CRM Holdings, Ltd. Press Release

CRM Holdings, Ltd. (”CRM”) (”the Company”) , a leading provider of a full range of products and services for the workers’ compensation insurance industry, today announced that the novation agreement previously disclosed between the Company’s subsidiary Majestic Insurance Co. (”Majestic”) and New York Marine and General Insurance Company (”NYMAGIC”) has been completed. All closing conditions, including regulatory consents and policy holder agreements having been satisfied. As a result of this transaction, the Company will realize a pre tax benefit of approximately $1.9 million.

“The relationship we enjoyed with NYMAGIC has been beneficial to both organizations. We welcome the novation as a means of enhancing shareholder value and strengthening our balance sheet as we pursue future growth opportunities,” said Mr. Daniel G. Hickey Jr., Chairman and Chief Executive Officer of CRM.

Under terms of the agreement, Majestic has been assigned all of NYMAGIC’s rights, duties and obligations under certain excess workers’ compensation policies previously issued by NYMAGIC to certain self-insured groups managed by the Company’s subsidiaries, together with the reinsurance agreements that are associated with those policies. Majestic assumed NYMAGIC’s position on two quota share reinsurance agreements with the Company’s Bermuda subsidiary, Twin Bridges. These reinsurance agreements are the 50% quota share arrangement for policies issued between December 2003 and November 2005 and the 70% quota share arrangement for policies issued from December 2005 through December 2006. Under the novation, Majestic assumes premiums and losses that are complementary to the business previously reinsured by Twin Bridges through these quota share arrangements.