===============================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                               ------------------

                                 SCHEDULE 14D-1
                               (AMENDMENT NO. 13)

              TENDER OFFER STATEMENT PURSUANT TO SECTION 14(d)(1)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                               ------------------

                     AMERICAN BANKERS INSURANCE GROUP, INC.

                               ------------------

                           (NAME OF SUBJECT COMPANY)

                            SEASON ACQUISITION CORP.
                              CENDANT CORPORATION

                               ------------------

                                   (Bidders)

                    COMMON STOCK, PAR VALUE $1.00 PER SHARE
           (INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)

                               ------------------

                         (Title of Class of Securities)

                                  024456 10 5

                               ------------------

                     (CUSIP Number of Class of Securities)

                             JAMES E. BUCKMAN, ESQ.
              SENIOR EXECUTIVE VICE PRESIDENT AND GENERAL COUNSEL
                              CENDANT CORPORATION
                                  6 SYLVAN WAY
                          PARSIPPANY, NEW JERSEY 07054
                           TELEPHONE: (973) 428-9700

            (Name, Address and Telephone Number of Person Authorized
          to Receive Notices and Communications on Behalf of Bidders)

                                WITH A COPY TO:
                                DAVID FOX, ESQ.
                             ERIC J. FRIEDMAN, ESQ.
                    SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
                                919 THIRD AVENUE
                            NEW YORK, NEW YORK 10022
                           TELEPHONE: (212) 735-3000

===============================================================================



   This Amendment No. 13 amends the Tender Offer Statement on Schedule 14D-1 
initially filed on January 27, 1998 (as amended, the "Schedule 14D-1") by 
Cendant Corporation, a Delaware corporation ("Parent"), and its wholly owned 
subsidiary, Season Acquisition Corp., a New Jersey corporation ("Purchaser"), 
relating to Purchaser's tender offer for 23,501,260 outstanding shares of 
common stock, par value $1.00 per share, of American Bankers Insurance Group, 
Inc., a Florida corporation (the "Company"). Unless otherwise defined herein, 
all capitalized terms used herein shall have the respective meanings given 
such terms in the Schedule 14D-1. 

ITEM 10. ADDITIONAL INFORMATION. 

   The information set forth in subsection (c) of the Schedule 14D-1 is
hereby amended and supplemented by the following information:

   The required waiting period under the HSR Act with respect to the Offer
expired on February 11, 1998. Acccordingly, Parent is free to consummate the
Proposed Merger at any time without any further requirements under the
HSR Act.

   Pursuant to the Competition Act of Canada, Parent submitted to the Director
of Investigation and Research (the "Director") a notification in respect of the
Offer on February 4, 1998. The Director has confirmed that the statutory 
waiting period expired on February 11, 1998. In addition, the Director has 
notified Parent of his view that there are not sufficient grounds to initiate 
proceedings with respect to the Offer and the Proposed Merger. Accordingly, 
Parent is permitted to consummate the Offer and the Proposed Merger at any time
without any further requirements under the Competition Act of Canada.

   The information set forth in subsection (e) of the Schedule 14D-1 is 
hereby amended and supplemented by the following information: 

   On February 17, 1998, AIG and AIGF filed an amended complaint in the 
action captioned, American International Group, Inc. and AIGF, Inc. v. 
Cendant Corp. and Season Acquisition Corp., C.A. No. 98-0247 (the "Amended 
AIG Complaint") against Parent and Purchaser. The Amended Complaint continues 
to allege that Parent and Purchaser purportedly made false and misleading 
statements or omissions in Parent and Purchaser's: (i) pre-tender offer 
conference call with analysts; (ii) Schedule 14D-1; and (iii) proxy 
statement being used by Parent to solicit votes against the Proposed AIG 
Merger. The Amended AIG Complaint essentially repeats the allegations in the
original AIG Complaint by alleging that Parent purportedly made false and
misleading statements relating to the following general categories: (i) the
equal regulatory footing of the two competing acquisition proposals; (ii)
Parent's expected cost savings that could be realized if Parent were to
acquire the Company; (iii) the Offer not being conditioned upon financing; and
(iv) Parent's alleged failure to disclose a possible business downturn. The
Amended AIG Compliant adds allegations that Parent purportedly failed to
disclose a material fact by not disclosing that it allegedly will violate state
insurance laws by holding proxies of Common Shares exceeding ten percent of the
outstanding Common Shares. The Amended AIG Complaint also continues to allege
violations of Sections 14(a) and 14(e) of the Exchange Act in addition to
alleging that Parent and Purchaser purportedly violated Section 14(a) of the
Exchange Act based upon a violation of Section 5 of the Securities Act.

   AIG and AIGF reiterated their request that the Court to enter judgment: 
(i) declaring that Parent and Purchaser have violated Sections 14(a) and 14(e)
of the Exchange Act; (ii) requiring Parent and Purchaser to make corrective
disclosures; (iii) enjoining Parent and Purchaser from further violating
Sections 14(a) and 14(e) of the Exchange Act; (iv) declaring that Parent and
Purchaser have violated Section 14(a) of the Exchange Act by violating Section
5 of the Securities Act; and (v) enjoining Parent and Purchaser from making any
statements regarding the Proposed AIG Merger or the Offer until a registration
statement has been filed under the Securities Act and a prospectus has been
delivered to the Company's shareholders. In the Amended AIG Complaint, AIG and
AIGF also ask the court to enter judgment: (i) enjoining parent and Purchaser
from holding or voting any proxies from the Company's shareholders to the
extent such proxies exceed ten percent of the Common Shares, without first
obtaining approval from the insurance departments of Arizona, Georgia, New
York, South Carolina, and Texas; (ii) requiring Parent and Purchaser to return
any proxies they have received or receive from the Company's shareholders prior
to making any corrective disclosures required by the Court; (iii) requiring
Parent and Purchaser to make corrective disclosure about their ability to hold
or vote proxies without obtaining regulatory approval; and (iv) enjoining
Parent and Purchaser from soliciting any proxies until a registration statement
has been filed under the Securities Act and a prospectus has been delivered to
the Company's shareholders.

   On February 17, 1998, AIG and AIGF also filed: (i) a motion for 
preliminary injunction, (ii) a memorandum of law in support of their motion 
for preliminary injunction, (iii) an emergency motion requesting a hearing on 
their motion for a preliminary injunction, (iv) a motion for expedited 
discovery with a supporting memorandum of law, (v) a request for documents 
from Parent and Purchaser, and (vi) a notice to take the deposition of one or 
more representatives of the Parent or Purchaser. In their motion for 
preliminary injunction, AIG and AIGF ask the Court for an order: (i) 
enjoining Parent and Purchaser from holding or voting any proxies from the 
Company's shareholders to the extent such proxies exceed ten percent of the 
Common Shares, without first obtaining approval from the insurance 
departments of Arizona, Georgia, New York, South Carolina, and Texas; (ii) 
requiring Parent and Purchaser to return any 

                                       2


proxies they have received or receive from the Company's shareholders prior 
to making any corrective disclosures required by the Court; (iii) requiring 
Parent and Purchaser to make corrective disclosures about their ability to 
hold or vote proxies without obtaining regulatory approval; and (iv) 
enjoining Parent and Purchaser from making any statements regarding the 
Proposed AIG Merger or the Offer, or from soliciting any proxies, until a 
registration statement has been filed under the Securities Act and a prospectus
has been delivered to the Company's shareholders.

   On February 18, 1998, Parent and Purchaser filed a motion to dismiss the
Amended AIG Complaint.

   Parent and Purchaser believe that the Amended AIG Complaint and the 
related motions are meritless, and they will continue to vigorously oppose 
AIG and AIGF's claims. 

   On February 17, 1998, in connection with Parent and Purchaser's
application for approval of the acquisition of a controlling interest in 
Bankers American Life Assurance Company (the "New York Domestic Insurer"),
a subsidiary of the Company (the "Parent New York Form A Proceedings") and
in connection with the application of AIG and AIGF for approval of their
proposed acquisition of a controlling interest in the New York Domestic
Insurer (the "AIG New York Form A Proceedings"), Parent and Purchaser filed
with the New York Department of Insurance (the "New York Department") a
petition and memorandum in support of Parent's and Purchaser's petition
(the "New York Petition") seeking: (1) to allow Parent and Purchaser to
intervene in the AIG New York Form A Proceedings; (2) to consolidate the
Parent New York Form A Proceedings with the AIG New York Form A Proceedings,
and (3) to schedule a hearing after the results of a vote of the Company's
shareholders are known. In these filings, Parent and Purchaser asserted
that they should be permitted to intervene in the AIG New York Form A
Proceedings because their substantial interests as a shareholder (in the case
of Parent) and competing acquiror of the Company will be affected by the AIG
New York Form A Proceedings. Parent and Purchaser also asserted that the
AIG New York Form A Proceedings raise substantial issues regarding whether
AIG's proposed acquisition of a controlling interest in the New York
Domestic Insurers should be approved by the New York Department, that these
issues should receive a thorough and complete review by the New York
Department, that Parent and Purchaser have a right to be heard on these issues,
and that the New York Department should therefore consolidate the Parent
New York Form A Proceedings with the AIG New York Form A Proceedings and
hear and decide the two proceedings simultaneously. Parent and Purchaser also
asserted that the hearing should occur after the Company's shareholders vote
on the Proposed AIG Merger. 

