Builders Insurance Mails Letter to Policyholders

ATLANTA, July 14 /PRNewswire/ -- Builders Insurance (a Mutual Captive Company) today announced that it has mailed the following letter to all Builders Insurance policyholders from Allen Richardson, Chairman of the Board, and Patrick Mitchell, President and Chief Executive Officer in response to the attempted hostile takeover by Home Builders Association of Georgia ("HBAG"):

STOP HBAG'S ATTEMPTED HOSTILE TAKEOVER OF BUILDERS INSURANCE GROUP

July 2, 2008

Dear Builders Insurance Policyholder:

As a policyholder of Builders Insurance (A Mutual Captive Company), your needs have always been, and always will be, our top priority. As a policyholder, you are also an owner of this insurance company and your vote is vitally important to our future. Home Builders Association of Georgia (HBAG) is attempting to replace your Board of Directors with a group of handpicked individuals with no discernable experience running an insurance company to further HBAG's own economic interests - not yours.

Time is short, so we urge you to ACT NOW to support Builders Insurance and prevent HBAG from taking over our company.

-- DO NOT SIGN HBAG's BLUE PROXY CARD and discard any materials sent to you by HBAG.

-- SIGN AND RETURN THE ENCLOSED WHITE CONSENT REVOCATION AND PROXY ("PROXY") TODAY in the postage-paid envelope provided. You can also support Builders Insurance by voting by telephone (call toll-free: (877) 869-0171) or internet (www.myproxyonline.com/builders).

-- Even if you have already voted HBAG's blue proxy, you can still change your vote. Signing a WHITE Proxy cancels any blue card you previously signed. ONLY YOUR LATEST DATED PROXY COUNTS.

                    DON'T BE INTIMIDATED BY STRONG-ARM TACTICS AND                    DON'T BE FOOLED BY HBAG'S MISREPRESENTATIONS  

We understand certain individuals have been using a variety of strong-arm tactics to pressure our policyholders to vote for HBAG's nominees. HBAG also continues to send malicious and misleading emails to its members that misrepresent, among other things, Builders Insurance's dividend history and policy and the compensation paid to Builders Insurance directors. HBAG's proxy contest is not really about any of these issues. HBAG's proxy contest is about whether or not you, the policyholders, should have the option to choose your association membership and to save money in today's challenging economic times or be forced to go back to HBAG's expensive membership monopoly. Builders was created to provide insurance, pay claims and protect the assets of policyholders NOT to serve as HBAG's single largest source of revenue.

HBAG'S HANDPICKED DIRECTOR NOMINEES ARE INEXPERIENCED AND COULD THREATEN THE

                      STABILITY OF BUILDERS INSURANCE  

HBAG is trying to replace Builders Insurance's qualified and experienced directors with a slate of handpicked nominees who:

-- Have NO discernable experience running an insurance company;

-- Lack detailed understanding of Builders Insurance; and

-- Could serve as "rubber stamps" for HBAG's self-serving agenda, potentially sacrificing future dividends paid to our policyholders in order to restore the lucrative fees paid to HBAG.

Furthermore, almost half of HBAG's members are NOT even Builders Insurance policyholders, so why should HBAG's members benefit at the expense of Builders Insurance policyholders? We believe it is difficult for HBAG and its nominees to represent the interests of Builders Insurance policyholders when they are beholden to members with significantly different interests.

Under the leadership of your board, Builders Insurance has an outstanding history of delivering value to policyholders by offering products at competitive prices and by paying dividends.

-- Builders Insurance is the only insurance company with a 12-year record of paying dividends to its policyholders in our market segment in Georgia.

-- Since 1997, Builders Insurance has returned more than $42 million to policyholders in the form of dividends, a payout of more than 40% of our net income.

-- Even in light of the challenging economic and housing environment, Builders Insurance recently distributed $1.6 million in dividend payments to qualified policyholders.

We believe that if HBAG takes over Builders Insurance, the stability of Builders Insurance and our A- (Excellent) rating from A.M. Best could both be in jeopardy. If Builders Insurance were to lose its A- rating, our agents might no longer be able to recommend or write new Builders Insurance policies. This could dramatically affect Builders Insurance's earnings and our policyholders could be left with fewer choices and higher prices. Don't just take our word for it. Some of our valued independent agents have expressed their concern about the possible impact of an HBAG takeover of Builders Insurance and their clients (emphasis added below).

     "Clients trust my advice and my judgment. I'm a partner in their business,     so I owe it to them to work with providers that are well-managed and     financially strong. My concern is that HBAG's candidates don't have     experience running an insurance company. They haven't managed a company of     Builders Insurance's size and complexity. If HBAG succeeds in its campaign     to take control of Builders Insurance, the company will risk losing its A-     rating with A.M. Best and that's not a risk I'm willing to take. I'm     standing by Builders Insurance."                                                       - Dwayne Clark, Marvin                                                         L. Jenkins Agency      "Builders Insurance is not asking for the members of the Home Builders     Association of Georgia to drop their membership. They are simply offering     an additional low-cost membership option for those policyholders who only     want access to buy Builders Insurance products. Furthermore, Builders     Insurance has the experience and leadership necessary to continue the     services that our clients deserve. To insure the continued success and the     support of both our clients and agents, I pledge to stand behind Builders     Insurance Group."                                                       - Bernie Page, Copelan                                                         Insurance Agency, Inc.         VOTE BUILDERS INSURANCE'S WHITE PROXY TODAY TO PROTECT YOUR RIGHTS  

Protect your rights and your insurance provider from HBAG's attempted takeover. DO NOT SIGN ANY BLUE PROXY CARD SENT TO YOU BY HBAG. Instead support Builders Insurance by signing and returning the attached WHITE Proxy in the enclosed postage-paid envelope or voting by telephone or internet at the instructions listed below. Even if you have already voted HBAG's blue proxy, you can still change your vote. Signing Builders Insurance's WHITE Proxy today cancels any blue card you previously signed. Only the latest dated proxy counts.

If you have any questions or need any assistance voting your proxy, please contact Okapi Partners, the proxy advisor assisting Builders Insurance in this matter, toll-free at (877) 869-0171.

     On behalf of the Builders Insurance Board of Directors, we thank you for your continued support.      Sincerely,      /s/ Allen Richardson            /s/ Patrick Mitchell      Allen Richardson                Patrick Mitchell     Chairman of the Board           President and Chief Executive Officer 

About Builders Insurance Group

With more than 15 years of service, Builders Insurance Group has become the largest Workers' Compensation underwriter domiciled in Georgia and a leading provider of General Liability insurance throughout the Southeast. Builders Insurance Group works through a network of local, independent insurance agents to deliver insurance products tailored to the needs of the home building community. Headquartered in Atlanta, the Builders Insurance Group companies administer coverage to more than 12,500 policyholders and are rated A- (Excellent) VIII by A.M. Best Company. Builders Insurance Group has three member insurance companies, Builders Insurance (A Mutual Captive Company), Association Insurance Company and Vinings Insurance Company. For more information, please visit our Web site at www.bldrs.com .

SOURCE Builders Insurance

CONTACT: Lisa J. Kwon, Communications & Events of Builders Insurance Group, +1-678-309-4166, [email protected]