Tower Group, Inc. Announces Special Meeting of Stockholders

  
    
  
  
    
      Tower Group, Inc. (“Tower”) (NASDAQ:TWGP) announced today that it has 
      fixed a record date and special meeting date for its stockholders to 
      consider and vote on the authorization and issuance of shares of Tower 
      common stock in connection with the merger of CastlePoint with and into 
      a wholly-owned subsidiary of Tower, as previously announced on August 4, 
      2008. In addition, CastlePoint Holdings, Ltd. (“CastlePoint”) 
      (NASDAQ:CPHL) announced today that it has fixed a record date and 
      special general meeting date for its shareholders to consider and vote 
      on the merger.
    
    
      Tower’s special meeting of stockholders will be held on January 28, 2009 
      at 10:00 A.M., Eastern time, at the Millenium Hilton, 55 Church Street, 
      New York, New York 10007. Tower’s stockholders of record at the close of 
      business on December 4, 2008, will be entitled to notice of, and to vote 
      at, the Tower special meeting. A definitive joint proxy 
      statement/prospectus for the Tower special meeting will be mailed to 
      stockholders of record on or about December 19, 2008.
    
    
      CastlePoint’s special general meeting of members (shareholders) will be 
      held on January 27, 2009 at 10:00 A.M., Atlantic time, at the Fairmont 
      Hamilton Princess Hotel, 76 Pitts Bay Road, Hamilton, Bermuda. 
      CastlePoint shareholders of record at the close of business on December 
      4, 2008, will be entitled to notice of, and to vote at, the CastlePoint 
      special general meeting. A definitive joint proxy statement/prospectus 
      for the CastlePoint special general meeting will be mailed to 
      shareholders of record on or about December 19, 2008.
    
    
      All required regulatory approvals have been addressed. On December 19, 
      the Securities and Exchange Commission (the “Commission”) declared 
      effective the registration statement on Form S-4 for the registration of 
      shares of Tower common stock to be issued in connection with the merger. 
      Tower and CastlePoint have received early termination of the waiting 
      period under the Hart Scott Rodino Antitrust Improvements Act of 1976, 
      as amended. In addition, the New York State Insurance Department has 
      advised that Tower is not required to obtain approval from it to close 
      the merger. The closing of the merger will not require approval 
      from any other insurance department or regulatory authority, including 
      the Florida Office of Insurance Regulation.
    
    
      About Tower
    
    
      Tower offers property and casualty insurance products and services 
      through its operating subsidiaries. Its insurance company subsidiaries 
      offer insurance products to individuals and small to medium-sized 
      businesses. Tower’s insurance services subsidiaries provide 
      underwriting, claims and reinsurance brokerage services to other 
      insurance companies.
    
    
      About CastlePoint
    
    
      CastlePoint, a Bermuda-based holding company, through its subsidiaries, 
      CastlePoint Reinsurance Company, CastlePoint Management Corp., and 
      CastlePoint Insurance Company, provides property and casualty insurance 
      and reinsurance business solutions, products and services to small 
      insurance companies and program underwriting agents in the United States.
    