ITEM 11. MATERIAL TO BE FILED AS EXHIBITS. 

   Item 11 is hereby amended as follows: 

   (g)(16) Amended Complaint filed on February 17, 1998 against Parent and 
           Purchaser by AIG and AIGF in the United States District Court for 
           the Southern District of Florida, Miami Division. 

   (g)(17) Petition of Parent and Purchaser to Intervene and Consolidate and
           for a Hearing, filed on February 17, 1998 with the State of New York
           Department of Insurance.

   (g)(18) Motion to Dismiss the Amended AIG Complaint filed on February 18,
           1998 by Parent and Purchaser in the United States District Court for
           Southern District of Florida, Miami Division.

   (g)(19) Parent and Purchaser's Memorandum of Law in support of their Motion
           to Dimiss the Amended AIG Complaint.

   (g)(20) Purchaser's Response to the Company's Request for a Hearing by the 
           Florida Insurance Department, filed on February 18, 1998.


                                       3


                                   SIGNATURE

   After due inquiry and to the best of its knowledge and belief, the 
undersigned certifies that the information set forth in this statement is 
true, complete and correct. 

Dated: February 19, 1998 

                                          CENDANT CORPORATION 

                                          By: /s/ James E. Buckman 
                                              ------------------------------- 
                                              Name:  James E. Buckman 
                                              Title: Senior Executive Vice 
                                                     President and General
                                                     Counsel 


                                          SEASON ACQUISITION CORP. 

                                          By: /s/ James E. Buckman 
                                              ------------------------------- 
                                              Name:  James E. Buckman 
                                              Title: Executive Vice President 

                                       4


                                 EXHIBIT INDEX

EXHIBIT NO. 
- -----------
  (g)(16)     Amended Complaint filed on February 17, 1998 against Parent and
              Purchaser by AIG and AIGF in the United States District Court for
              the Southern District of Florida, Miami Division.

  (g)(17)     Petition of Parent and Purchaser to Intervene and Consolidate and
              for a hearing, filed on February 17, 1998 with the State of
              New York Department of Insurance.

  (g)(18)     Motion to Dismiss the Amended AIG Complaint filed on February 18,
              1998 by Parent and Purchaser in the United States District Court
              for Southern District of Florida, Miami Division.

  (g)(19)     Parent and Purchaser's Memorandum of Law in support of their
              Motion to Dimiss the Amended AIG Complaint.

  (g)(20)     Purchaser's Response to the Company's Request for a Hearing by 
              the Florida Insurance Department, filed on February 18, 1998.

                                       5


                          UNITED STATES DISTRICT COURT
                          SOUTHERN DISTRICT OF FLORIDA
                                MIAMI DIVISION


AMERICAN INTERNATIONAL GROUP, INC.;              Case No. 98-0247-CIV-GRAHAM 
AND AIGF, INC.,                                  Magistrate Judge Dube

      Plaintiffs,

v.

CENDANT CORPORATION; and
SEASON ACQUISITION CORP.,

            Defendants.

- ----------------------------------/

                        AMENDED COMPLAINT FOR DECLARATORY
                              AND INJUNCTIVE RELIEF

         Plaintiffs American International Group, Inc. ("AIG") and AIGF, Inc.
("AIGF") for their amended complaint against defendants Cendant Corporation
("Cendant") and Season Acquisition Corp. ("Season"), by and through their
undersigned attorneys, allege as follows:

                              NATURE OF THE ACTION

      1. On December 21, 1997, AIG, AIGF and American Bankers Insurance Group,
Inc. ("American Bankers"), a Florida corporation, entered into a merger
agreement (as amended, the "AIG Merger Agreement") which provides that American
Bankers will be merged with AIGF, a wholly-owned subsidiary of AIG (the "AIG
Merger"). The AIG Merger Agreement provides that each share of American Bankers
common stock will be exchanged in the AIG Merger for a



                                                   Case No. 98-0247-CIV-GRAHAM

portion of a share of AIG common stock (or, subject to specified limitations
and at the election of American Bankers common shareholders, cash) equal to
$47.00, with a total value of approximately $2.2 billion. The AIG Merger is
scheduled to be put to a vote of American Bankers' common shareholders on March
6, 1998 and preferred shareholders on March 4, 1998.

      2. On January 27, 1998, Cendant and Season, a wholly-owned subsidiary of
Cendant, announced an intention to commence a hostile tender offer (the
"Cendant Offer") to purchase up to 51% of the outstanding shares of American
Bankers for $58.00 per share. The purpose of the Cendant Offer and the proposed
second step merger between Cendant and American Bankers (the "Cendant Merger")
is to enable Cendant to acquire control of, and ultimately the entire equity
interest in, American Bankers.

      3. Since January 27, 1998, Cendant and Season have embarked upon a
campaign of misinformation by disseminating numerous false and misleading
statements to American Bankers' shareholders in violation of the federal
securities laws (in particular Sections 14(a) and 14(e) of the Securities 
Exchange Act of 1934, as amended ("Exchange Act")). On February 12, 1998, 
Cendant filed a definitive proxy statement containing false and misleading 
statements with the Securities and Exchange Commission ("SEC") and began to 
disseminate it to American Bankers' shareholders. Cendant and Season's conduct 
is designed to mislead American Bankers' shareholders and to induce them to 
vote against the AIG Merger by deceiving shareholders into believing that the 
Cendant Offer represents a real and unconditional alternative


                                      -2-



                                                   Case No. 98-0247-CIV-GRAHAM

to the AIG Merger worth $58.00 per share when, in fact, the Cendant Offer is
highly conditional and risky and, if consummated, would leave American Bankers'
shareholders holding extremely volatile Cendant common stock. Cendant also has
falsely represented to American Bankers' shareholders that a merger with
American Bankers would achieve $140 million in pre-tax synergies, and hence
would not dilute Cendant's per share earnings. As Cendant well knows, it cannot
achieve such inflated synergies. Cendant also has represented that it will
obtain the necessary regulatory approvals from state insurance departments in
substantially the same time frame as insurance regulatory approvals for the AIG
Merger. Cendant, which was formed by a merger a mere two months ago and has no
experience running an insurance company, knows that these statements are false
because state insurance departments will have to conduct a thorough
investigation into Cendant's financial condition, background and competence to
run an insurance company before allowing Cendant to acquire American Bankers.

      4. Cendant and Season's public filings also fail to disclose several
important and material facts. Critically, Cendant has failed to disclose that
its solicitation of proxies from American Bankers' shareholders will violate
state insurance laws if Cendant holds proxies for American Bankers' common
shares, that together with the 0.79% of American Bankers' common shares that
Cendant already owns, exceeds ten percent of American Bankers' outstanding
common shares. On February 12, 1998, Cendant began seeking proxies from
American Bankers' preferred and common shareholders to vote against the AIG
Merger at meetings scheduled on


                                      -3-



                                                   Case No. 98-0247-CIV-GRAHAM

March 4 and March 6, 1998. However, Cendant has failed to disclose to American
Bankers' shareholders and the marketplace that, under the laws of five of the
six states in which American Bankers' U.S. insurance subsidiaries are
domiciled, Cendant cannot hold (let alone vote) proxies representing 10% or
more of American Bankers' voting securities because holding such proxies is
presumed to be acquisition of "control" of American Bankers' insurance
subsidiaries and requires regulatory approval prior to acquisition of the
proxies. For example, in Georgia -- a state where Cendant must secure regulatory
approval for its proposed acquisition of control of American Bankers --
Section 33-13-1(3) of the Georgia Insurance Code presumes that "control" exists
if a person holds proxies representing 10% or more of the voting securities of
any other person. Arizona, South Carolina and Texas have similar statutory
prohibitions on holding proxies for 10% or more of an insurance company's
shares and the New York Department of Insurance has interpreted the New York
Insurance Code in the same way. Cendant has not obtained regulatory approval to
acquire control of American Bankers in any state (and in fact is far from
obtaining it).

      5. By soliciting proxies from all shareholders of American Bankers, when
at most it can hold proxies for 9.2% more of American Bankers common shares
without regulatory approval, and by failing to disclose that fact, Cendant has
sought to convince American Bankers' shareholders to forfeit their votes.
Neither Cendant's Schedule 14D-1, its proxy solicitation materials nor
Cendant's other communications to American Bankers' shareholders disclose these

                                      -4-



                                                   Case No. 98-0247-CIV-GRAHAM

vitally important and material facts. Nor does Cendant disclose that if it
violates such state insurance statutes, it may, in some cases, be subject to
enforcement proceedings and criminal sanctions. Indeed, a wilful violation of
the state insurance statutes during the statutory review period is itself
sufficient grounds to deny regulatory approval for Cendant's proposed
acquisition of American Bankers.

