Consolidated Services Group, Inc. (CSG) acquires CHN

Consolidated Services Group, Inc. (CSG) Announces the Acquisition of
New Jersey’s Number One Preferred Provider Organization

Lansdale, Pa. – December 2, 2005 – Today, Consolidated Services Group, Inc. (CSG), a privately-owned regional provider of property and casualty medical claims management services to the auto liability, general liability and workers’ compensation industries, acquired CHN Solutions from Selective Insurance Group, Inc. (NASDAQ: SIGI) for $16 million. CHN Solutions provides comprehensive URAC-Accredited preferred provider organization (PPO) and managed care programs. CHN PPO has been ranked number one in New Jersey by NJ Biz for the past eight years. The cash deal doubles the size of the company to approximately $60 million in annual revenues and marries the power of two regional industry leaders to deliver a greater breadth of services through a proprietary integration technology platform – Medlogix®. The acquisition, financed by CapitalSource Finance LLC, Md., alters the playing field and enables CSG to marshal a portfolio of services customizable to client needs.

“Adding CHN Solutions to our family will benefit our customers, the CHN PPO and all of our employees,” says Michael Morrone, president and CEO of CSG. “Now we can deliver a more efficient comprehensive service package to customers – including a URAC-Accredited PPO – through our proprietary medical management software, Medlogix; offer greater patient volume to the provider network of CHN Solutions through CSG’s business; and present a broader base of provider access to our customers through our acquisition of CHN Solutions. Our combined business plan will be an unbeatable combination. It has always been my credo to ‘position our company for success.’ This will present options for growth and advancement to employees within a larger, more diverse company.”

“We’re excited about the acquisition,” said Len Weinman, president and CEO of CHN Solutions, now senior vice president of CSG. “CSG and CHN Solutions each bring a different piece of the puzzle to offer customers the complete solution for the region. This combination will only enhance our existing relationships. While we’re excited about the enhancements this will bring to our employees, clients and providers, we anticipate a smooth transition as we join forces with CSG.”

Selective will remain a client of the new company with a multi-year contract. According to James Coleman, executive vice president of Selective’s Diversified Insurance Services, “We look forward to an ongoing client relationship with CSG and believe this transition is positive for both companies.”

The new company, known as Consolidated Services Group, will comprise CSG’s complete portfolio of services (including CRC and MedPath) and the full complement of CHN Solutions offerings (including Northeast Health Direct), delivered through its unparalleled integration technology platform, Medlogix®. This proprietary technology bridges the communication gap between payors and providers. It creates a seamless, Web-based platform through which all processes flow through one integrated system. The technology was developed to satisfy the regulations of New Jersey, New York and Pennsylvania – states with some of the industry’s most complex rules. In creating Medlogix, CSG engineered a highly adaptable platform that can easily accommodate the needs of nearly any other state or genre. Keeping with its mission, CSG continues to deliver on the promise of value.

Consolidated Services Group is headquartered in Lansdale, Pa., with an office in Cherry Hill, N.J., and now Hamilton, N.J., and Connecticut. CHN Solutions will retain its name and, with the same management team and workforce, will operate as a division of CSG. Together, CSG with CHN Solutions offers promise for strength, stability and growth. Previously a $30 million company, CSG has enjoyed double-digit growth over the past few years. CHN Solutions, with similar revenues, has quadrupled in size within the past six years.

Consolidated Services Group, with more than 25 years experience in the property and casualty medical claims management business, provides managed care, utilization review and cost containment services to auto liability, general liability and workers’ compensation insurers. CSG services a significant number of the industry’s largest property and casualty carriers, and CHN Solutions represents several major insurers, third-party administrators, and many municipal and school board joint insurance funds in New Jersey and New England regions. With CHN Solutions – its PPO (URAC-Accredited for Health Network with Credentialing) and its workers’ compensation managed care organization (URAC-Accredited for Case Management and Utilization Management) – and its unparalleled proprietary integration technology, Medlogix, the new Consolidated Services Group offers customers a medical claims solution that surpasses others in the marketplace.

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Editors note: Michael Morrone, President and CEO of Consolidated Services Group, is available for interviews upon request. Please contact Angela Collom or Steve Majewski at 856-983-9844 or at acollom@buckleyglobal.com or smajewski@buckleyglobal.com.