APCAPITAL TO GET $13.5 MILLION FOR COMMUTATION WITH GERLING:

East Lansing, Mich.-based medical liability insurer American Physicians Capital Inc. announced the commutation of its reinsurance agreements with Gerling Global Reinsurance Corporation of America. Under the commutation, APCapital will receive a cash payment of approximately $13.5 million in exchange for releasing Gerling from its outstanding reinsurance obligations. As of March 31, 2004, APCapital had reinsurance recoverables from Gerling totaling approximately $17 million, net of ceded reinsurance premiums payable. As a result of the commutation, APCapital will incur a pre-tax charge of approximately $3.6 million in the second quarter of 2004 and will no longer reflect a reinsurance recoverable from Gerling on its balance sheet. In 2002, Gerling’s parent put Gerling’s U.S. subsidiary into runoff, resulting in a series of A.M. Best downgrades for Gerling. While Gerling has continued to meet its financial obligations to APCapital to date, the Company believed there was a higher degree of risk that Gerling would not be able to maintain future payments based on a review of Gerling’s most recently available financial information. According to Gerling management’s discussion and analysis from their 2003 and 2002 annual statutory statements, Gerling’s surplus decreased from $523 million at year-end 2001 to $71 million at year-end 2003.