      6. The power that Cendant would have pursuant to vote its proxies to
cause American Bankers to reject the AIG merger and bring American Bankers to
its knees in the face of Cendant's hostile tender offer and to be sold,
inevitably, to Cendant is precisely the power to direct the policies of an
insurer that the state insurance holding company statutes seek to regulate.

      7. Furthermore, the Texas Cendant Form A (the form that an entity must
file with the state insurance departments in order to obtain regulatory
approval and the only Form A filed by Cendant with state insurance regulators
to which AIG currently has access) does not even seek prior approval for
holding or voting proxies as to 10% or more of the shares of either American
Bankers' common or preferred stock. AIG believes that Cendant's other Form A
filings similarly fail to disclose its solicitation of proxies for more than
10% of American Bankers shares. Thus, Cendant apparently has not even told the
state regulators that it is seeking to acquire and vote proxies in violation of
state law, which will make regulatory approval for Cendant's proposed
acquisition of American Bankers even less likely.


                                      -5-



                                                   Case No. 98-0247-CIV-GRAHAM

      8. AIG will be irreparably harmed by Cendant's conduct because (i) AIG's
rights under a voting agreement covering 8.6% of American Bankers' shares will
be diluted or made valueless by Cendant's deception of American Bankers'
shareholders; (ii) its rights under an option agreement it has exercised
(subject to regulatory approval) covering 19.9% of American Bankers' shares
will be irreparably injured if the AIG Merger is voted down because of
Cendant's deceptions and American Bankers is left at the mercy of Cendant; and
(iii) its rights under its merger agreement with American Bankers will be
irreparably injured. Absent injunctive relief requiring Cendant to stop
soliciting proxies until it obtains regulatory approval and corrective
disclosure is made, AIG and American Bankers' shareholders will be irreparably
injured. An injunction requiring prompt corrective disclosure and an order
halting Cendant from soliciting further proxies and promptly returning any
proxies it has received, is the only reasonable and proper means of ensuring
that American Bankers' shareholders are not deceived into giving their proxies
to Cendant and that the objective of the securities laws -- to promote fair
corporate suffrage -- is achieved. Significantly, American Bankers shareholders
may still vote for or against the AIG Merger -- and Cendant can attempt to
influence their votes -- either by voting in person at the shareholder meetings
or by checking the "yes" or "no" box on the proxy card circulated by American
Bankers.

      9. Cendant's false and misleading statements are not its only violations
of federal law. For more than two weeks, Cendant and its advisors have been
touting the Cendant Merger


                                      -6-



                                                   Case No. 98-0247-CIV-GRAHAM

- -- and the Cendant stock that will be issued in connection with it -- while
intentionally failing to file a registration statement with respect to the
Cendant stock. For example, Henry R. Silverman, Cendant's President and Chief
Executive Officer, stating during an analysts' conference call on January 27,
1998 that the Cendant offer was "clearly superior" to the AIG Merger and that
"[i]n total we've already identified about $140 million of pre-tax synergies
which is about 10 cents per Cendant share." Such statements can only be
relevant to someone who holds, or will hold, common stock of Cendant. These
statements infected and permeated the marketplace because they were picked up
by national and international newspapers and analysts. Section 5 of the
Securities Act of 1933, as amended (the "1933 Act"), prohibits any person from
selling or offering to sell securities without filing a registration
statement. 15 U.S.C. ss. 77e(a), (c). Such blatant violations of the 1933 Act,
which also subverts the proxy solicitation process, should not go unremedied.
Unless this court promptly issues an injunction halting Cendant and its
advisors from continuing to violate Section 5 of the 1933 Act, plaintiffs and
other American Bankers shareholders will continue to receive requests for
shareholder votes and offers to purchase Cendant common stock -- securities as
to which no registration statement has been filed under the federal securities
laws -- without the critical financial and other information required by the 
1933 Act in connection with a public offer of stock and by the Exchange Act 
for the solicitation of proxies. Despite being put on notice that its conduct 
violates the 1933 Act, Cendant has

                                      -7-



                                                   Case No. 98-0247-CIV-GRAHAM

brazenly continued to tout its stock without filing the registration statement
required by the federal securities laws.

      10. Because Cendant continues -- on a daily basis -- to mislead American
Bankers' shareholders, AIG must seek relief from this Court pursuant to
Sections 14(a) and 14(e) of the Exchange Act and the rules promulgated
thereunder.

                             JURISDICTION AND VENUE

      11. The claims asserted herein arise under Section 14(a) and 14(e) of the
Exchange Act, 15 U.S.C. ss.ss. 78n(a), and 78n(e), and the rules and
regulations promulgated thereunder. This court has jurisdiction over the action
pursuant to Section 27 of the Exchange Act, 15 U.S.C. ss. 78aa; 28 U.S.C. ss.
1331 (federal question); and 28 U.S.C. ss. 1367 (supplemental jurisdiction).

      12. Venue is proper in this judicial district pursuant to 28 U.S.C. 
ss. 1391 and 15 U.S.C. ss. 78aa. The claims asserted herein arose in this 
District, and the acts and transactions complained of have occurred, are 
occurring, and unless enjoined, will continue to occur in this District.

                                   THE PARTIES

      13. Plaintiff AIG is a corporation organized and existing under the laws
of the State of Delaware, with its principal place of business in New York. AIG
is a party to a voting agreement covering 8,265,626 American Bankers common
stock, and has exercised an option to purchase 19.9% of American Bankers common
stock, subject to obtaining regulatory approvals. AIG is a


                                      -8-



                                                   Case No. 98-0247-CIV-GRAHAM

holding company with a market capitalization as of December 31, 1997, of
approximately $76 billion, which through its subsidiaries is primarily engaged
in a broad range of insurance and insurance-related activities and financial
services in the United States and abroad. AIG has received Triple-A long term
debt ratings from the principal ratings agencies, Moody's and Standard &
Poor's.

      14. Plaintiff AIGF is a wholly-owned subsidiary of AIG and is a Florida
corporation newly-formed for the purpose of consummating the AIG Merger.

      15. Defendant Cendant is a corporation organized and existing under the
laws of the State of Delaware with its principal place of business located in
Parsippany, New Jersey. Cendant has not registered to do business in the state
of Florida. Cendant was formed on December 17, 1997 through the merger of HFS,
Inc. ("HFS"), a company involved in the lodging, rental car and other consumer
marketing businesses, and CUC International, Inc. ("CUC"), a company engaged in
direct marketing "membership clubs" to consumers. Cendant reports that it
"administers insurance package programs which are generally combined with
discount shopping and travel for credit union members." Cendant Texas Form A at
5 (Filed Jan. 27, 1998). What this actually means is that Cendant markets
accidental death and dismemberment and accident insurance policies for
insurance companies such as Hartford, Cigna and US Life. Cendant has no
experience in running an insurance company. Indeed, Cendant


                                      -9-



                                                   Case No. 98-0247-CIV-GRAHAM

acknowledges that it primarily engages in three business segments: membership
services, travel and real estate -- none of which is related to insurance.

      16. On January 27, 1998, Cendant publicly announced that defendant
Season, a wholly owned subsidiary of Cendant, had commenced a tender offer to
purchase 51% of the outstanding common shares of American Bankers, with the
remaining 49% of the shares to be acquired through a second-step merger. Season
is a New Jersey corporation with its principal place of business also in
Parsippany, New Jersey.

                                BACKGROUND FACTS

The AIG Merger.

      17. Between August and December 1997 representatives of AIG and American
Bankers exchanged financial and other information and discussed the possible
expense savings, revenue enhancement and business opportunities in connection
with a possible business combination. In particular, AIG and American Bankers
discussed the benefits to American Bankers of AIG's Triple-A ratings and the
enormous opportunities potentially available to American Bankers in combining
with AIG's substantial and successful insurance operations outside of North
America.

      18. On December 19, 1997, the board of directors of AIG approved the AIG
Merger Agreement pursuant to which each shareholder of American Bankers would
receive $47.00 in AIG common stock in exchange for each share of American
Bankers common stock. Under the


                                      -10-



                                                   Case No. 98-0247-CIV-GRAHAM

terms of the AIG Merger Agreement, American Bankers shareholders can elect to
receive $47 in cash instead of AIG common stock, subject to the condition that
the maximum aggregate amount of cash that AIG will pay to all holders of common
stock will be equal to 49.9% of the total value of the consideration paid to
all holders of American Bankers' common stock. If cash elections are made with
respect to more than 49.9% of the outstanding shares of common stock, AIG will
make cash payments on a pro rata basis.

      19. On December 21, 1997, the board of directors of American Bankers
unanimously approved the AIG Merger Agreement and resolved unanimously to
recommend that the shareholders of American Bankers (including holders of
American Bankers' preferred and common stock) vote for approval and adoption of
the AIG Merger Agreement. AIG and shareholders owning 3,389,300 shares of
American Bankers' common stock entered into a voting agreement providing, inter
alia, that the shares would be voted in favor of the AIG Merger.

