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AMERICAN RELIANCE GROUP RECEIVES STATE APPROVAL TO TRANSFER NEW JERSEY PERSONAL AUTO INSURANCE BUSINESS TO ITS MUTUAL PARENT

 AMERICAN RELIANCE GROUP RECEIVES STATE APPROVAL TO TRANSFER
 NEW JERSEY PERSONAL AUTO INSURANCE BUSINESS TO ITS MUTUAL PARENT
 LAWRENCEVILLE, N.J., Jan. 22 /PRNewswire/ -- American Reliance Group, Inc. (AMEX: ARI) announced today that the plan to transfer the company's New Jersey personal auto insurance business to its parent mutual company, American Reliance Insurance Company, was approved by the New Jersey Insurance Department, subject to usual and customary administrative conditions, including the licensing of the inactive insurance subsidiary of the company.
 In anticipation of satisfying the administrative conditions of the plan in the first or second quarter of this year, the mutual company acquired the inactive insurance subsidiary of the company with a book value of $4,485,000 in exchange for approximately 320,000 common shares of American Reliance Group at $14 per share. American Reliance Group shares acquired in the transaction will be held in treasury. Book value per share increased by approximately $1 as a result of this transaction.
 Upon consummation of the plan, New Jersey personal auto insurance will be written by the newly acquired subsidiary of the mutual and excluded from the reinsurance pooling arrangement between the mutual and the company. The portion of taxes and assessments from the New Jersey Fair Automobile Insurance Reform Act relating to personal auto insurance also would be borne by this subsidiary of the mutual company. Subject to licensing this inactive insurance company, it will assume through a reinsurance agreement the New Jersey personal auto business and the related FAIRA costs of the company. The reinsurance agreement will be for the period Oct. 1, 1991, to the effective date of the plan.
 The New Jersey personal auto premiums written in 1991 were $10,742,000. The loss ratio for this business has averaged 98 percent for the past three years compared to 66 percent average composite loss ratio for all lines.
 Bruce W. Herrick, chairman and president of American Reliance, said, "We believe eliminating the New Jersey personal auto insurance exposure from our public company should improve our investment value and be a benefit to all of our shareholders."
 American Reliance Group, Inc., a regional property and casualty insurance holding company, specializes in providing insurance coverage for small to medium size businesses and individuals in rural and suburban locations.
 /delval/
 -0- 1/22/92
 /CONTACT: Bruce W. Herrick, chairman and president, or Dennis M. Bandish, senior vp-finance of American Reliance, 609-896-1921/
 (ARI) CO: American Reliance Group, Inc. ST: New Jersey IN: INS SU:


KA-MK -- PH039 -- 2442 01/22/92 15:52 EST
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Publication:PR Newswire
Date:Jan 22, 1992
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