The Seibels Bruce Group Discloses SCDOI Order

The Seibels Bruce Group, Inc., has received an Order Imposing Administrative Supervision and Appointing Supervisor from the South Carolina Department of Insurance (SCDOI).

The Order places three Seibels Bruce subsidiaries, South Carolina Insurance Company (SCIC), Catawba Insurance Company (CIC) and Consolidated American Insurance Company (CAIC), under administrative supervision for at least six months due to a dispute, which is currently in litigation, regarding a business agreement between the company, SCIC and CAIC and Human Dynamics Corporation (HDC) in Arizona and California. The Director of the SCDOI ordered SCIC, CIC and CAIC to immediately cease writing risk-bearing business and ordered SCIC and CAIC to immediately cease renewal of existing risk-bearing business. The company will work with the SCDOI on a plan of operation under which the company can request authority to write renewals.

SCIC, CAIC and CIC’s primary line of risk-bearing business is commercial insurance. As of June 30, 2002, and Dec. 31, 2001, the company has written $7.6 million and $12.6 million respectively of commercial insurance, which provides approximately 21 percent and 15 percent respectively of the company’s revenues.

As previously disclosed in the company’s filings with the Securities and Exchange Commission, the company is currently contesting a decision by an Arizona court regarding its dispute with HDC. The company is also evaluating the regulatory impact of the Order.

“We do not believe the Order will affect the company’s performance in its service businesses, which comprise the majority of Seibels Bruce’s revenue and income, and we hope that the suspension of our risk-bearing writings will be brief,” Jack Natili, president and CEO, said. “We have strong businesses in flood insurance; in our claim handling operations; and in our North Carolina-based nonstandard automobile insurance operation.”