PRESS RELEASE

Contact:
PETER RESNIK, TREASURER AND CORPORATE COMMUNICATIONS OFFICER
ARM FINANCIAL GROUP, INC.
(502) 582-7946
E-MAIL: corpinfo@armfinancial.com


      ARM FINANCIAL GROUP, INC. ANNOUNCES CLOSING OF
      REINSURANCE RECAPTURE TRANSACTION


PR NEWSWIRE - RELEASED 4:26 PM

Louisville, KY, August 3, 1999 - ARM Financial Group, Inc. (NYSE: ARM) announced
today that its subsidiary, Integrity Life Insurance Company, has closed the
reinsurance recapture agreement with General American Life Insurance Company
involving approximately $3.5 billion of assets and associated liabilities under
the terms previously announced last week. The Company views the completion of
this transaction as an important step in preparing for its potential sale.

The Company stated that there could be no assurance that a transaction for the
sale of the Company would be developed or consummated or as to the price or
value that might be obtained.

The Company was subject to a covenant in its credit agreement prior to closing
that required it to pay off, renegotiate or obtain a waiver with respect to $38
million of bank debt. To expedite the closing process, ARM has secured new debt
financing of $38 million to repay in full its outstanding bank debt and
terminate its revolving line of credit with its syndicate of lenders. The
Company has provided the bank agent the required irrevocable notice to terminate
the lending commitment and paid the agent the proceeds under the outstanding
loan today.

Under the terms of the new financing, the debt will mature on the later of (1)
90 days, or if an agreement to sell the Company is executed within the 90 day
period, (2) upon the closing date of the sale. At maturity the unpaid principal
and all accrued interest is due and payable, unless the parties agree to extend
the date.

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This document may include Forward-Looking Statements (as defined in the Private
Securities Litigation Reform Act of 1995) regarding the Company's growth and
earnings prospects. The accuracy of these statements is subject to a number of
business factors beyond our control, as periodically described in our SEC
filings. For further information, investors are referred to the section entitled
Forward-Looking Statements of the Company's most recent Form 10-K, which
statements, to the extent applicable, are incorporated into this press release.

ARM Financial Group, Inc. (www.armfinancial.com) specializes in the growing
asset accumulation business with particular emphasis on retirement savings and
investment products. ARM Financial Group provides annuities and maintains
guaranteed investment contracts through its insurance subsidiaries, Integrity
Life Insurance Company and National Integrity Life Insurance Company. Retail
face-amount certificates are issued through SBM Certificate Company and
institutional certificates are maintained through ARM Face-Amount Certificate
Group. ARM Securities Corporation provides broker and product support. ARM
Financial Group, Inc. is headquartered in Louisville, Kentucky.


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