Hanover Transfers Discontinued N.J. Business to Proformance

February 21, 2006

The Hanover Insurance Group, Inc. announced that its wholly-owned subsidiary, The Hanover Insurance Company, and some of its affiliates will transfer renewal rights for a block of certain personal lines policies to Proformance Insurance Company, a subsidiary of National Atlantic Holdings Corp . The policies being transferred are part of a segment of The Hanover’s New Jersey personal lines business that was discontinued beginning in 2002.

The insurer said the transaction enables The Hanover to focus its resources on growing its core personal and commercial lines of business in New Jersey, and accelerates the company’s exit from this previously discontinued segment of business.

The transaction does not affect The Hanover’s core personal or commercial lines of business.

Under the agreement, The Hanover will transfer renewal rights for approximately 16,000 policies in its sponsored markets and other previously discontinued businesses. The sponsored markets business consists of policies written through sponsoring groups such as employers and associations. The business being transferred represents less than 20 percent of the personal lines policies Hanover writes in the state, and approximately 1 percent of the company’s business countrywide. The business will transition to Proformance as individual policies come up for renewal.

The agreement has been approved by the New Jersey Department of Banking and Insurance and closed on February 17. Terms of the agreement were not disclosed.

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