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Fairfax restructuring TIG business

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TORONTO--TIG Insurance Co. is undergoing a restructuring that includes running off more than half of its business.

The restructuring, implemented by TIG's parent, Toronto-based Fairfax Financial Holdings Ltd., calls for TIG to discontinue the remainder of its Dallas-based program business. The discontinued business, which represents around 56% of TIG's $722 million in net premiums written in the United States through September, will be taken on by RiverStone Group, a Fairfax subsidiary that manages runoff business.

Also as part of the restructuring, TIG has merged with Fairfax's International Insurance Co. subsidiary.

TIG will turn over around $1.25 billion Canadian ($800.9 million) in assets to Fairfax, including 33.2 million of TIG's 47.8 million shares of Fairfax subsidiary Odyssey Re Holdings Corp. The securities will be held for TIG, pending the outcome of certain financial tests at the end of 2003.

TIG's special risk operations in Napa, Calif., will do business as a managing general underwriter, focusing on excess property/casualty coverages. Plans call for Odyssey Re to acquire the health care division of the special risk unit, as well as an excess/surplus lines subsidiary of TIG through which the business is written.

Fairfax has guaranteed that TIG will maintain $500 million of statutory surplus at the end of 2003 and risk-based capital ratio of at least 200% at each year end.