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American Overseas Group Limited Announces First Quarter 2013 Net Loss Available To Common Shareholders Of $14.0 Million And Operating Income Of $4.2 Million

Subsequent Events:

On May 6, 2013, Assured Guaranty Ltd. and its subsidiaries ("Assured") announced that they had reached a settlement with UBS AG ("UBS") resolving their claims with respect to various U.S. residential mortgage-backed securities ("RMBS") transactions insured by Assured, including claims relating to reimbursement for breaches of representations and warranties ("R&W"). Under the settlement, UBS is required to make an initial cash payment to Assured of $358 million. Additionally, UBS is required to reimburse Assured for a portion of all future losses on certain transactions under a collateralized loss-sharing reinsurance agreement to be put in place by the third quarter of 2013. Assured has announced that this settlement resolves all RMBS claims that Assured has asserted against UBS, including those that have been in litigation.

On June 21, 2013, Assured announced that they and Flagstar Bank have entered into a Settlement Agreement concerning Assured's litigation against Flagstar Bank for breaches of R&W in connection with insured RMBS. The agreement follows a February 5, 2013 decision by the United States District Court for the Southern District of New York in favor of Assured. As part of the settlement, Flagstar Bank is required to make a cash payment to Assured of $105 million. Flagstar also is required to reimburse Assured in full for all future claims on certain of Assured's insurance policies. Additionally, Flagstar Bank has agreed not to appeal the decision reached by the United States District Court for the Southern District of New York. Assured has announced that the comprehensive settlement resolves all of its RMBS claims against Flagstar Bank and releases both parties from any and all other future RMBS-related claims between the parties.

The Company has determined that a number of policies ceded to the Company by Assured would be affected by these settlements. The Company anticipates that approximately $1.5 million and $0.4 million, respectively, of its R&W credit will be reduced by initial and future cash receipts on reinsurance ceded to the Company's subsidiary, American Overseas Reinsurance Company Limited on the UBS and Flagstar Bank policies; however, there is considerable uncertainty regarding the timing and amount of these payments and the impact on the Company's consolidated balance sheets and statements of operations at this time. The Company expects to record the impact of these transactions in 2013.

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