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Issuance of a $100 Million Debenture underwritten by the Solidarity Fund QFL

Quebec City,

News Release

Industrial Alliance Insurance and Financial Services Inc. ("Industrial Alliance" or "the Company") announced today the issuance, through its wholly-owned subsidiary Corporation Financière L’Excellence Ltée, of a $100 million unsecured subordinated debenture. This debenture was underwritten by the Solidarity Fund QFL, a development capital corporation.

Corporation Financière L’Excellence Ltée is a company which controls Excellence Life Insurance Company and the brokerage companies with which it is associated. These companies were acquired by Industrial Alliance on January 31, 2008.

The debenture was issued on August 1, 2008. It has a duration of fifteen years and matures on August 1, 2023. A first tranche of $12 million will be used to refinance the debenture issued to the Solidarity Fund QFL by Corporation Financière L’Excellence Ltée in 2006, and underwritten by the Solidarity Fund QFL, whereas a second tranche of $88 million will be used for the general corporate purposes of Corporation Financière L’Excellence Ltée and to finance Industrial Alliance subsidiaries operating in the individual wealth management and insurance sectors.

The $12 million tranche pays a fixed annual rate of 7% for the first five years, a fixed annual rate of 5.630% for the next five years and a variable annual rate (adjusted on the last day of each quarter) equal to the 90-day Bankers' Acceptance Rate, plus 100 basis points, for the last five years. The additional tranche of $88 million pays a fixed annual rate of 5.630% for the first ten years, and a variable annual rate (adjusted on the last day of each quarter) equal to the 90-day Bankers' Acceptance Rate, plus 100 basis points, for the last five years.

Corporation Financière L’Excellence Ltée cannot redeem the debenture prior to its tenth anniversary, after which time, with the approval of the Autorité des marchés financiers, it will be able to redeem it in whole only, without penalty. The Solidarity Fund QFL cannot require the reimbursement of the debenture before it matures, except in particular circumstances and subject to approval by the Autorité des marchés financiers, which allows Industrial Alliance to qualify the debenture as Tier 2 capital on a consolidated basis.

According to pro forma data as at June 30, 2008, the debenture increases Industrial Alliance's solvency ratio from 185% to 195%. The debt ratio increases from 14.2% to 17.9%, if the debentures alone are included in the debt items, and from 19.8% to 23.2%, if the preferred shares are added. The excess capital will increase from $100 million to $198 million.

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 fourth largest life and health insurance company in Canada, Industrial Alliance is at the head of a large financial group, which has operations across Canada as well as in the Western United States. Industrial Alliance contributes to the financial wellbeing of over 3 million Canadians, employs more than 3,300 people and manages and administers over $51 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.

About the Solidarity Fund QFL
With net assets of $7.3 billion as at May 31, 2008, the Solidarity Fund QFL is a development capital company that through its RRSP channels the savings of Quebecers into investments in all sectors of the economy to help create and maintain jobs and to further Québec's economic growth. The Fund is a partner, either directly or through its network members, in 1,881 companies. It currently has more than 575,000 shareholders and has helped, on its own or with other financial partners, to create, maintain and protect over 126,000 jobs. For more information, visit

Forward-looking Statements
This news release may contain forward-looking statements about the operations, objectives and strategies of Industrial Alliance, as well as its financial situation and performance. The forward-looking nature of these statements can generally, though not always, be identified by the use of words such as "may," "expect," "anticipate," "intend," "believe," "estimate," "feel," "continue," or other similar expressions, in the affirmative, negative or conditional. Unless otherwise indicated, any forward-looking information that presents prospective results of operations, financial position or cash flows was approved by management on the date of this news release.

Forward-looking statements entail risks and uncertainties that may cause the actual results, performance or achievements of Industrial Alliance to differ materially from the future results, performance or achievements expressed or implied by the forward-looking statements. Factors that could cause the Company’s actual results to differ from expected results include changes in government regulations or tax laws, competition, technological changes, global capital market activity, interest rates, changes in demographic data, changes in consumer behaviour and demand for the Company’s products and services, catastrophic events, and general economic conditions in Canada or elsewhere in the world. A description of significant factors that could affect forward-looking statements is contained in the Management’s Discussion and Analysis section of the Company’s most recent annual report.

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. Where the forward-looking statements are presented as guidance regarding the future financial results of Industrial Alliance, they are provided to help investors understand the impact on earnings of the Company’s current plans and objectives. The Company may also provide objectives from time to time. An objective should be taken as a statement of management’s goals in managing the Company, and not necessarily as a forecast that the objective will be met.

Industrial Alliance is not obligated to revise or update these forward-looking statements to reflect events, circumstances or situations that occur after the date of this news release, whether foreseeable or not, except as required by applicable securities legislation.

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Michel Naud
Manager, Investor Relations
Industrial Alliance Insurance and Financial Services Inc.
Telephone: 418 684-5000, ext. 4137

Mario Tremblay
Vice-President, Public Affairs and Communications
Solidarity Fund QFL
Telephone: 514 850-4892