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Contact:   Jeanne Hotchkiss      Dawn Dover/Mark Semer       Mike Paulter
           Orion Capital         Kekst and Company           Guaranty National
           860-674-6754          212-521-4800                303-754-8701

           ORION CAPITAL CORPORATION AND GUARANTY NATIONAL CORPORATION
                            ANNOUNCE MERGER AGREEMENT

            - Orion to Commence Tender Offer for Approximately 19% of
                   Guaranty National It Does Not Already Own -

NEW YORK, OCTOBER 31, 1997 - Orion Capital Corporation (NYSE: OC) and Guaranty
National Corporation (NYSE: GNC) today announced that their respective Boards of
Directors have approved an agreement providing for the merger of Guaranty
National into a wholly-owned Subsidiary of Orion. Under the agreement reached
today, the merger will take place following the completion of an Orion tender
offer for the approximately 2.9 million shares of Guaranty National common stock
that it doesn't already own for $36 per share in cash. The Guaranty National
Board approved this transaction following a recommendation by a committee
consisting of its independent directors. Orion currently owns approximately 81%
of the outstanding stock of Guaranty National.

It is currently expected that the tender offer will expire during the first week
of December 1997, unless extended. The registration statement Orion filed with
the Securities and Exchange Commission on September 22, 1997 with respect to an
exchange offer to acquire the outstanding Guaranty National shares for $34 per
share in cash and Orion common stock will be withdrawn as a result of this
agreement.

The terms and conditions of the offer will be set forth in tender offer
materials to be filed shortly with the Securities and Exchange Commission, and
to be mailed promptly to Guaranty National shareholders. The Dealer Manager for
the offer is Donaldson Lufkin & Jenrette Securities Corporation.

Guaranty National is a Colorado-based property and casualty insurance holding
company with operating subsidiaries which write private passenger automobile
insurance, as well as specialty commercial automobile, collateral protection and
other commercial coverages. The Company is a leading provider of nonstandard
personal automobile insurance written through independent agents.

Orion Capital is engaged in the specialty property and casualty insurance
business through wholly-owned subsidiaries which include EBI Companies, DPIC
Companies, Connecticut Specialty, and Wm. H. McGee, as well as through its 81%
ownership interest in Guaranty National Corporation.

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