New inroads into Canadian market – La Capitale acquires Ontario-based York Fire & Casualty Insurance

QUEBEC CITY, Aug. 25, 2008 – La Capitale General Insurance Inc., member company of La Capitale Financial Group Inc., is pleased to announce today that it has entered into a definitive agreement to acquire Ontario-based general insurer York Fire & Casualty Insurance Company (“York Fire & Casualty”). A subsidiary of Kingsway Financial Services Inc., York Fire & Casualty provides home, auto and commercial insurance products through an extensive network of over 200 insurance brokers operating from more than 350 offices located throughout Ontario and Alberta. Established in 1955, York Fire & Casualty employs more than 150 people, has its head office in Mississauga, Ontario, and generated $122 million in written premiums in 2007.

“It goes without saying that this acquisition will form a solid base for our strategic business development in the general insurance market across Canada”, explains Robert St-Denis, President and Chief Operating Officer of La Capitale Financial Group Inc. and La Capitale Civil Service Insurer Inc.

“For La Capitale General Insurance, the attraction of this transaction lies chiefly in the access it provides to a major brokerage network that is already well-established in Ontario and Alberta. In future years, we intend to capitalize on the strength of this existing network by putting into place all of the support and resources necessary to expand it further and enhancing products and services”, says John Strome, President and Chief Operating Officer of La Capitale General Insurance Inc.

“La Capitale Mutual members can be proud of the drive and vitality the financial group has shown in recent years. This acquisition will be a true catalyst for the growth of the entire financial group, as well as consolidating its financial soundness and enabling the assets of our Mutual members to flourish”, explains Jean-Yves Dupéré, Chairman of the Board and Chief Executive Officer of La Capitale Civil Service Mutual.

The acquisition of York Fire and Casualty is the Group’s second acquisition in Ontario in two years. In 2006, La Capitale Civil Service Insurer Inc. announced its acquisition of Penncorp Life Insurance Company, a specialty accident and disability insurance provider.

BMO Capital Markets acted as exclusive financial advisor to La Capitale Financial Group. The transaction is anticipated to be completed in 2008, subject to regulatory approval.

About La Capitale

La Capitale Civil Service Mutual, owned by members of Quebec’s civil service, owns and operates ten subsidiaries through La Capitale Financial Group. It has provided clients and Mutual members with value-added financial products for over 65 years. With a strong presence across Quebec, and, since 2006, increasingly present throughout Canada, La Capitale Financial Group has $2.8 billion in assets, employs over 2,226 people and provides financial products and services to the general public as well as to 600,000 members working for over 900 institutions in the Quebec public and parapublic sectors.

Its subsidiary La Capitale General Insurance Inc. is experiencing impressive growth and now ranks among the five largest property and casualty insurers in Quebec. Including its wholly-owned brokerage distribution subsidiary L’Unique General Insurance, La Capitale General Insurance generates some $472 million in written premiums and employs nearly 1,000 individuals across Quebec, making the company an industry leader in property and casualty insurance.