STATES TO LIQUIDATE QUEENSWAY UNIT

February 5, 2001

Queensway Financial Holdings Ltd. said in late January that the Florida and Georgia departments of insurance had both obtained court orders to have Queensway insurance units liquidated. The company is closing down its Queensway Casualty Insurance Company unit in Florida and the International Indemnity Co. in Georgia.

Following this action, Standard & Poor’s revised its financial strength rating on International Indemnity Co. to ‘R” from ‘Bpi’.