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Industrial Alliance takes up 444,250 additional Clarington shares as offer expires

Quebec City,

News Release

Industrial Alliance Insurance and Financial Services Inc. ("Industrial Alliance" or "the Company") announced that it has today taken up 444,250 additional common shares of Clarington Corporation ("Clarington") deposited during the extension of its purchase offer, which expired today. These additional shares, together with those previously acquired by Industrial Alliance, brings the total number of Clarington common shares held by Industrial Alliance to 14,534,263, which represents approximately 98.24% of Clarington’s issued and outstanding common shares. As Industrial Alliance has acquired over 90% of the Clarington shares pursuant to the purchase offer, it now plans to exercise its rights with respect to the compulsory acquisition of the Clarington shares not yet held by Industrial Alliance. The Company will issue a notice to this effect in accordance with applicable legislation.

On December 29, 2005, Industrial Alliance announced that it was extending its purchase offer from 5:00 p.m. (Toronto time) on December 28, 2005 to 5:00 p.m. (Toronto time) on January 10, 2006 for shareholders who had not yet deposited their Clarington shares. Industrial Alliance will pay for a portion of the additional Clarington shares that were deposited during the extension period through the means of a share exchange to those Clarington shareholders who elected to receive Industrial Alliance shares rather than a cash amount. Since the proportion of Industrial Alliance common shares requested in exchange for Clarington shares exceeds the maximum of 25% of the purchase price provided for under the terms of the purchase offer, Clarington shareholders who deposited Clarington shares during the extension period will receive 56.99% of the Industrial Alliance common shares they have requested. 

The share exchange ratio used to calculate the number of Industrial Alliance common shares to be issued was 0.5325 Industrial Alliance common shares for each Clarington common share. Industrial Alliance will therefore issue 59,134 of its common shares in connection with the share exchange. This new issue of Industrial Alliance shares will bring the total number of common shares issued by the Company pursuant to the purchase offer to 1,780,119. 

Industrial Alliance intends to use its Normal Course Issuer Bid to repurchase all Industrial Alliance common shares issued as a result of the share exchange, which will act to minimize any dilution to its own shareholders. The repurchasing of shares will be conducted as quickly as possible according to internal Company policies, market conditions, and subject to the 2% per month limitation imposed by the TSX. 

Forward-Looking Statements 

This news release may contain forward-looking statements about the operations, objectives and strategies of Industrial Alliance Insurance and Financial Services Inc., as well as its financial situation and performance. These statements can generally be identified by the use of words such as "may," "expect," "anticipate," "intend," "believe," "estimate," "feel," "continue," or other similar expressions, in the affirmative or negative. These statements are subject to risks and uncertainties that may cause actual results to differ materially from those expressed or implied by the forward-looking statements. Factors that could cause actual results to differ materially from the Company’s expectations include changes in government regulations or in tax laws, competition, technological changes, global capital market activity, interest rates, changes in demographic data, changes in consumer demand for the Company’s products and services, catastrophic events and general economic conditions in Canada or elsewhere in the world. This list is not exhaustive of the factors that may affect any of Industrial Alliance’s forward-looking statements. These and other factors must be examined carefully and readers should not place undue reliance on Industrial Alliance’s forward-looking statements. 

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 over $32 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. 

This press release is not an offer of securities for sale in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from registration. Any public offering of securities that may be made in the United States will be made by means of a prospectus that may be obtained from the issuer and that will contain detailed information about the company and management, as well as financial statements. The issuer intends to register the proposed offer in the United States under the Securities Act of 1933, as amended. 

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