Warrantech Settles $20 Million Litigation With ACE Property and Casualty Insurance Company; Company Reaches Agreement on all Outstanding Claims

    BEDFORD, Texas--May 7, 2003--Warrantech Corporation (OTCBB:WTEC), a leading independent provider of service contracts and after-market warranties, today announced that an agreement has been reached with ACE Property and Casualty Insurance Company (ACE) to resolve all outstanding claims and disputes arising out of all business previously insured by ACE.
    "We are very pleased that negotiations resulted in a mutually agreeable settlement between Warrantech and ACE and that no monetary consideration was paid by either party," said Joel San Antonio, chairman and chief executive officer.
    The terms of the agreement call for each party to give a general release of all claims, whether presently existing or arising at any time in the future. The release is a dismissal of all pending arbitrations and litigations between the parties which specifically includes lawsuits entitled, In the Matter of Arbitration Between Ace Property and Casualty Inc. Co. f/k/a CIGNA Property And Casualty Ins. Co. vs. Warrantech Corporation, et al. currently pending in Philadelphia, Pennsylvania, and a lawsuit entitled Warrantech Consumer Product Services, et al. vs. ACE Property and Casualty Ins. Co., et al. in the District Court for the Central District of California. To resolve certain ancillary disputes that resulted from the primary lawsuit, the terms of the agreement call for Warrantech and ACE to make payments to a small number of third party service providers, the largest of which is BancTec, Inc. Warrantech does not expect to have any material financial adverse impact as a result of these service provider payments.

    About Warrantech:

    Warrantech Corporation administers and markets service contracts and after-market warranties on automobiles, automotive components, recreational vehicles, appliances, consumer electronics, homes, computer and computer peripherals for retailers, distributors and manufacturers. The company continues to expand its domestic and global penetration, and now provides its services in the United States, Canada, Puerto Rico and Latin America. For additional information on Warrantech, access www.warrantech.com.

    "Safe Harbor" statement under the Private Securities Litigation Reform Act of 1995:

    This release contains forward-looking statements that are subject to risks and uncertainties. Other risks and uncertainties include but are not limited to, the effectiveness of cost containment measures and the continuation of current levels of business activity, the impact of competitive products, product demand and market-acceptance risks, reliance on key strategic alliances, fluctuations in operating results and cash flow and other risks detailed from time to time in the company's filings with the Securities and Exchange Commission. These risks could cause the company's actual results for the current fiscal year and beyond to differ materially from those expressed in any forward looking statements made by, or on behalf of, the company.