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Pethealth Inc. Announces U.S. Insurance Underwriting Agreement

OAKVILLE, ON, February 9, 2006. Pethealth Inc. (“Pethealth” or “the Company”) (TSX-V: PTZ) today announced that it has entered into an agreement with Insurance Corporation of Hannover (“ICH”). Subject to regulatory approval, ICH will underwrite the Company’s pet insurance programs in 24 U.S. states including New York, New Jersey, Florida, Pennsylvania and Massachusetts. This is the first time that the Company’s pet insurance programs will be made available to pet owners residing in Massachusetts

The Company’s pet insurance programs in the remaining 26 states including California, Texas, Illinois, Michigan and Ohio will continue to be underwritten by Lincoln General Insurance Company (“Lincoln”), a subsidiary of Kingsway Financial Services Inc. Lincoln continues to be a valued partner and has been underwriting the Company’s programs since the Company began writing pet insurance policies in the United States in May 2001.

Under the terms of the agreement with ICH, the Company will participate in a portion of the underwriting results of those policies placed with ICH. The Company expects to begin placing business with ICH in March 2006.

“We are delighted to have completed this agreement,” said Glen Tennison, Chief Financial Officer of Pethealth. “This is an important step towards the fulfilment of the Company’s plans to participate in the underwriting results of its U.S. programs through a captive insurance company. Previously, we have stated that additional capital may be required in association with taking on U.S. underwriting risk. However, given the structure of this agreement with ICH, we do not anticipate needing to raise additional capital related to this venture for at least the next 12 to 18 months.”

About Insurance Corporation of Hannover

ICH is a wholly-owned subsidiary of Praetorian Financial Group, Inc., whose ultimate parent is Hannover Re, one of the five largest reinsurers in the world. As a specialty insurer, ICH focuses on niche programs that require unique coverage forms and underwriting expertise. As part of Praetorian, ICH has earned the A.M. Best rating of A- (Excellent).  

About Pethealth

Pethealth is a leading provider of pet insurance and pet related data management services to the North American companion animal industry. Pethealth offers a unique range of products and services for veterinarians, shelters and pet owners through a number of wholly owned subsidiaries using a range of brand names including PetCare, ShelterCare, CherryBlue, 24PetWatch and PetPoint.

Pethealth is based in Oakville, Ontario. To find out more about Pethealth Inc. (TSXV: PTZ), visit the web site at www.pethealthinc.com.

The TSX Venture Exchange Inc. has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Statements contained in this news release, if not historical, are forward-looking statements, which involve risks and uncertainties that could cause actual results to differ materially from the results described in forward-looking statements.

Not for dissemination in the United States of America or to United States news wire services.

For further information contact:

Glen Tennison, Chief Financial Officer
Pethealth Inc.
(905) 842-2615

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