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SVO Expected to Restore Valuation of ISO Shares, Says NAMIC

INDIANAPOLIS (Dec. 15, 2004)--Insurance Services Office (ISO) shareholders who have experienced an unexplainable plunge in valuation for that organization's class B shares from the National Association of Insurance Commissioners (NAIC) Securities Valuation Office (SVO), may see their values restored, according to a NAMIC spokesperson.

The plunge-from about $71 at year-end 2003 to about $12 late this year-seems to have no fundamental explanation and has shareholders agog at the unexplainable drop in value.

"What we understand," said William Boyd, NAMIC's financial regulation manager, "is that the SVO analyst valuing the ISO class B shares used a methodology different from that used in 2003. What remains to be explained by the NAIC SVO is why there was no reconciliation of the 2003 price with that for 2004, when there is no underlying deterioration to explain such a negative change."

Mark Anquillare, ISO's controller, told NAMIC his belief that it was a difference in the SVO's methodology in valuing the class B shares that caused the jarring discontinuity. He believed that another valuation was being performed by the SVO and that it held promise of rectifying the unexplainable plunge. It is known that the SVO has asked for data for that purpose.

Insurer-holders of the class B ISO shares need the revised and hopefully much higher valuation by the end of the year for purposes of valuing their assets for annual financial statements and regulatory reporting.

Kenneth S. Geraghty, Executive Vice President and CFO of ISO had said in November that the higher valuation had been reached via analysis based on average price of shares repurchased from shareholders. The lower valuation, he added, came from a "tangible book-value approach" and came after the SVO had lost paperwork.

"Price paid for these shares should be a factor," said Boyd. "Most of all, the SVO should have explained or reconciled what it was doing that caused the enormous price differential."

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For further information contact:
Robert Detlefsen at rdetlefsen@namic.org
or (317) 875-5250