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Industrial Alliance Announces a $150 Millions Issue of Subordinated Debentures and the Redemption of its $75 Million of Series 3 Subordinated Debentures

Quebec City,

News Release

Base shelf prospectus

Prospectus supplement

Industrial Alliance Insurance and Financial Services Inc. (Toronto Stock Exchange: IAG) announced today the filing of a prospectus supplement to issue $150 million of subordinated debentures and the redemption of all of its Series 3 Subordinated Debentures, with a par value of $75 million.

The $150 million issue of subordinated debentures is the first to be made by Industrial Alliance under the terms of a base shelf prospectus dated February 19, 2004, which provides for the issuance of a maximum of $1 billion of debt securities, preferred shares or common shares.

The issue of subordinated debentures announced today has received regulatory approval and is scheduled to close on or around March 11, 2004. The subordinated debentures will mature on June 30, 2019 and will carry an annual yield of 5.13%, payable semi-annually for the first ten years. After this period, the annual rate of return shall be equal to the 90-day Bankers’ Acceptance Rate plus 1.00% and will be payable quarterly until maturity.

The issue will be offered by a syndicate of underwriters composed of Scotia Capital Inc., acting as lead underwriter, Merrill Lynch Canada Inc., RBC Capital Markets, BMO Nesbitt Burns Inc., National Bank Financial Inc. and Industrial Alliance Securities Inc. The subordinated debentures have not been and will not be registered under the United States Securities Act and may not be offered or sold within the United States.

The proceeds of the issue will be used to redeem the outstanding Series 3 Subordinated Debentures and for general corporate purposes. The aggregate of the $75 million of Series 3 Subordinated Debentures will be redeemed at their par value on March 24, 2004. To this end, the Company has received approval from the Agence nationale d’encadrement du secteur financier. The Series 3 Subordinated Debentures were issued on February 12, 1999, as part of a private issue of capital underwritten by Capital d’Amérique CDPQ. These debentures were to mature on January 24, 2010 and were redeemable at the option of Company beginning February 12, 2004.

About the Industrial Alliance Group
The Industrial Alliance Group is among the most solid financial institutions in the country, where it is an industry leader in the fields of insurance and financial services. The Group has operations throughout Canada, through Industrial Alliance (Quebec City), National Life (Toronto) and Industrial Alliance Pacific (Vancouver). The sixth largest life and health insurance company in Canada, the Industrial Alliance Group insures more than 1.7 million Canadians, employs more than 2,400 people and administers and manages $19.6 billion in assets. Industrial Alliance is among the 100 largest public companies in Canada.

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Jacques Carrière
Vice-President, Investor Relations
Industrial Alliance Insurance and Financial Services
Office: (418) 684-5275
Cell: (418) 576-3624