    
      CPHL-F
    
    
      Cautionary Note Regarding Forward-Looking Statements
    
    
      The Private Securities Litigation Reform Act of 1995 provides a “safe 
      harbor” for forward-looking statements. This press release or any other 
      written or oral statements made by or on behalf of Tower and CastlePoint 
      may include forward-looking statements that reflect Tower’s and 
      CastlePoint’s current views with respect to future events and financial 
      performance. All statements other than statements of historical fact 
      included in this press release are forward-looking statements. 
      Forward-looking statements can generally be identified by the use of 
      forward-looking terminology such as “may,” “will,” “plan,” “expect,” 
      “project,” “intend,” “estimate,” “anticipate,” “believe” or “continue” 
      or their negative or variations or similar terminology. All 
      forward-looking statements address matters that involve risks and 
      uncertainties. Accordingly, there are or will be important factors that 
      could cause the actual results of CastlePoint, Tower, HIG, Inc. 
      (“Hermitage”), which CastlePoint has agreed to acquire pursuant to a 
      Stock Purchase Agreement dated as of August 27, 2008 and with respect to 
      which Tower and CastlePoint have entered into a separate asset purchase 
      agreement dated as of August 26, 2008 pursuant to which Tower has agreed 
      to acquire certain operating assets of Hermitage from CastlePoint, and 
      the combined companies to differ materially from those indicated in 
      these statements. The following factors, among others, could cause or 
      contribute to such material differences: the ability to obtain 
      governmental approvals or rulings on or regarding the Hermitage 
      transactions or the merger on the proposed terms and schedule; the 
      failure of the shareholders of CastlePoint to approve the merger; the 
      failure of the stockholders of Tower to approve the increase of 
      authorized shares of Tower common stock or the issuance of such shares; 
      the failure to satisfy the closing conditions to the Hermitage 
      acquisition or the merger; the risk that the businesses will not be 
      integrated successfully or that such integration may be more difficult, 
      time-consuming or costly than expected; the risk that the revenue 
      opportunities, cost savings and other anticipated synergies from the 
      Hermitage acquisition or the merger may not be fully realized or may 
      take longer to realize than expected; disruption from the Hermitage 
      acquisition or the merger making it difficult to maintain relationships 
      with customers, employees, brokers and managing general agents; the risk 
      that the U.S. or Bermuda tax authorities may view the tax treatment of 
      the Hermitage acquisition or merger and/or the other transactions 
      contemplated by the Hermitage stock purchase agreement or the merger 
      agreement differently from CastlePoint and Tower’s tax advisors; costs 
      relating to the transactions; ineffectiveness or obsolescence of the 
      business strategy due to changes in current or future market conditions; 
      increased competition on the basis of pricing, capacity, coverage terms 
      or other factors; greater frequency or severity of claims and loss 
      activity, including as a result of natural or man-made catastrophic 
      events, than the underwriting, reserving or investment practices of 
      Hermitage, CastlePoint or Tower anticipate based on historical 
      experience or industry data; the ability to obtain necessary 
      governmental licenses; the ability to hire and retain executive officers 
      and other key personnel; the effects of acts of terrorism or war; 
      developments in the world’s financial and capital markets that adversely 
      affect the performance of Hermitage’s, CastlePoint’s and Tower’s 
      investments; changes in regulations or laws applicable to Hermitage, 
      CastlePoint, Tower and their respective subsidiaries, brokers or 
      customers, including tax laws in Bermuda and the United States; 
      acceptance of products and services, including new products and 
      services; changes in the availability, cost or quality of reinsurance 
      and failure of Hermitage’s, CastlePoint’s or Tower’s reinsurers to pay 
      claims timely or at all; decreased demand for Hermitage’s, CastlePoint’s 
      or Tower’s insurance or reinsurance products; the effects of mergers, 
      acquisitions and divestitures in the insurance and reinsurance sectors; 
      changes in rating agency policies or practices; changes in legal 
      theories of liability under Hermitage’s, CastlePoint’s and Tower’s 
      insurance policies or the policies that it reinsures; changes in 
      accounting policies or practices; and changes in general economic 
      conditions, including inflation and other factors. Forward-looking 
      statements speak only as of the date on which they are made, and the 
      assumptions underlying our pro forma projections and/or earnings 
      guidance could prove incorrect due to, among other things, the foregoing 
      factors, and neither CastlePoint nor Tower undertake any obligation to 
      update publicly or revise any forward-looking statement, whether as a 
      result of new information, future developments or otherwise.
    
    
      Additional Information
    
    
      Although the acquisition of Hermitage by CastlePoint and sale of 
      Hermitage operating assets by CastlePoint to Tower is not subject to 
      approval by either Tower stockholders or CastlePoint shareholders, 
      information regarding the transaction will be included in the joint 
      proxy statement/prospectus related to the merger.
    
    
      Stockholders of Tower and shareholders of CastlePoint are urged to read 
      the joint proxy statement/prospectus regarding the proposed merger 
      because it will contain important information. Tower and CastlePoint 
      filed a preliminary joint proxy statement/prospectus on Form S-4 with 
      the Commission on September 30, 2008, Amendment No. 1 on November 10, 
      2008, Amendment No. 2 on December 3, 2008 and Amendment No. 3 on 
      December 15, 2008. The definitive joint proxy statement/prospectus is 
      expected to be available on or about December 19, 2008. Stockholders of 
      Tower and shareholders of CastlePoint will be able to obtain a free copy 
      of the joint proxy statement/prospectus, as well as other filings 
      containing information about Tower and CastlePoint, without charge, at 
      the Commission’s Internet site (www.sec.gov). 
      Copies of the joint proxy statement/prospectus and the filings with the 
      Commission that will be incorporated by reference in the joint proxy 
      statement/prospectus can also be obtained, without charge, by accessing 
      the each company’s website:
    
    
      http://www.twrgrp.com/ 
      or http://www.castlepoint.bm/
    
    
      Tower and CastlePoint, their respective directors and executive officers 
      and other persons may be deemed to be participants in the solicitations 
      of proxies from the stockholders of Tower and/or shareholders of 
      CastlePoint in respect of the proposed merger. Information regarding 
      each of Tower’s and CastlePoint’s directors and executive officers is 
      available in the joint proxy statement/prospectus filed with the 
      Commission. Additional information regarding the participants in the 
      proxy solicitation and a description of their direct and indirect 
      interests, by security holdings or otherwise, are contained in the 
      preliminary joint proxy statement/prospectus and will be contained in 
      the definitive joint proxy statement/prospectus when it becomes 
      available.
    
    
      This press release shall not constitute an offer to sell or the 
      solicitation of an offer to sell or the solicitation of an offer to buy 
      any securities, nor shall there be any sale of securities in any 
      jurisdiction in which such offer, solicitation or sale would be unlawful 
      prior to registration or qualification under the securities laws of such 
      jurisdiction. No offering of securities shall be made except by means of 
      a joint proxy statement/prospectus meeting the requirements of Section 
      10 of the Securities Act of 1933, as amended.
    
    
      For more information visit Tower’s website at:
    
    
      http://www.twrgrp.com/.
    
    
      or CastlePoint’s website at:
    
    
      http://www.castlepoint.bm/