Southwest Reinsure, Inc. Announces Merger Agreement with Dealers Alliance Corporation

ALBUQUERQUE, N.M., Aug. 29, 2003 -- Southwest Reinsure, Inc., an innovator in customized automobile dealer finance and insurance profit building programs, announced today a merger agreement with Dealers Alliance Corporation, Columbus, Ohio. Through affiliated companies, Southwest Reinsure, Inc. (Southwest Re), issues and administers automobile service contracts sold by more than 1,500 automobile dealers nationwide. The acquisition of Dealers Alliance Corporation, which is the parent company of Dealers Assurance Company, a property and casualty insurance company licensed in forty-one states and the District of Columbia, combines the resources of Southwest Re with a recognized insurer of automobile service contracts and other automobile related products. Organized in 1935 and rated A- (Excellent) by A.M. Best Company, Dealers Assurance Company has insured both proprietary and private label automobile service contract programs for more than twenty years under the guidance of its President, Robert L. Ratchford, formerly the Director of Insurance for the State of Ohio. Mr. Ratchford has agreed to continue serving in his present capacity after the close, and the principals of Southwest Re have indicated that the company will remain an Ohio-domiciled company.

In announcing the merger, James B. Smith, Chief Executive Officer of Southwest Re, said, "Our acquisition of Dealers Assurance Company provides us with the ability to deliver to our dealers and agents the financial strength of a quality, admitted carrier to underwrite our service contract programs. It will also enable us to expand our product base while confronting the challenges faced by service contract providers in today's marketplace." Southwest Re has organized Southwest Re Holdings, Inc., a Delaware corporation, to consummate the merger for an undisclosed amount of cash consideration. The merger, which is subject to regulatory approval in Ohio, is expected to close by the end of October 2003.