Class Action Filed in New York Against Frontier

August 7, 2000

A class action lawsuit was filed in the U.S. District Court for the Southern District of New York on behalf of all individuals who purchased Frontier Insurance Group Inc. securities during the Class Period, between August 5, 1997 and April 14, 2000 inclusive.

The complaint contains allegations that Frontier and certain of its officers and directors issued a series of material misrepresentations to the market during the Class Period, thereby artificially inflating the price of its common stock in violation of federal securities laws. Such alleged misrepresentations include an announcement that Frontier expected to boost the scope of its medical malpractice business through the acquisition of Western Indemnity Insurance Company.

Frontier revised its previously reported 1999 results on April 14, after which its stock closed at $1 per share, a more than 90 percent drop from the Class Period high of $38.6875 per share. Representing investors in the case is the law firm of Cauley & Geller LLP.

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