Statement re Pre-close Period Trading Update

Chesnara plc ("Chesnara" or the "Company")

26 June 2006

Pre-close Period Trading Update

City of Westminster Assurance Part V11 Transfer approved

On 2 June 2005, Chesnara announced the acquisition of City of Westminster
Assurance Company Limited ("CWA") and is now pleased to advise that today Court
clearance was granted for the transfer of the long-term business of CWA into
Countrywide Assured plc, a subsidiary of Chesnara, pursuant to Part VII of the
Financial Services and Markets Act 2000 (the "Transfer").

As a result of synergies arising as a direct result of the Transfer, which were
not previously reflected in Chesnara's embedded value assumptions, the
completion of the Transfer is expected to have a positive effect on the
financial position and results of the Company for the six-month financial
period ending 30 June 2006.

It should also be noted that changes in the results and reported financial
position of the Company, as reflected in information which is supplementary to
financial reporting in accordance with IFRS, are likely to arise following the
decision to begin presenting the results and financial position of the Company
in accordance with European Embedded Value methodology. The effect of these
changes on the Company's Embedded Value will be in lieu of the Achieved Profit
basis of reporting and it is intended to implement them with effect from the
six-month financial period ending 30 June 2006.

The Board currently believes that the above changes, taken as a whole, will
have a marginally positive effect on the Company's embedded value and
shareholders should await the publication of the Company's Interim Results in
September 2006 for a full and detailed analysis of the effects of these
changes.

Commenting on the Court clearance, Graham Kettleborough, Chief Executive of
Chesnara plc, said:

"We are very pleased with the outcome of our application to transfer the
business of CWA into our subsidiary, Countrywide Assured plc. We are encouraged
by the progress we have made towards integrating CWA and expect the additional
synergies generated to assist us in maintaining a strong dividend yield for our
shareholders."

Endowment Claims

The Company has previously made significant increases to the provisions which
it maintains in respect of its exposure to claims for mortgage endowment
misselling redress. These provisions are sensitive, inter alia, to the number
of claims received and to the actual and projected performance of investment
markets. Notwithstanding recent weakness in equity markets and recent public
announcements by other companies of their exposure to the continuing activities
of complaints handling firms, the Company believes that there will be no net
significant adjustment to these provisions at 30 June 2006, either in respect
of experience for the six months ending on that date or in respect of forward
projections from that date.

Recent Stock Market Volatility

The Company's results are sensitive to investment market performance, as it
derives a significant part of its profits from periodic charges to the
unit-linked funds under management, such charges being related to the value of
those funds. While there has recently been significant weakness in global
equity markets, particularly in the second quarter of 2006, the impact of
investment market performance on the Company's results and financial position
in respect of the six months ending 30 June 2006 is expected to be broadly
neutral, taking the period as a whole.

Notification of Results

The interim results of the Company for the six month period ending 30 June 2006
will be announced on 6 September 2006.

For further information please contact:

Graham Kettleborough      Chief Executive          
                                                   
                          [phone]     
                                                   
Ken Romney                Finance Director         
                                                   
                          [phone]     
                                                   
Michael Henman            Cubitt Consulting        
                                                   
                          [phone]