      20. In a joint press release dated December 22, 1997, the respective
Chairmen of AIG and American Bankers each disclosed the benefits that would be
gained by a merger of the two corporations. Maurice R. Greenberg, Chairman of
AIG, stated:

            "We are very pleased to have reached this agreement to acquire
            American Bankers, a fine company with product lines that complement,
            but do not overlap those of AIG. American Bankers management shares
            the AIG philosophy of doing business and they have an outstanding
            reputation for product and service quality, as well as a strong
            financial record. Culturally and from a business standpoint, there
            is an excellent fit between our two organizations . . . . As part of
            AIG, American Bankers will be able


                                      -11-



                                                   Case No. 98-0247-CIV-GRAHAM

            to take advantage of AIG's relationships and global network to build
            its business of credit related insurance products marketed through
            financial institutions and other entities. Particularly overseas,
            AIG will be able to open significant new opportunities for American
            Bankers. AIG's top credit ratings should also provide an important
            benefit to American Bankers . . . ."

AIG to Acquire American Bankers Insurance Group for Stock Valued at $2.2
billion, PR Newswire, Dec. 22, 1997.

      21. In the same press release, the President and CEO of American Bankers,
Gerald N. Gaston, also made clear the benefits of AIG Merger to American
Bankers:

            "We are extremely pleased to have the opportunity for American
            Bankers to become a member of the AIG organization. This will
            create significant new opportunities for our clients, associates
            and employees. With AIG's excellent name recognition, financial
            strength and broad network, our clients will benefit from being
            associated with one of the world's leading providers of insurance
            and financial services. This is truly an outstanding result for
            both organizations."

Id.

      22. Analysts commented favorably on the AIG Merger and the benefits that
the transaction would afford to both AIG and American Bankers. Gloria Vogel, an
analyst at Advest Inc. said of the merger, "[t]he cross-selling opportunities
are terrific." AIG to Acquire American Bankers, Dallas Morning News, Dec. 23,
1997, at 4D. Ken Zuckerberg, a Moody's analyst, said:

            "[The Merger] allows American Bankers to leverage AIG's global
            network, and get access to their higher ratings. In an environment
            of soft property-casualty and limited US growth opportunities,
            consolidation makes sense."


                                      -12-



                                                   Case No. 98-0247-CIV-GRAHAM

John Authers, AIG to Acquire American Bankers Insurance, Fin. Times, Dec. 23,
1997 at 20. Cendant Surfaces With its Hostile Offer.

      23. Without any prior warning or notice, on January 27, 1998, Cendant,
through its President and Chief Executive Officer, Henry R. Silverman, and its
Chairman, Walter A. Forbes, wrote a letter (the "January 27 Letter") to the
American Bankers' board of directors and submitted a proposal to acquire
American Bankers for $58 per common share payable in cash and Cendant stock.
The January 27 Letter also announced that Cendant "will be commencing promptly
a cash tender offer directly to American Bankers' shareholders for 51% of
American Bankers' shares at a price of $58 per common share to be followed by a
second step merger in which shares of Cendant common stock with a fixed value
of $58 per share will be exchanged on a tax free basis for the balance of
American Bankers' common stock." Following Cendant's announcement, AIG gave
notice to American Bankers that it exercised its right to purchase 8,265,626
shares of American Bankers common stock, subject to regulatory approvals.

      24. Simultaneously with their acquisition proposal, Cendant and Season
commenced an action in the United States District Court for the Southern
District of Florida in which they named as defendants American Bankers, its
board of directors, AIG and AIGF alleging, among other things, that certain
terms of the AIG Merger Agreement and the AIG Merger constituted a breach of
fiduciary duty to Cendant -- allegedly a beneficial owner of 371,200 shares of
American Bankers common stock. The Complaint failed to disclose that Cendant
began


                                      -13-



                                                   Case No. 98-0247-CIV-GRAHAM

acquiring its shares on January 16, 1998, nearly one month after the conduct it
alleged constituted a breach of fiduciary duty.

Cendant Commences its Campaign of False and Misleading Statements and
Violations of the Federal Securities Laws.

      25. On January 27, 1998 -- before Cendant had filed any proxy or tender
offer materials or a registration statement in connection with the securities
that Cendant intended to offer in connection with the Cendant Merger --
Cendant's President and CEO, Henry Silverman, made a speech to analysts
announcing the Cendant Offer. Silverman told analysts:

            "[o]ur $58 offer price represents a 23% premium to that offer. We
            believe ABI shareholders will find our offer compelling, and clearly
            superior to AIG's."

      26. Silverman also made it clear that Cendant intended to conduct a proxy
contest to persuade American Bankers' shareholders to vote against the AIG
Merger:

            "We will also conduct a proxy contest right through the date of
            their meeting, if there ever is a meeting, to consider the AIG
            transaction. So, I would expect that shareholders could anticipate
            receiving communications from us in those two areas."

      27. During a January 27 analysts' conference call (the "January 27
Analysts Call"), Silverman made a number of statements that he knew to be
materially false and misleading and failed to disclose material facts. These
misleading disclosures were repeated in subsequent public filings and materials
disseminated to American Bankers' shareholders.

Cendant Misrepresents its Ability to Obtain Regulatory Approvals.

                                      -14-



                                                   Case No. 98-0247-CIV-GRAHAM

      28. During the January 27 Analysts Call, Silverman represented that
Cendant's bid to acquire American Bankers was on an

            "equal footing with AIG on the basis of timing, financial
            conditions or any other basis. These approvals usually take months
            to complete; therefore, AIG is essentially no further along than we
            are. In fact, we have already been approved in the past to write
            insurance in major states, including New York and Colorado, and we
            see no reason to believe that our applications in these states or
            in any other state or country will not [be] approved on a timely
            basis."

      29. Silverman's assertion that the timing of regulatory approvals for the
AIG Merger and the Cendant Merger was comparable and that both transactions
could close at the same time was knowingly false and misleading. In fact, the
regulatory approval process for the AIG Merger commenced in December 1997 and
is much further along than Cendant's efforts to obtain approval for its
proposed acquisition of American Bankers, which was announced more than one
month after the AIG Merger was announced. Furthermore, Silverman failed to
disclose that AIG -- which is in the business of writing insurance -- is more
likely to secure prompt insurance regulatory approval than Cendant, which
admittedly has no history of running insurance companies.

      30. Silverman's representation that Cendant will secure insurance
regulatory approval on the same time schedule as the AIG Merger is also false
and misleading because it ignores the fact that the state insurance regulatory
approval process creates a significant obstacle and hurdle to the Cendant
Merger. As Silverman well knows, the insurance regulatory approval process will

                                      -15-



                                                   Case No. 98-0247-CIV-GRAHAM

be a searching and thorough investigation into the background, experience and
financial condition of Cendant (and the people who manage it) in order to
determine whether the Cendant Merger is in the best interests of American
Bankers' policyholders. For at least the following reasons, none of which have
been fully disclosed to American Bankers' shareholders in any public filings or
elsewhere, it is clear that Cendant will find it difficult, if not impossible,
to secure prompt approval for the Cendant Merger from various state insurance
departments:

            a. Cendant, which was created just last December through the merger
      of CUC and HFS, is a company whose financial condition cannot be
      evaluated with any degree of confidence. Cendant has been so busy
      acquiring or agreeing to acquire companies that it has yet to produce pro
      forma financial statements showing what its financial condition would be
      after the American Bankers acquisition and its other pending
      acquisitions. State insurance departments will have to subject Cendant
      (and its predecessor corporations) to a lengthy and detailed financial
      review. As reported in the February 4, 1998 Miami Herald, Florida
      Insurance Commissioner Bill Nelson stated after meeting with Walter
      Forbes of Cendant:

                  in no way was he giving Cendant the department's "Good
                  Housekeeping Seal of Approval," he said. "What we want to see
                  is that people who want to do business in Florida meet
                  financial requirements and have the best interests of
                  consumers at heart," Nelson said.


                                      -16-



                                                   Case No. 98-0247-CIV-GRAHAM

      By contrast, AIG -- a company with sterling ratings and financial history
      -- will have no such issues in securing regulatory approval.

            b. Cendant -- and its predecessor HFS -- has grown by acquiring a
      variety of businesses that generate cash flows but have few tangible
      assets. Upon acquiring these businesses, HFS has sold the tangible assets
      it acquired (hotels, rental cars, etc.) and allocated a substantial
      percentage of the purchase price to "goodwill" and other "intangible"
      assets. For example, just three weeks ago Cendant confirmed that it was
      purchasing Jackson Hewitt, a tax preparation service, for $68 per share.
      Cendant allocated only $14 million of the purchase price to tangible
      assets, while allocating $450 million to goodwill -- an intangible asset.
      By allocating such substantial amounts of its cost of purchasing
      companies to good will and other intangible assets, HFS and Cendant have
      greatly inflated current earnings at the expense of future earnings.
      Cendant amortizes intangibles for as many as 40 years, which is far
      longer than generally permitted for franchise values, or for real assets
      (which must be depreciated over their useful lives -- e.g., 2 or 5
      years). Using a 40-year amortization, Cendant can recognize only
      one-quarter the annual amortization expense it would recognize if it used
      a ten-year amortization period. As of September 30, 1997, Cendant's total
      GAAP stockholders' equity was $4.6 billion and its GAAP balance sheet
      reflected $4.7 billion of goodwill and intangibles. Accordingly, Cendant
      had a tangible net worth of negative $0.1 billion.


