Federated National Holding Company Discusses 2012 Notice of Assessment

Federated National Holding Company Discusses 2012 Notice of Assessment

SUNRISE, Fla., Nov. 27, 2012 (GLOBE NEWSWIRE) -- On November 21, 2012,
Federated National Insurance Company ("FNIC"), a wholly owned subsidiary of
Federated National Holding Company (Nasdaq:FNHC), received a Notice of 2012
Assessment from the Florida Insurance Guaranty Association, Inc. ("FIGA"). All
admitted carriers in Florida that transact the statutorily covered lines of
business are required to become members of FIGA, which was formed to provide a
mechanism for the payment of covered claims in the event of the insolvency of
an insurer. The assessment, which was approved by the Florida Office of
Insurance Regulation (the "Florida OIR"), is equal to 0.9% of each insurer's
net direct written premiums for the 2011 calendar year from categories of
insurance in FIGA's "All Other Account" (primarily property and liability
lines of business, except automobile).

FNIC's share of this assessment will result in a pre-tax charge to operations
of $813,759 in the fourth quarter of 2012, although FNIC plans to make a rate
filing to enable FNIC to recover the amount of the assessment from its
policyholders as permitted by law.

Mr. Michael H. Braun, the Company's Chief Executive Officer and President,
said, "The notice indicated that the assessment is primarily the result of the
November 2011 liquidations of Homewise Preferred Insurance Company
(liabilities estimated at $100 million) and Homewise Insurance Company
(liabilities estimated at $47 million). This liquidation transferred over 750
sinkhole claims to FIGA. Our share of this assessment is $813,759, which is
based on Federated National's 2011 net direct written premium of $90,417,649.
We plan to immediately submit a rate filing to the Florida OIR, which, if
approved, will enable us to recoup, as income, this assessment from our
policyholders over the next 18 months. Based on generally accepted accounting
principles, this assessment will be fully expensed in the fourth quarter of
2012.The 2012 assessment and accounting treatment of the assessment will
impact all insurance companies that transacted in the applicable lines of
business in the State of Florida in 2011.While this is disappointing in the
short term, our continued focus on writing sustainable quality business and
controlling expenses has put us in a position to absorb this assessment and
still maintain acceptable underwriting ratios and surplus growth during 2012."

About the Company

The Company, through its subsidiaries, underwrites homeowners' property and
casualty, commercial general liability, commercial residential property,
flood, personal automobile, commercial automobile, inland marine, workers'
compensation and personal umbrella insurance.The Company is an admitted
carrier for these lines in the state of Florida. The Company is also licensed
as an admitted carrier in the states of Alabama, Georgia, Louisiana and Texas
to offercoveragefor more than 300 classes of commercial general
liabilitybusiness, including special events. The Company is approved to
operate as a surplus lines/non-admitted carrier in the states of Arkansas,
Kentucky, Maryland, Missouri, Nevada, Oklahoma, South Carolina, Tennessee, and
Virginia and offers the same general liability products. The Company is
licensed and has the facilities to market and underwrite other insurance
carriers' lines of business, as well as to process and adjust claims for third
party insurance carriers.

Forward-Looking Statements /Safe Harbor Statements

Safe harbor statements under the Private Securities Litigation Reform Act of
1995:

Statements that are not historical fact are forward-looking statements that
are subject to certain risks and uncertainties that could cause actual events
and results to differ materially from those discussed herein. Without limiting
the generality of the foregoing, words such as "anticipate," "believe,"
"budget," "contemplate," "continue," "could," "envision," "estimate,"
"expect," "guidance," "indicate," "intend," "may," "might," "plan,"
"possibly," "potential," "predict," "probably," "pro-forma," "project,"
"seek," "should," "target," or "will" or the negative thereof or other
variations thereon and similar words or phrases or comparable terminology are
intended to identify forward-looking statements.

Forward-looking statements might also include, but are not limited to, one or
more of the following:

  oProjections of revenues, income, earnings per share, dividends, capital
    structure or other financial items or measures;
  oDescriptions of plans or objectives of management for future operations,
    insurance products, or services;
  oForecasts of future insurable events, economic performance, liquidity,
    need for funding and income; and
  oDescriptions of assumptions or estimates underlying or relating to any of
    the foregoing.

The risks and uncertainties include, without limitation, uncertainties related
to estimates, assumptions and projections generally; risks related to the
nature of the Company's business; the adequacy of its liability for loss and
loss adjustment expense; claims experience; weather conditions (including the
severity and frequency of storms, hurricanes, tornadoes and hail) and other
catastrophe losses; changes in loss trends; court decisions and trends in
litigation, ability to obtain regulatory approval applications for requested
rate increases or to underwrite in additional jurisdictions, and the timing
thereof; inflation and other changes in economic conditions (including changes
in interest rates and financial markets); pricing competition and other
initiatives by competitors; legislative and regulatory developments; the
outcome of litigation pending against the Company, and any settlement thereof;
dependence on investment income and the composition of the Company's
investment portfolio; insurance agents; ratings by industry services; reliance
on key personnel; acts of war and terrorist activities; and other matters
described from time to time by the Company in releases and publications, and
in periodic reports and other documents filed with the United States
Securities and Exchange Commission.

In addition, investors should be aware that generally accepted accounting
principles prescribe when a company may reserve for particular risks,
including claims and litigation exposures. Accordingly, results for a given
reporting period could be significantly affected if and when a reserve is
established for a contingency. Reported results may therefore appear to be
volatile in certain accounting periods.

Readers are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date on which they are made.We do not
undertake any obligation to update publicly or revise any forward-looking
statements to reflect circumstances or events that occur after the date the
forward-looking statements are made.

CONTACT: Michael H. Braun, CEO (954) 308-1322
         or Peter J. Prygelski, CFO (954) 308-1252
         Federated National Holding Company