Scottish Re Announces Sale of ING Individual Life Reinsurance Business to Hannover Re

Scottish Re Group Limited (Pink Sheets:SKRRF) “Scottish Re” or the “Company”, announced today that it has entered into an agreement with Hannover Rückversicherung AG (“Hannover Re”) for the sale to Hannover Re of the Company’s individual life reinsurance business originally acquired from ING at the end of 2004 other than that portion which is currently reinsured by Ballantyne Re plc (the “ING Business”). Related to the sale of the ING Business, Scottish Re will transfer systems related to policy administration for its Traditional Solutions line of business to Hannover Re who will in turn administer all of the ING Business as well as the business reinsured by Ballantyne Re and continue to administer Scottish Re’s remaining Traditional Solutions business pursuant to separate Administrative Services Agreements. The transaction is expected to close during the first quarter of 2009, subject to regulatory approvals and other customary closing conditions.

Scottish Re originally had targeted a sale of its entire North American Segment, but following the historic disruption in the financial markets in late September, it was unable to consummate such a transaction. In an effort to find ways to address its acute capital, liquidity and collateral needs and to allay concerns of its regulators, Scottish Re pursued the sale of a specific block of individual life reinsurance in its North America Segment.

“This transaction is the next step in Scottish Re’s previously disclosed change to its strategic focus to preserve capital and mitigate growing liquidity demands,” commented Paul Goldean, Chief Executive Officer of Scottish Re. “Following this transaction, we will continue to manage our Financial Solutions business as well as maintain one of the 10 largest inforce portfolios of traditional life business in North America.”

Merrill Lynch & Co. served as the exclusive financial advisor for the transaction and Dewey & LeBoeuf served as the Company’s legal counsel.

About Scottish Re

Scottish Re Group Limited is a global life reinsurance specialist. Scottish Re has operating businesses in Bermuda, Ireland and the United States. Its flagship operating subsidiaries include Scottish Annuity & Life Insurance Company (Cayman) Ltd., and Scottish Re (U.S.), Inc. Additional information about Scottish Re Group Limited can be obtained from its Web site, www.scottishre.com.

Scottish Re anticipates posting on its Web Site in the next week further information regarding the transaction as well as details on recent developments impacting the Company.

Contacts

Scottish Re Media Contact
Holly Cannon, 704-544-5827
Marketing Communications Specialist
or
Scottish Re Investor Contact
Paul Goldean, 441-298-4378
Chief Executive Officer