Centris Group Signs Definitive Agreement to Sell USF RE to Folksamerica.

COSTA MESA, Calif.--(BUSINESS WIRE)--April 1, 1999--The Centris Group Inc. (NYSE:CGE), a leading provider of domestic and international medical and specialty insurance lines, Thursday announced that the company has signed a definitive agreement for the sale of USF RE INSURANCE COMPANY to Folksamerica Holding Co. Inc.

Under the definitive agreement the purchase price to be paid will be $92.5 million, an amount that approximates the statutory book value of USF RE, composed of $71.7 million of cash and a 5-year interest bearing note for $20.8 million, which can be adjusted downward for adverse development on USF RE loss reserves carried at Dec. 31, 1998.

Centris had previously announced that it expected a purchase price of $97.5 million, of which $77.5 million would be in cash and the balance in a note. The reduction in purchase price is due to the decrease in USF RE's surplus attributable to reserve strengthening and the impact of an anticipated loss of $3.0 million from the January 1999 Colombian earthquake.

Other terms of the transaction were not disclosed. The acquisition is expected to close following receipt of regulatory approvals which Centris believes can be obtained within 60 to 90 days.

Centris Chairman and Chief Executive Officer David L. Cargile commented: "The disposition of USF RE will give Centris a 'fresh start' with its risk assumption business. The purchaser will assume the property/casualty business, along with its reserves, as of Dec. 31, 1998. The medical business written prior to Dec. 31, 1998, along with the reserves will also be assumed on a run-off basis.

"Our medical lines business will be written from Jan. 1, 1999 onward in our two newly acquired insurance companies. We have transformed Centris from a specialized property/casualty company handling both medical lines and property/casualty reinsurance, to a specialty medical lines company focused on medical and related niche markets.

"The sale of USF RE will allow us to concentrate our capital as well as our management efforts on growing our core operations in the medical lines and specialty accident and health field. We believe that such a renewed focus will enable us to generate higher returns by maximizing the use of our capital base while leveraging our company's underwriting expertise and proprietary databases.

"The 1998 hurricane season, the second worst on record, delayed our progress in selling USF RE by several months, but we believe we are now properly structured to take advantage of the many exciting opportunities developing in our core business."

The Centris Group operates complementary businesses based on its expertise in the handling of specialized risk. It is a market leader in medical stop-loss coverages that produce revenues from both premiums and fees.

Centris is also a provider of property/casualty reinsurance, excess and surplus lines insurance, special risk accident and health insurance products and reinsurance intermediary services. Other specialized risk operations include claim review, premium and claim auditing, medical technology and treatment assessment, and runoff management.

Among the most highly rated companies in its markets, The Centris Group conducts business both nationally and internationally through USBenefits Insurance Services Inc., INTERRA Inc., USF RE INSURANCE COMPANY, USF Insurance Co., Seaboard Life Insurance Co. (USA) and VASA North America Inc. and its subsidiaries.

Centris' insurance operations are rated "A" and "A-" (Excellent) by A.M. Best Co. and USF RE is assigned a claims paying ability rating of Aq (Good) by Standard & Poor's.

For more information on The Centris Group via facsimile at no cost, call 800/PRO-INFO and dial client code "CGE" or visit the company's Web site at www.thecentrisgroup.com.

Forward-Looking Statements 

Some of the statements included within this release that are not historical facts may be considered to be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, and are intended to be covered by the safe harbor provisions created in such Acts. Investors are cautioned that all such forward-looking statements are subject to certain risks and uncertainties that could cause the actual results to differ materially from those suggested by such statements. Such risks and uncertainties included, but are not limited to the following: natural disasters or other catastrophic losses or a material aggregation of such losses in the company's insurance lines; changes in federal or state law affecting an employer's ability to self-insure or other adverse regulatory changes; the adequacy of the company's reinsurance program; general economic conditions in this country or abroad; adverse developments in the securities markets and their impact on the company's investment portfolio; the effects of competitive market pressures within the medical lines or property/casualty marketplaces; the effect of changes required by generally accepted accounting practices or statutory accounting practices; and other risks that are described from time to time in the company's filings with the Securities and Exchange Commission. The words "believes," "anticipates," "expects" and similar expressions are intended to identify forward-looking statements. Although the company believes that the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could prove to be inaccurate and, therefore there can be no assurance that such forward-looking statements will themselves prove to be accurate. In the light of the significant uncertainties inherent in the forward-looking statements, the inclusion of such information should not be regarded as a representation by the company or by any other person that the objective and plans of the company will be achieved.