September 26, 2007

(Allentown, PA) Penn Treaty American Corporation (NYSE: PTA), a leading long–term care insurance provider, has become the first in the industry to promote brain fitness as a tool to enrich its clients’ lives. This move is part of a greater wellness initiative promoting healthy physical and mental fitness that the Company expects could revolutionize the long–term care insurance industry.

Penn Treaty is offering thousands of its policyholders the opportunity to try a computer–based mental exercise program created by Posit Science Corporation and hailed as one of the “medical breakthroughs of the year” by CNBC. The program guides users through a series of listen–and–respond exercises designed to improve memory, strengthen communication, and sharpen thinking, with the ultimate goal of delaying the onset of dementia–based impairment.

“We believe that each of our policyholders wants to maintain their independence and health well into their senior years,” said Stephen R. La Pierre, Senior Vice President of Penn Treaty. “We need to be more than just a financial safety net if your health declines; insurers also have a responsibility to coach policyholders in ways of living longer, healthier lives.”

La Pierre says dementia and Alzheimer’s disease are the most extensive and costly causes of long–term care insurance claims. A proactive cognitive health program can give policyholders the tools they need to actively address their concerns of developing dementia. Such a program may also reduce the frequency and length of future cognitive claims.

“Scientific evidence convinced us that the Brain Fitness Program from Posit Science Corporation could really improve the cognitive abilities of many of our policyholders,” La Pierre said.

In recently published studies, participants using the Brain Fitness Program showed statistically and clinically significant gains on standard cognitive batteries, while participants in control groups showed minimal or no gains. The gains are equivalent to 10 or more years of improved cognitive function (such as ability to remember and faster processing speed) among populations over age 60.

“Penn Treaty was one of the first providers to offer long–term care insurance more than 35 years ago, and continues to be a true leader in this industry,” said Jeff Zimman, CEO of Posit Science.

Penn Treaty wants their policyholders to have the opportunity to enjoy healthy, independent lifestyles well into their retirement years through an emphasis on wellness. The Brain Fitness Program is the first component of Penn Treaty’s comprehensive menu of wellness services and programs, which will be rolled out over the next year.

Dawn Helwig, Consulting Actuary at Milliman USA, Inc. and an expert in long–term care insurance products, said “The use of Posit Sciences’ tools in the long–term care market is intriguing. If a significant percentage of people with long–term care insurance were to improve their cognitive skills in the manner indicated, the impact on the insurers’ bottom line would be significant.”

“The message that our customers will hear increasingly from us is that we care about their long–term health and we are devoting resources to being a positive coach in that regard,” La Pierre said. “We are known already for effectively insuring individuals of higher risks. We are now complimenting that strength by offering our policyholders wellness programs that may enable them to lead longer, healthier and independent lives.”