Kingsway Notes Lawsuit Over Pre-Acquisition Reserve Deficiencies at American Country

July 29, 2003

Kingsway Financial Services Inc. has commenced an action against PricewaterhouseCoopers LLP, Miller, Herbers, Lehman & Associates, Inc. and the former Directors of American Country Holdings, Inc. ("American Country") relating to the reported understatement of the reserves of American Country's insurance subsidiary for the years 1998 through 2001 and associated costs and damages thereon. These reserve deficiencies reportedly occurred prior to Kingsway's acquisition of American Country in April, 2002.

These reserve deficiencies have all been recorded in Kingsway's 2002 audited financial statements. The company has not experienced any material adverse development from American Country's reserves in 2003.