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Independence Holding Company Announces Agreement to Acquire CA Marketing and Management, LLC

Posted on: Thursday, 5 October 2006, 18:00 CDT

Independence Holding Company (NYSE: IHC) today announced that it has entered into an agreement to acquire, as of January 1, 2007, CA Marketing and Management Services, LLC ("CAM"). CAM is a leading health insurance marketing company headquartered in Bloomington, MN offering consumer-directed health plans to individuals and small employers through multiple distribution channels in most states.

IHC expects that this transaction will be accretive to earnings, both through income earned from CAM and through additional premiums earned by IHC's affiliated companies. The acquisition of CAM fulfills one of IHC's strategic goals by enhancing IHC's administrative and marketing capacities and providing IHC access to CAM's experienced team of professionals and its proprietary on-line Health Savings Account administrative services.

Following the acquisition, CAM will change its name to IHC Health Solutions and will serve as the primary distribution channel for IHC's products through private label, strategic and sponsored marketing arrangements in the fully-insured health sector. Jeffrey C. Smedsrud, IHC's Chief Strategic Development Officer and the current owner of CAM, will be the Chief Executive Officer of IHC Health Solutions.

Closing of the transaction is subject to satisfactory completion of IHC's due diligence review and certain other customary conditions, including approval by the Audit Committee of IHC's Board of Directors.

"The quality of CAM's people and its comprehensive and proven marketing strategies make this an extremely attractive acquisition for IHC. This will strengthen our ability to develop consumer-directed health insurance products for agents who do not currently have access to health insurance products, and improves our ability to rapidly develop and bring to market unique product designs for large, national agent marketing groups," commented Roy Thung, IHC's Chief Executive Officer.

About Independence Holding Company

IHC is a holding company principally engaged in the life and health insurance business and the acquisition of blocks of policies through its insurance company subsidiaries (Standard Security Life Insurance Company of New York and Madison National Life Insurance Company, Inc.), its affiliate (American Independence Corp. (NASDAQ: AMIC)), and its managing general underwriters, third-party administrators and marketing affiliates. Standard Security Life markets medical stop-loss, employer-sponsored group major medical, short-term medical, group long and short-term disability and life, dental, vision and managed health care products. Madison National Life sells group life and disability, employer medical stop-loss, employer-sponsored group major medical, short-term medical, dental, vision, credit life and disability and individual life insurance. AMIC is a holding company principally engaged in the insurance and reinsurance business through Independence American Insurance Company and its managing general underwriter division.

Some of the statements included herein may be considered to be forward-looking statements which are subject to certain risks and uncertainties. Factors which could cause the actual results to differ materially from those suggested by such statements are described from time to time in IHC's filings with the Securities and Exchange Commission.

Source: Business Wire

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