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Industrial Alliance Reacts to the Publication of the Report by the Receiver RSM Richter Concerning the Funds Managed by the Norshield Companies

Quebec City,

News Release

In light of the observations contained in the report tabled yesterday at the Ontario Superior Court of Justice by RSM Richter Inc. ("Richter") in its capacity as the court-appointed receiver of the Norshield Companies ("Norshield"), Industrial Alliance Insurance and Financial Services Inc. ("Industrial Alliance") has decided to take an additional provision of $64.9 million ($43.4 million after tax) with respect to its investment in Norshield. This provision, added to that of $13.0 million ($8.7 million after tax) announced on November 2, 2005, brings the Company’s total provision in Norshield to $77.9 million, which corresponds to its entire investment in Norshield.

"As we announced in our news release of November 2, 2005, none of our clients will lose money in this affair," stated Yvon Charest, President and Chief Executive Officer of Industrial Alliance. "Long before the Richter report was tabled, we made sure that we protected the interests of our clients by transferring all amounts invested in Norshield funds to other funds, thereby substituting for them as investor in Norshield funds."

This provision does not in any way alter the financial solidity and flexibility that Industrial Alliance benefits from. Hence, Industrial Alliance’s solvency ratio would have reached 212% as at September 30, 2005, on a pro forma basis, compared with the 215% ratio published on that date. This ratio is still far above the Company’s 175% to 200% target range. Moreover, today the Company’s excess capital totals some $160 million, compared with about $200 million at the end of the third quarter.

In the last few months, the Company has also tightened its selection criteria for external fund managers. "We now require direct access at all times to the portfolio securities deposited with the custodian," explained Mr. Charest, "unless the fund managers are highly renowned institutions or have affiliations with large financial institutions. We are confident that these steps will enable us to prevent this type of situation from happening again."

" The posting of a maximum provision for Norshield, the protection that we have provided to our clients, as well as the new selection criteria that we have implemented for choosing external managers are reflections of a responsible and prudent company," Mr. Charest concluded. "We have always made it a point of honour to manage the Company conscientiously and we intend to continue ensuring the same management discipline in the future."

About Industrial Alliance

Founded in 1892, Industrial Alliance Insurance and Financial Services Inc. is a life and health insurance company that offers a wide range of life and health insurance products, savings and retirement plans, RRSPs, mutual and segregated funds, securities, auto and home insurance, mortgage loans and other financial products and services. The fifth largest life and health insurance company in Canada, Industrial Alliance is at the head of a large financial group – the Industrial Alliance Group – which has operations across Canada as well as in the Northwestern United States. Industrial Alliance insures over 1.7 million Canadians, employs more than 2,600 people and manages and administers $32.4 billion in assets. Industrial Alliance stock is listed on the Toronto Stock Exchange under the ticker symbol IAG. Industrial Alliance is among the 100 largest public companies in Canada.

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Jacques Carrière
Vice-President, Investor Relations
Office phone: (418) 684-5275
Cell phone: (418) 576-3624