EIG Mutual Holding Company Files Plan to Convert from a Mutual to a Stock Company

Reno, Nevada – August 22, 2006 – EIG Mutual Holding Company, the parent holding company of Employers Insurance Company of Nevada (“EICN”), today announced that it has filed a Plan of Conversion with the Nevada Commissioner of Insurance.

The Plan describes the terms upon which EIG Mutual Holding Company proposes to convert from a mutual insurance holding company to a publicly traded stock company. The Plan must be approved first by the Nevada Commissioner of Insurance after a public hearing on the Plan, and then by a vote of the members of EIG Mutual Holding Company. Assuming these approvals are obtained, EIG Mutual Holding Company would conduct an initial public offering of the common stock of the converted holding company. The conversion will not affect in any way the policy benefits, dividend eligibility, or policy premiums of existing EICN policies. The company currently anticipates that the completion of the conversion will occur in the first quarter of 2007, at the earliest.

Nevada Governor Kenny Guinn spearheaded legislation in 1999 that established Employers Insurance Company of Nevada as a mutual insurance company owned by its Nevada policyholders, from the former State Industrial Insurance System. Headquartered in Reno, Nevada, EIG Mutual Holding Company offers workers’ compensation insurance to small businesses in eight states through EICN and Employers Compensation Insurance Company, and care management services through Employers Occupational Health, Inc.

“We are excited to embark upon this new chapter in the evolution of our company,” said Douglas D. Dirks, Chief Executive Officer of EIG Mutual Holding Company. “Our conversion to a stock company will enhance our financial and strategic flexibility and enable us to take advantage of growth opportunities and continue our expansion into new markets. Our Board of Directors examined the Plan of Conversion carefully and concluded that it is fair and equitable to the eligible members of EIG Mutual Holding Company.”

If the conditions to the conversion are satisfied, the Plan provides for the distribution to the over 6,500 eligible members of EIG Mutual Holding Company of aggregate consideration of not less than EICN’s surplus as reported in its statutory financial statements most recently filed prior to completion of the conversion. As of June 30, 2006, EICN’s surplus was $554 million.

The aggregate value of any consideration to be distributed to eligible members will not be determined until the time of the completion of the conversion and the initial public offering. Any distribution of consideration to eligible members would be made in exchange for the extinguishment of their membership interests in EIG Mutual Holding Company at the time of completion of the conversion and the initial public offering. Any consideration will be in the form of the converted company’s common stock, cash or a combination of both. Only members of EIG Mutual Holding Company who have policies issued by EICN that were in force on August 17, 2006 will be eligible to receive consideration if the Plan becomes effective.

The Plan and certain related documents will be available on the company’s website at www.eig.com and through the Nevada Division of Insurance. More detailed information about the proposed conversion will be provided to members of EIG Mutual Holding Company in the coming months. In the meantime, members may call a toll-free telephone number (1-888-900-1476) between the hours of 8:00 a.m. and 5:00 p.m., Pacific Time, Monday through Friday, to speak to a company representative. For more information, please visit the company’s website at www.eig.com.

In connection with its adoption and implementation of the Plan of Conversion, EIG Mutual Holding Company is being advised by Skadden, Arps, Slate, Meagher & Flom LLP and Lionel Sawyer & Collins as to legal matters and the Tillinghast business of Towers Perrin as to certain actuarial matters.

This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities.


Contact Information

Media Contact: Diana Zunini
(775) 379-4524 or dzunini@employers.com

Company Contact: Mike Paquette
(775) 327-2562 or mpaquette@employers.com

Investor Relations Contact: Adam Prior, The Equity Group, Inc.
(212) 836-9606 or aprior@equityny.com


About Employers Holdings, Inc.

EMPLOYERS® and America’s small business insurance specialist® are registered trademarks of EIG Services, Inc. Employers Holdings, Inc. is a holding company with subsidiaries that are specialty providers of workers’ compensation insurance and services focused on select, small businesses engaged in low-to-medium hazard industries. The Company operates throughout the United States, with the exception of four states that are served exclusively by their state funds. Insurance is offered through Employers Insurance Company of Nevada, Employers Compensation Insurance Company, Employers Preferred Insurance Company, Employers Assurance Company and Cerity Insurance Company, all rated A- (Excellent) by the A.M. Best Company. Not all companies do business in all jurisdictions. See www.employers.com and www.cerity.com for coverage availability.