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Business Wire, Dec 09, 2009

HAMILTON, Bermuda — CRM Holdings, Ltd. (CRM or the Company) (Nasdaq: CRMH), a provider
of a full range of products and services for the workers compensation
insurance industry, today announced that it has received a Notice of
Imminent Enforcement Action from the New York State Office of the
Attorney General (Attorney General).

According to the Notice, the Attorney General intends to file civil
claims against the Company, certain of its subsidiaries, and certain
directors and officers to seek redress of allegedly unlawful practices,
unless an acceptable settlement can be reached within five days. The
Attorney Generals Notice follows over 19 months of investigation,
during which time the Company has cooperated fully with the Attorney
Generals office.

The Attorney General alleges that the Company and the other named
parties engaged in fraudulent practices in connection with Compensation
Risk Managers, LLCs administration and marketing of workers
compensation group self-insurance trusts in New York and in connection
with the Companys initial public offering completed in December 2005.
These practices are alleged to have violated New Yorks Executive Law
and Martin Act. The Attorney General is intending to seek injunctive
relief, restitution, damages, penalties, and costs.

The Attorney Generals Notice indicated that it remains open to
resolving the investigation without litigation and has provided the
Company and the named directors and officers with five days to present
acceptable offers of settlement.

The Company is disappointed by the Attorney Generals decision to bring
the lawsuit and dismayed that the Attorney Generals office chose to
disclose the Notice before the indicated window for discussion had
expired
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