CUNA MUTUAL GROUP, STATE NATIONAL COMPANIES FORM ALLIANCE

Collateral Protection Insurance Leaders Join Forces on Core Credit Union Product

Madison, Wis. – July 28, 2009 - CUNA Mutual Group and State National Companies are forming an alliance to provide tracked collateral protection insurance to credit unions. The combination maximizes CUNA Mutual's expertise in serving credit unions with State National's specialization in CPI.

State National is the only company that provides CPI as its core focus. The alliance with CUNA Mutual creates the largest consumer CPI affiliation serving credit unions in the collateral protection industry – one that will deliver both immediate and long-term benefits to credit unions and their members nationwide.

State National is assuming the insurance tracking, underwriting, claims processing and customer service for CUNA Mutual's tracked consumer CPI business. CUNA Mutual will continue to offer its other collateral protection products, including blanket, immediate issue, real estate, title tracking and several optional coverages.

CPI is a commercial product that protects the collateral on credit unions' loan portfolios against uninsured physical damage exposures. Tracked programs generate notices to members who aren't in compliance with their loan agreement to maintain a minimum level of physical damage insurance. When proof of insurance is not provided, a policy is placed on the collateral to protect the credit union should the collateral become damaged and have to be repossessed.

Equally committed to the product's future growth, both companies will collaborate in sales efforts. CUNA Mutual will continue as credit unions' single point of contact, while State National will provide product expertise to the sales process.

"As part of our commitment to our credit union customers, we continually review our product delivery," said Bob Trunzo, chief operating officer, CUNA Mutual. "In response to the review – and feedback from customers – we determined an alliance with State National, an expert in tracked CPI, will improve the functionality and the value our product brings to credit unions."

"This alliance represents significant growth potential for State National that will deliver long-term benefits to credit unions," said Lonnie Ledbetter, CEO of State National. "State National is a dynamic and growing company and this was an unprecedented opportunity to increase our market presence and build on our reputation of delivering unique program benefits and services."

Combined, CUNA Mutual and State National will serve the CPI needs of more than 700 credit unions.

"We see this as a true win-win," Trunzo said. "Our customers will receive the desired product through a provider that's an expert in that line of business. As we've done with other successful partnerships, such as Liberty Mutual, this alliance will bring value to our customers and our company. Strengthening how we deliver tracked collateral protection ultimately strengthens CUNA Mutual and our commitment to the credit union space."

Once transitioned, credit unions benefit from improved stability, speed and accuracy, said Trace Ledbetter, State National senior vice president of service. "Unlike typical program conversions, the alliance creates linkages for key program components, thereby eliminating most of the traditional hassles of vendor conversions," he said.

Policies will be underwritten by State National Insurance Company, rated "A" (Excellent) by A.M. Best. CUNA Mutual customers will maintain their CUNA Mutual sales executive as their primary point of contact with specific tracked collateral protection product expertise and support from a State National expert. Representatives of both companies will deliver credit union staff training.