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Clarendon: No major impact of Stirling Cooke court ruling

Hannover, 11 July 2003:

On Tuesday, July 8th 2003 the British Commercial Court in London released a judgement in the ‘Sphere Drake vs. Stirling Cooke’ litigation ruling in favour of Sphere Drake. There has been speculation that this ruling might have a major impact on our New York subsidiary, Clarendon Insurance Group.

We therefore wish to clarify that the worst-case scenario of this judgement is in the order of USD 15 million. This amount would be recovered from the prior shareholders. They have guaranteed the validity and enforceability of all relevant reinsurance agreements in the stock purchase agreement and have provided sufficient collateral for such guarantee.