                                      -17-



                                                   Case No. 98-0247-CIV-GRAHAM

      Were Cendant to acquire American Bankers, Cendant's stockholders' equity
      would increase to more than $5.9 billion and its net tangible net worth
      would decrease to negative $1.1 billion. State insurance departments will
      take care to determine whether it would be in the interests of American
      Bankers' policyholders to be insured by a company whose parent
      corporation has net tangible net worth of negative $1.1 billion.

            c. This growth-by-acquisition strategy and associated creation of
      huge amounts of intangible assets has clearly fueled HFS' market price,
      and has made acquisitions using HFS stock relatively cheap. Like a shark
      who has to keep swimming to avoid sinking, however, HFS's (and Cendant's)
      earnings can only keep growing as rapidly as they have if Cendant can
      continue to make newer and larger acquisitions. Once Cendant's cash
      flows, revenues and profits stop growing, its share price will drop from
      its lofty peak of 50 times inflated profits, acquisitions will become
      more expensive, earnings will decrease even more as amortization of
      goodwill and other intangibles drag down earnings no longer inflated by
      Cendant's creative acquisition and accounting strategy, with the
      inevitable toll on Cendant's inflated stock price. A September 9, 1996
      report in Forbes summarized Silverman's (and HFS's) potentially
      disastrous acquisition strategy:

                  "With Silverman's financial magic and business ingenuity in
                  full gear, HFS' earnings are likely to grow rapidly for
                  another year or two, but essentially he's playing a more
                  sophisticated version of the old


                                      -18-



                                                   Case No. 98-0247-CIV-GRAHAM

                  franchise game: The profits keep growing rapidly only so long
                  as Silverman can find new and larger businesses to buy and
                  convert to his swollen stock multiples. When the game slows,
                  as it inevitably will, the swollen earnings gains will begin
                  to shrink and around then the fancy multiples will go poof.
                  By then Henry Silverman, already worth some $600 million on
                  paper, will probably be even richer. Recent investors aren't
                  likely to fare as well."

      See Howard Rudnitsky, Henry the magician, Forbes, Sept. 9, 1996 at 99. (A
      copy of that article is annexed hereto as Exhibit A.) Silverman may
      already have started his exit from Cendant: on February 4, 1998 he sold
      approximately $60 million of Cendant stock, a fact Cendant has not yet
      disclosed to American Bankers' shareholders. Plainly, state insurance
      regulators will have to analyze Cendant's financial condition and
      accounting methodology carefully before approving an acquisition of
      American Bankers by Cendant. These accounting and financial issues simply
      do not exist in connection with the AIG Merger.

            d. Silverman, Cendant's President and Chief Executive Officer, has
      had a checkered business history. State insurance regulators will likely
      conduct a detailed investigation before giving Cendant and Silverman
      approval to acquire American Bankers. From 1982 through 1990, Silverman
      was president and chief executive of Reliance Capital Corp. ("Reliance
      Capital"), the leveraged buyout unit of the financier and corporate
      raider Saul Steinberg's Reliance Group Holdings. In this position,

                                      -19-



                                                   Case No. 98-0247-CIV-GRAHAM

      Silverman frequently used the highly leveraged, junk bond strategies of
      Michael Milken and his associates at Drexel Burnham Lambert, and
      participated in Milken's junk bond takeovers. On information and belief,
      among the investors investing with Reliance Capital was a partnership
      called Drexel Reliance Capital Group, which included Milken, Seema Boesky
      (Ivan Boesky's wife), Victor Posner, Carl Lindner, casino owner Steve
      Wynn and Thomas Spiegel of the failed Columbia Savings & Loan -- all
      associates of Milken and attendees (along with Silverman) at Milken's
      annual "Predators' Ball." Not surprisingly given this background,
      Silverman has been affiliated with a number of companies that have gone
      into bankruptcy shortly after his tenure ended. Silverman's business
      ethics have also been called into question by commentators. For example,
      one report described how he bought and sold the Days Inns motel chain
      three times in eight years:

                  "In the process, Silverman, 52, has feathered his own nest
            and made more than $100 million for his investors. Days Inns
            bondholders, though, have gotten bagged for hundreds of millions of
            dollars. You can't make an omelette without breaking someone's
            eggs."

      Allan Sloan, Once Again, It's Checkout Time; Silverman Selling Chain for
      Third Time, Newsday, Sept. 13, 1992, at 84; see also Howard Rudnitsky,
      Triple Dipper, Forbes, Nov. 25, 1995, at 171 ("Henry Silverman and his
      friends got rich while the bondholders of Days Inns lost their shirts.")
      (A copy of that article is annexed hereto as Exhibit B.)

                                      -20-



                                                   Case No. 98-0247-CIV-GRAHAM

            e. In reviewing applications for a change of control, according to
      the Model Insurance Holding Company System Regulatory Act, the criteria
      the insurance departments must consider include whether the "competence,
      experience and integrity of those persons who would control the operation
      of the insurer are such that it would not be in the interest of
      policyholders of the insurer and of the public to permit the merger or
      other acquisition of control." Regulators focus on the "competence,
      experience and integrity" of controlling persons because once they
      approve incompetent, inexperienced or dishonest controlling persons, they
      usually are left with only the power to salvage the insurers these people
      damage. The states in which Cendant will need to obtain regulatory
      approval for its proposed acquisition of American Bankers -- Florida,
      Arizona, Georgia, New York, South Carolina and Texas -- have the same or
      similar provisions regarding competence, experience and integrity. Henry
      Silverman, Cendant's President and Chief Executive Officer, will clearly
      be the subject of detailed scrutiny in light of his business history. For
      example, Silverman headed Convenience & Safety Corporation, which in the
      late 1970s sought the franchise for installing and selling advertising on
      bus stop shelters in New York City. After Convenience & Safety won the
      contract, the City of New York and a federal grand jury investigated the
      bidding. As reported in the New York Times, Jack E. Bronston, a New York
      State Senator and lawyer for Convenience & Safety, was indicted for mail
      fraud in connection with the bidding. A detailed report


                                      -21-



                                                   Case No. 98-0247-CIV-GRAHAM

      prepared by Stanley Lupkin, the New York City Commissioner of
      Investigations, stated that Silverman had refused to answer questions in
      the investigation by the City's Department of Investigation on the ground
      that answering questions might compel him to be a witness against
      himself. When Bronston was sentenced after his conviction for mail fraud,
      the federal prosecutors stated in their sentencing report that "[t]he two
      principals of [Convenience & Safety], its Chairman of the Board Saul P.
      Steinberg and its President Henry R. Silverman, refused to testify
      exercising their Fifth Amendment protection against self-incrimination,"
      and as a result "the complete parameters of Bronston's activities
      promoting [Convenience & Safety] . . . . are not yet known." In rebidding
      the bus shelter contract, Mayor Edward Koch of New York City specifically
      prohibited Silverman's company, Convenience & Safety, from participating
      in the bidding. Clearly, insurance regulators must look closely at the
      character and fitness of Mr. Silverman to control American Bankers.

            f. Based upon public information, including court filings, and news
      articles, at least the following facts have been reported about Mr.
      Silverman's association with four companies that ended up in bankruptcy:

            (i) Days Inns of America, Inc. Motel Chain: In 1984, Silverman's
      Reliance Capital acquired Atlanta-based Days Inns of America, which
      consisted of 300 motels, including 140 company-owned inns, from the Cecil
      Day estate for $570 million. Financing for the leveraged buyout came from
      $285 million in junk bonds issued by Drexel Burnham Lambert. Reliance
      Capital put just $16 million


                                      -22-



                                                   Case No. 98-0247-CIV-GRAHAM

      in equity into the deal. Among the investors who reportedly put up the
      additional capital to buy the chain was Drexel Reliance Capital Group.

            The head of Reliance, Saul Steinberg, placed Silverman at the helm
      of Days Inns. Silverman slashed the size of the corporate headquarters
      staff by more than half, sold all but about 20 of the company's motels to
      franchisees for $423 million, and initiated a franchising spree that
      tripled the size of the chain to 900 properties by 1990. The sale of the
      company's chain led some newspaper reporters to call Steinberg an
      "asset-stripper."

            In December 31, 1985, Reliance took Days Inns public, raising $25
      million for the company. But Reliance and the Milken partnership retained
      45% of the company's stock after the completion of the initial public
      offering.

            Days Inns was carrying a huge $535 million debt load with just $600
      million in total assets. In fact, debt was a constant theme at Days Inns
      while Silverman ran the company. After Reliance acquired the hotel chain
      in 1984, Days Inns always maintained between $455 million and $600
      million in long-term debt. Silverman constantly refinanced the debt,
      almost always with junk bonds issued by Drexel Burnham Lambert. Between
      1984 and 1989, Drexel issued almost $1 billion in junk bonds for Days
      Inns. The debt load was so heavy that Silverman joked to one interviewer
      that Days Inns was "like Mexico. We don't pay down debt, we just
      reschedule it."

