October 16, 2006

The West Virginia Insurance Guaranty Association (WVIGA) has now received the unearned premium data on West Virginia policyholders which sets out the Shelby Casualty unearned premium amounts payable to those individual policyholders.

Unearned premium is the remaining portion of the premium paid to Shelby Casualty that was not used to provide coverage to you as a result of the cancellation of your Shelby Casualty insurance policy. All Shelby Casualty policies were cancelled by court order as of August 24, 2006, unless cancellation, replacement, or termination occurred prior to that date.

Unearned premium claims are payable by the WVIGA, subject to a statutory deductible of $100. If the total Shelby Casualty unearned premium claim exceeds $100, then the amount of the Shelby claim that exceeds $100 will be paid by the WVIGA. If the Shelby Casualty unearned premium amount is less than $100, no amount will be payable by the WVIGA. The amounts below $100 will remain as a claim against the Shelby Casualty liquidator, and information on how to file those claims will be provided at a later date.

Starting on October 16, the WVIGA will begin mailing claim forms to those policyholders who have unearned premium claims payable by the WVIGA. Because of the large volume of these claims, it will take approximately two weeks to get all of the forms mailed. Policyholders who agree with the amounts shown as payable on their forms will simply need to sign the form and return it to us in an enclosed envelope. When we receive the signed form, we will mail a check to the policyholder for the amount shown payable by the WVIGA. Please allow time for processing and mailing, but checks should be mailed within 3-7 business days after our receipt of the signed form. The form will contain a place to make any address corrections that are needed.

Policyholders whose claims are not payable by the WVIGA (because they are less than $100) will receive a separate mailing at a later date setting out the amount of the Shelby Casualty unearned premium that is due, in order to assist such policyholders in filing a claim with the Shelby liquidator.

If you know that Shelby Casualty does not have your current correct address, you may want to visit the liquidator’s website at www.sdrtx.com to get contact information to inform them of your address change. We received your address from Shelby, so they will need any address corrections both for us to contact you in the future and for them to mail any future correspondence about your claim for amounts under $100 or your claim for our $100 statutory deductible. If you send address corrections directly to us on your claim form, we will pass those along to the liquidator.

If you have not heard from the WVIGA within the next month about any unearned premium claim you believe is payable by the WVIGA (amounts over $100), please contact our office so that we can make further inquiries about your claim.

Claims for premiums paid by anyone for policies that were to renew after August 24, 2006, but which were not renewed because of the liquidation of Shelby, will be refunded in full by Shelby Casualty directly to the policyholders. No deductible will apply. These claims are not payable by WVIGA.