O-LOCK applies today's advanced technology to the problem, and we believe it is the first practical solution. We welcome AIG's support in helping us market our technology worldwide," Whitney concluded.

American International Group Inc. is the leading U.S.-based international insurance organization and among the nation's largest underwriters of commercial and industrial coverages. Its member Companies write property, casualty, marine, life, and financial services insurance in approximately 130 countries and jurisdictions and are engaged in a range of financial services businesses. American International Group, Inc.'s Common Stock is listed in the New York Stock Exchange, as well as the stock exchanges in London, Paris, Switzerland and Tokyo.

Alcohol Sensors International Ltd. sells and through a network of installation centers, services repairs and installs a line of patent pending SENS-O-LOCK(TM) ignition interlock devices that are designed to detect, evaluate and help prevent an alcohol impaired driver from operating a vehicle equipped with the company's devices. The company's SENS-O-LOCK (TM) products are marketed to the legislative (State) mandated installation market, the corporate fleet market and to individual vehicle owners. Alcohol Sensors International Ltd. develops, licenses and sells safety-related products to the automotive aftermarket industry.

CONTACT: Alcohol Sensors International Ltd.

Dr. Steven A. Martello, 516/342-1515

fax, 516/342-1550