            In November 1989, Reliance and its backers sold their interest in
      Days Inns to Tollman-Hundley Lodging, Corp. for $87 million, of which $8
      million was in cash and the rest in junk bonds from Drexel Burnham
      Lambert. Tollman-Hundley also agreed to assume the company's $620 million
      debt, for a total price of $765 million. According to the November 25,
      1991 edition of Forbes, Reliance made a profit of almost $60 million and
      Silverman's personal share of the profit amounted to $5 million. Reliance
      and Silverman escaped from Days Inns just in time. In 1990
      Tollman-Hundley could not refinance the company's mounting debt load and
      short amortization schedule. In September 1991, Days Inns filed for
      protection under Chapter 11 of the bankruptcy code.

            (ii) HFS Investment in Amre, Inc.: In the fall of 1995, HFS
      announced that it had invested in Amre, Inc., a Dallas-based installer of
      vinyl siding and roofs on homes. SEC filings show that HFS acquired a 2%
      equity stake in the company. With the deal, Amre began to sell its
      products under HFS' Century 21 brand name. Between the fall of 1995 and
      the spring of 1996, Amre's stock price


                                      -23-



                                                   Case No. 98-0247-CIV-GRAHAM

      rose from $5 a share to $28.75 a share. In the fall of 1995, a new
      management team, including three HFS officers, was brought in to run the
      company. In September 1996, the company sold 1.1 million shares of stock
      to the public at $16 a share.

            But in October 1996, the company announced that it had lost $10.9
      million in its third quarter. The company predicted a significant loss in
      the fourth quarter because of high marketing expenses and a low order
      backlog. On January 17, 1997, Amre filed for bankruptcy protection.
      Trading in the company's stock was suspended, with the stock being last
      quoted at 43.75 cents a share. HFS wrote off its investment in Amre,
      Inc., and took a charge of $9.5 million on amounts owed to HFS by Amre.

            (iii) Telemundo Group, Inc.: On December 24, 1986, Reliance Capital
      Group L.P. paid $283.5 million for 100% of the outstanding stock of John
      Blair & Co. which it later renamed Telemundo Group, Inc. ("Telemundo").
      The purchase was financed with $226 million in junk bonds issued by Drexel
      Burnham Lambert, Inc.

            As of August 1987, Reliance Capital Group L.P. controlled 85% of
      Telemundo shares outstanding. Henry Silverman served as Telemundo's
      chairman from October 1986 to January 1987 and then president and CEO
      from February 1987 to February 1990.

            Telemundo began buying broadcasting properties owned by Reliance.
      At the same time, the company began an accelerated program to dispose of
      virtually all the other assets it had inherited from John Blair & Co. In
      December 1986, Telemundo began systematically dismantling the company.
      "As a result, what might have been a billion-dollar corporation a few
      years away will end up with operations producing less than a hundred
      million dollars." Moving and Shaking at John Blair & Co., Broadcasting,
      Nov. 24, 1986, at 68.

            As of June 30, 1987, Telemundo owned and operated five
      Spanish-language television stations, and in 1988 purchased a
      Spanish-language television station in Texas and television facilities in
      Florida. In August 1990, Telemundo acquired an 85% equity interest in
      station in a San Antonio, Texas.

            Apparently, Telemundo never got off the ground financially. Saddled
      with $189 million in debt following Reliance's purchase of the company
      and the purchase of the formerly Reliance-owned Spanish-language
      television stations in Los Angeles and New


                                      -24-



                                                   Case No. 98-0247-CIV-GRAHAM

      York, the company lost $26.3 million in the first six months of 1987. In
      addition, the company had a working capital deficit of $48.4 million.

            By March 1987, a working capital deficit forced Telemundo to ask
      its bankers for a waiver on debt repayments. In August 1987, Telemundo
      issued 2 million shares of common stock and $220 million of Drexel issued
      junk bonds to the public. According to an August 10, 1987 Business Week
      article, "Telemundo owes so much while earning so little that it's paying
      out more in cash for interest than it makes." Robert Barker, Steinberg
      May Have Trouble Making Money in Spanish, August 10, 1987, at 29. As of
      December 31, 1987, the company was carrying long-term debt of $240.7
      million (more than three times revenues), up from $184.8 million a year
      previously. Telemundo's fortunes continued to decline and in 1990,
      Telemundo lost $11.9 million on sales of $127.8 million.

            Henry Silverman apparently left Reliance Capital Corp. in January
      1990 to become a general partner at the Blackstone Group in New York
      City, but he remained a director of Telemundo at least through May 2,
      1994.

            On January 15, 1992, Telemundo announced that it was developing a
      financial restructuring plan in order to reduce the company's $250
      million long-term debt. From that date onwards, Telemundo ceased making
      interest payments on its outstanding debt, and failed to make principal
      payments upon their maturity. As of mid-1993, Telemundo had defaulted on
      all of its debt, which totaled $309 million as of December 31, 1993.

            On June 8, 1993, Telemundo's creditors filed an involuntary
      petition under Chapter 11 of the Bankruptcy Code against Telemundo in
      U.S. Bankruptcy Court in New York City. On July 30, 1993, Telemundo
      consented to the entry of an order for relief under Chapter 11 of the
      federal bankruptcy statutes in U.S. Bankruptcy Court in New York City.

            (iv) Occidental Plaza Hotel: According to a July 14, 1997 article
      in the Miami Daily Business Review, in 1981 a group of investors led by
      Henry Silverman and Adrian Werner acquired the Occidental Plaza Hotel in
      Miami, Florida, for $8 million. Goldome Bank for Savings ("Goldome")
      foreclosed on the title in 1985 after loans on the property reached $14.9
      million.

            According to Dade County property records, on August 12, 1982,
      Adrian Werner sold the hotel to a Florida limited partnership called
      Dallas Parc Associates, Ltd.


                                      -25-



                                                   Case No. 98-0247-CIV-GRAHAM

      According to documents on file at the Florida Secretary of State's
      office, the officers and directors of Dallas Parc Associates, Inc. were
      Henry R. Silverman, Adrian B. Werner, and Peter F. Edelman.

            Property records show that Goldome foreclosed on the hotel
      property, which was still owned by Dallas Parc Associates, Ltd., on April
      18, 1984. In June 1994, Silverman and two of his partners filed an action
      in New York State court against their fourth partner to contribute to the
      deficiency judgment that was entered against the partnership in the
      Florida foreclosure action brought by Goldome and the Dime Savings Bank
      of New York.

            g. Silverman's association with Telemundo resulted in state and
      federal litigation in which courts made extremely adverse findings about
      Silverman and the companies with which he was associated:

            (i) Telemundo Pension Plan ERISA Violations: The 1987 purchase of
      Blair assets resulted in a 1990 federal action commenced by the John
      Blair Communication, Inc. Profit Sharing Plan alleging that the Telemundo
      Group Profit Sharing Plan, its committee and committee members, including
      Silverman, breached their fiduciary duties under the Employment
      Retirement Income Security Act of 1974, as amended ("ERISA"), 29 U.S.C.
      ss. 1001 et seq. Plaintiffs claimed, inter alia that defendants failed to
      credit appreciation of assets between the valuation date and the dates on
      which the transfer of plan assets was effected in connection with the
      acquisition. On June 15, 1994, the United States Court of Appeals for the
      Second Circuit held that the defendants -- including Henry Silverman --
      violated ss. 208 of ERISA and their fiduciary duties by failing to
      transfer gains between the valuation date and the dates of actual
      transfers. The Court also held that defendants -- including Henry
      Silverman -- violated ss. 404 of ERISA and their fiduciary duties by
      keeping for Telemundo's pension plan the surplus income earned during
      Telemundo's delay in transferring assets from an equity fund to a short
      term investment fund pursuant to elections of new plan members.

            (ii) Irregularities in Telemundo's Financial Statements: In 1988,
      John Blair Communications, Inc., the successor in interest to JHR
      Acquisition Corp., filed suit in New York State court, alleging that it
      had been defrauded by Henry


                                      -26-



                                                   Case No. 98-0247-CIV-GRAHAM

      Silverman, Telemundo Group, Inc., and others, including Telemundo's
      accountant, Touche Ross & Co., when it purchased Telemundo's television
      and entertainment ("TV Rep") operations.

            In its complaint, JHR alleged that prior to the sale of the TV Rep
      unit to JHR Acquisition, Silverman and two of his top deputies at
      Telemundo deliberately altered the revenue and expenses figures and made
      other fraudulent adjustments to the budget figures for the TV Rep unit,
      which inflated the unit's operating profit and cash flow figures. As a
      result, JHR Acquisition alleged that it spent more money to buy the unit
      than it was really worth.

