GNU Agrees to Eventual Acquisition by PAULA Financial

June 18, 2001

PAULA Financial and Great Northern Underwriters (GNU) of Portland, Ore., have agreed to terms that allow for PAULA to acquire GNU at a future date.

The two companies have arranged a strategic collaboration in which GNU will incorporate PAULA underwriting personnel into the GNU operation. Under GNU management, PAULA personnel will provide exclusive managing underwriter services for PAULA in the Pacific Northwest.

“We believe that the business development capabilities of GNU in combination with PAULA’s underwriting and distribution relationships will produce a highly profitable and highly effective Northwest regional presence for both entities,” stated PAULA Financial Chairman and CEO Jeff Snider. “Looking further out, the end game is to consolidate the two companies. Joining the operations at the beginning by way of a service agreement will provide for a seamless integration of the cultures and operations in time.”

PAULA is a California-based specialty underwriter and distributor of commercial insurance products, which, through its subsidiary, PAULA Insurance Company, is one of the largest underwriters specializing in workers’ compensation insurance products and services for the agribusiness industry.

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