            The defendants moved for summary judgment dismissing the action, but
      the trial court denied the motion as to all defendants except Touche Ross
      & Co. In reversing the trial court's decision and reinstating the action
      against Touche Ross, the Appellate Division found that "[t]he record
      reflects that the financial statements were indeed misleading and
      substantially inflated the value of [TV Rep's] divisions." John Blair
      Communications, Inc. v. Reliance Cap. Group, L.P., 549 N.Y.S. 2d 678, 679
      (App. Div. 1st Dep't 1990)

            After almost six years of court battles, the case was settled in
      January 1995, with Telemundo apparently paying the plaintiffs $26 million
      in notes and $3.87 million in cash.

            h. Insurance regulators want assurances that management obtaining
      control of insurance companies can manage them. Silverman's companies
      have been hit with allegations of poor management:

                  "After Silverman buys a company he slashes expenses and hits
                  the road to sign up independent operators and to entice
                  franchisees of other chains to switch flags. Then he sits
                  back to collect royalties of between 6% and 8.8% of room
                  revenues. Industry watchers criticize him for running
                  shlocky, unsafe hotels. 'Just show him a door, and he'll give
                  you a franchise' carps one critic."


                                      -27-



                                                     Case No. 98-0247-CIV-GRAHAM

      Faye Rice, Why Hotel Rates Won't Take Off -- Yet, Fortune, Oct. 4, 1993,
      at 125.

      According to a January 16, 1995 article in USA Today, critics of Silverman
      have said that "[I]n the drive for bigger profits. . . [Silverman] slowly
      damages hotel chains' reputations by selling franchises to hotels that
      don't meet standards. Over time, they say, travelers will lose faith in
      the chains because of bad experiences with individual hotels."

            i. Various published reports refer to decreases in quality of the
      lodging operations as a result of Cendant's franchising strategy, and
      quality complaints have increased as a result of Cendant's aggressive
      financing campaign. In 1994, the magazine Consumer Reports rated
      Cendant's Howard Johnson and Ramada chains the two worst chains in the
      moderately priced category. Previous Consumer Reports (September 1990)
      had rated Ramada as the third best and Howard Johnson as the fourth best
      chains in this category. One franchise holder, who owns three Super 8
      motels for HFS, was quoted by USA Today on January 16, 1995 as saying
      "Super 8 is a wonderful organization and (Silverman) is ruining it. At
      some point, Mr. Silverman will know when to get out and he'll leave the
      rest of the shareholders holding the bag." Plainly, Silverman's prior
      affiliation with companies that have gone into bankruptcy and allegations
      of poor management will be the subject of detailed investigation by state
      insurance regulators. No such issues exist with respect to approval of
      the AIG Merger by state insurance regulators.


                                      -28-



                                                     Case No. 98-0247-CIV-GRAHAM

            j. Cendant has limited experience in the business of insurance and
      clearly does not have the level and degree of experience of AIG. In one
      recent filing with the Texas State Insurance department, Cendant reports
      that it markets -- but does not underwrite -- accidental death and
      dismemberment and accident insurance policies. Cendant acknowledges that
      it "primarily engages in three business segments: membership services,
      travel and real estate" -- none of which is related to insurance. Indeed,
      Cendant has been publicly disdainful of the requirement that it be
      competent to run an insurance company, an attitude certain to concern
      insurance regulators. Walter Forbes of Cendant was reported in the
      February 4, 1998 Miami Herald as "refut[ing] the notion that to sell
      insurance you have to be in insurance":

                  "To us, its marketing. We're a direct marketer, and we're
                  getting more customers every day. Anybody can provide
                  insurance, but you've got to be able to sell it."

      Moreover, Cendant's recent proposed acquisition of an insurance company
      -- Providian Auto and Home Insurance Company ("Providian") -- does not
      increase Cendant's experience in the insurance business. First, Cendant
      has not completed the acquisition, and hence has no experience running
      Providian, only experience acquiring it: nobody doubts Henry Silverman's
      ability to acquire companies, only his ability to run them. Second,
      Providian and its property and casualty subsidiaries, "which
      predominately market personal automobile insurance through direct
      marketing channels"

                                      -29-



                                                     Case No. 98-0247-CIV-GRAHAM

      in 45 states and the District of Columbia, has a relatively narrow market
      presence. By contrast, AIG is a holding company which, through its
      subsidiaries, is primarily engaged in a broad range of insurance and
      insurance-related activities and financial services in the United States
      and abroad, including both general and life insurance operations. AIG's
      general insurance operations are among the largest in the United States,
      and its international property-casualty network and life insurance
      operations are the most extensive of any U.S.-based insurance holding
      company. State insurance regulators will have to examine Cendant's
      insurance experience carefully (and compare it to AIG's) before approving
      any merger with American Bankers.

Cendant Has Falsely Contended That It Can Achieve Outlandish Sales Growth and
"Synergies".

      31. During the January 27 Analysts Call, Silverman stated that: "We think
we can add several million new policies outside the U.S. over the next few
years." This statement is knowingly false because the addition of "several
million new policies" in just a "few years" outside the United States is a
virtually impossible task for a company that does not have an international
insurance marketing network and is not in the business of general and life
insurance. Silverman's statement was plainly designed to deceive shareholders
into thinking that Cendant is in the insurance business and that such a massive
task could be performed easily and without any problem in merely a "few years."

                                      -30-



                                                     Case No. 98-0247-CIV-GRAHAM

      32. During the January 27 Analysts Call, Silverman also stated that:

                  "And forward, the combination of our companies should result
            in considerable cost savings. While we expect to maintain ABI's
            operations substantially as they are today, direct marketing is a
            volume game. Direct mail, call center and telecommunications costs
            should all fall on a per-unit basis. In tele, we've already
            identified about $140 million of pre-tax synergies, which is about
            10 cents per Cendant share. Now, please note, this is (1) without
            any due diligence, and (2) assumes no reduction in head count or
            facilities. These gains come from using our distribution system to
            increase ABI's product penetration in the U.S. and in international
            markets"

      33. Silverman's representation that $140 million in pre-tax synergies
(mostly through increased revenues) would be achieved is knowingly false and
misleading. As Silverman well knows, increasing American Bankers' net premium
revenues necessarily increases certain expenses, such as commissions and
reserves for anticipated claims by holders of new American Bankers policies.
These costs alone have consistently averaged 80% of American Bankers' net
premium income over the last five years. Cendant cannot simply add potential
additional net premiums earned to American Bankers' existing revenues and 
characterize them as "synergies." Even accepting Silverman's unsupported 
statement that Cendant can increase American Bankers' net premiums without 
increasing operating expenses, a $130 million increase in net premiums
earned less commissions and provisions for claims would require that American
Bankers' net premiums earned increase by $650 million -- a 47% increase over
1996 net premiums earned. Silverman's claim that Cendant can achieve $140
million in synergies falsely assumes that


                                      -31-



                                                     Case No. 98-0247-CIV-GRAHAM

American Bankers will incur no corresponding increase in the number of claims
filed against the combined entity. Silverman and Cendant's "synergy" claim is
inflated and unachievable.

      34. Silverman's oral statements concerning synergies clearly constituted
an "offer to sell" Cendant stock to American Bankers' stockholders--for which a
registration statement should have been filed. Silverman's statements were
picked up by newspapers, newswires and analysts' reports and, thus, were
disseminated into the public domain. All of these reports repeated Silverman's
statement concerning $140 million in pre-tax synergies expected from the
Cendant Merger. An Article in the Wall Street Journal dated January 29, 1998,
confirmed how Silverman's oral statements concerning synergies could influence
market pricing, reporting: "one American Bankers' investor predicts the
offering price could climb above $60 per share based on Cendant's calculation
that it can achieve $140 million in pretax income from the operation."

Cendant Falsely Claims its Offer Has "No Financing or Other Significant
Conditions" And Is "On Equal Footing with AIG".

      35. Silverman further stated that "[w]e have no financing or other
 significant conditions, and we believe we are on equal footing with AIG in all
 relevant ways, including timing." Silverman knew his representation was false.
 The insurance regulatory approval process for the AIG Merger is much further
 along than the approval process for the proposed Cendant Merger. As noted
 above, Cendant is not in the business of underwriting insurance and

                                      -32-



                                                     Case No. 98-0247-CIV-GRAHAM

its financial condition and history is questionable; in short, the regulatory
approval process for the Cendant Merger will prove to be a far greater obstacle
than Silverman chose to disclose. Moreover, contrary to Silverman's statement,
the Cendant Offer is subject to a number of significant conditions, including
(i) a condition that certain provisions of the AIG Merger Agreement be
terminated or declared invalid; (ii) at least 51% of American Bankers' shares
must be tendered under the Cendant Offer on a fully diluted basis, (iii)
antitrust approval under the Hart-Scott-Rodino Act; (iv) 2/3 approval of
American Bankers' shareholders and majority approval of American Bankers'
shareholders or directors of the voting rights of the shares that Cendant
acquires under the Cendant Offer; (v) satisfaction of American Bankers'
supermajority vote specifying that 85% of shareholders approve the deal (which
condition will be satisfied if 75% of the directors approve the deal); (vi)
American Bankers' shareholder rights plan does not apply to the Cendant Offer;
(vii) AIG's option to purchase 19.9% of American Bankers' stock is not
exercised or is deemed to be invalid; and (viii) Cendant receives all the
required insurance regulatory approvals.

Cendant Commences its Tender Offer

      36. On January 28, 1998, Season and Cendant commenced the Cendant Offer
and filed a Tender Offer Statement on Schedule 14D-1. The Schedule 14D-1, which
was disseminated to American Bankers' shareholders, contained a number of
materially false and misleading statements and omissions and repeated several
misleading statements that Silverman


                                      -33-



                                                     Case No. 98-0247-CIV-GRAHAM

had made during the January 27 Analysts Call. Specifically, the Schedule 14D-1
disclosed that State Insurance Codes "provide certain statutory standards for
the approval of the acquisition of control of the Company [American Bankers].
The Insurance Codes, however, permit the Insurance Commissions discretion in
determining whether such standards have been met." (Cendant Schedule 14D-1 at
8, annexed hereto as Exhibit C) The Schedule 14D-1 failed, however, to disclose
that Cendant would find it difficult, if not impossible, to secure regulatory
approval, and the reasons why such approval would be difficult.

      37. The Schedule 14D-1 also stated that Season was making an offer to
purchase 51% of the "outstanding shares of American Bankers for $58.00 per
common share in cash." Upon receipt of 51% of American Bankers' shares, Cendant
proposed a tax-free merger pursuant to which each remaining share of American
Bankers stock would be "converted into shares of Cendant common stock having a
value of $58.00." (Cendant Preliminary Proxy Statement, Letter to American
Bankers Shareholders, annexed hereto as Exhibit D) The Schedule 14D-1, however,
states only that it is Cendant's "current intention" -- rather than binding
obligation -- to offer Cendant's common stock worth $58.00. Cendant should
clearly disclose exactly what stockholders will receive in the Cendant
Offering.

      38. Furthermore, although Cendant brashly asserts that it can issue any
amount of Cendant shares necessary to provide $58.00 in value on a given date,
it has never provided American Bankers shareholders with a pro forma
presentation of Cendant's earnings if it had to


                                      -34-



                                                     Case No. 98-0247-CIV-GRAHAM

issue such stock. It also failed to disclose the facts required to be disclosed
in a registration statement under Section 5 of the 1933 Act including the risk
factors affecting Cendant stock, its plan for American Bankers, pro forma
financial statements and projections, and the compensation arrangements that
have been permitted Henry Silverman (including disclosure of a sale by Mr.
Silverman of approximately $62 million in Cendant stock on February 5, 1998).
These are important and material facts that should be disclosed to American
Bankers' shareholders.

      39. The Schedule 14D-1 (and subsequent proxy materials) also repeatedly
claimed that American Bankers shareholders would receive $58.00 worth of cash
and stock. However, the Schedule 14D-1 failed to disclose that the partial
currency of the Cendant Merger -- Cendant's common stock -- is likely to be as
volatile as the stock of its predecessor HFS. Thus, the Schedule 14D-1 failed
to disclose that the $58.00 package of cash and securities may be worth much
less in the days and weeks after the Cendant Merger closes. Indeed, on March 7,
1997, Silverman admitted during a CNN interview that "as a CEO, you have to
deal with the ups and downs of people's emotional fortunes if you will, when
our share prices go up and down, and our stock has been extremely volatile."
Transcript from CNN Business Day, March 7, 1997. The potential volatility of
Cendant stock was most graphically illustrated in 1996 when, upon Silverman's
announcement that he intended to sell up to 5% of his stock, HFS' stock price
fell

                                      -35-



                                                     Case No. 98-0247-CIV-GRAHAM

by over 6%. A December 2, 1996 Business Week article highlighted the volatility
of HFS' stock:

            "Silverman's hold on his fortune is hardly rock solid. After its
            dizzying climb, the stock has become stunningly volatile. When
            Silverman disclosed on Sept. 3 that he might sell as much as 5% of
            his holdings each year for estate-planning purposes, the stock fell
            6.1% on fears he was reducing his role. (In fact, his compensation
            plan lets him earn more stock than he would cash out.) And since
            the PHH purchase, his biggest single deal, was announced, the stock
            has fallen nearly 13%, closing Nov. 19 at 63 5/8."

Joseph Weber, The Real Artist of the Deal, Business Week, Dec. 2, 1996, at 114.
(A copy of that article is annexed hereto as Exhibit E.) Neither the Schedule
14D-1 nor any of Cendant's public filings disclose the recent volatility of HFS
stock, Silverman's recent sale of $60 million in Cendant stock or potential
volatility of Cendant stock, and the serious risk that American Bankers'
shareholders may not get $58.00 per share immediately after the Cendant Merger
closes. These are precisely the types of risks required to be disclosed in a
Registration Statement under the 1933 Act.

      40. The Schedule 14D-1 prominently disclosed that the Cendant Offer is
"not conditioned upon purchaser obtaining financing." (Cendant Schedule 14D-1
at 7.) This statement is misleading because Cendant's acquisition company,
Season, plans to obtain funds for the acquisition from a capital contribution
from Cendant, which in turn plans to obtain such funds, in part, from available
lines of credit and a new $1.5 billion 364-day Revolving Credit Facility
pursuant to a commitment letter, dated January 23, 1998, among Cendant and a
third

                                      -36-



                                                     Case No. 98-0247-CIV-GRAHAM

party lender -- Chase Manhattan Bank -- and an affiliate of Chase Manhattan.
The lender's obligations under the commitment letter are subject to conditions,
including a condition that Chase Manhattan has received "execution and delivery
 . . . of definitive documentation. . . satisfactory to Chase and its counsel."
(Cendant Schedule 14D-1 Exhibit (b)(3) at 3.) Furthermore Chase's financing
"commitment" also is subject to its judgment that no event in the financial,
banking or capital markets will impair its syndication efforts. (Id.; see also
Cendant Schedule 14D-1 at 24.) Plainly, the suggestion that the Cendant Offer
is not conditioned on financing is misleading because Cendant's failure to
satisfy the lender's conditions will result in Cendant's inability to finance
the Cendant Offer.

      41. The Schedule 14D-1 further fails to disclose that a substantial
portion of Cendant's business is exposed to substantial risks of a business
downturn. Cendant's major lines of business -- motels, car rental, travel and
real estate brokerage -- have reached historic high levels after severe slumps
in the early 1990s. If economic activity slows in the United States, the
travel and travel-related businesses in which Cendant depends for its cash
flow will be affected disproportionally, with severe consequences for
Cendant's franchise revenues. Nor does the Schedule 14D-1 disclose that 
Cendant's mortgage business will be adversely affected by a continued decline in
interest rates. Furthermore, the Schedule 14D-1 fails to disclose that mortgage
prepayments and refinancings may shorten the recovery period for deferred
mortgage

                                      -37-



                                                     Case No. 98-0247-CIV-GRAHAM

issuance costs. Again, had Cendant filed a Registration Statement under the
1933 Act, it would have had to disclose the risks.

      42. Neither Cendant's Schedule 14D-1 (nor any subsequent public filings)
disclosed key and material information about Silverman, his checkered business
history, and his affiliation with entities that had declared bankruptcy just
after he left. (See paragraph 30 above). Nor did Cendant's Schedule 14D-1 (or
any other public filings) disclose or explain Cendant's and HFS's strategy of
acquiring businesses with strong cash flows but few tangible assets and the
importance of increased acquisitions of the same type in order to maintain
current high earnings. Thus, the Schedule 14D-1 (and Cendant's later filed
preliminary proxy materials) failed to disclose that a decrease in the number
of such acquisitions would create serious downward pressure on earnings.

Cendant Commences the Solicitation of Proxies Against the AIG Merger.

      43. On January 30, 1998, Cendant filed its preliminary proxy statement
("Cendant Preliminary Proxy Statement") with the SEC. Cendant filed a
subsequent preliminary proxy statement on February 10 and, on February 12, 1998
filed a definitive proxy statement that was mailed to American Bankers'
shareholders. (A copy of the Definitive Proxy Statement dated February 12, 1998
("the Proxy Statement") is annexed hereto as Exhibit F). The Proxy Statement
urged American Bankers' shareholders to vote against the AIG Merger and
repeated many of the misstatements and omissions previously disseminated by
Cendant.

                                      -38-



                                                     Case No. 98-0247-CIV-GRAHAM

      44. The Proxy Statement thus stated:

            The Cendant transaction offers a significantly higher value per
            American Bankers common share than the Proposed AIG Merger by
            giving you cash and/or stock with a combined per common share value
            of $58.00, representing a premium of $11.00 (in excess of 23%) over
            the Proposed AIG Merger.

(Proxy Statement, at Letter to American Bankers Stockholders dated February 12,
1998.) This statement is false and misleading because it implies that American
Bankers' shareholders are receiving a fixed value for their shares when in fact
they are receiving something far more speculative -- Cendant stock. If the
volatility of HFS stock is any indication, Cendant's stock will be extremely
volatile on a going forward basis.

      45. The Proxy Statement also refers to the fact that the board of
American Bankers agreed to pay AIG a termination fee of $66 million under
certain circumstances. Although Cendant states that "the AIG Termination Fee
constitutes a significant obstacle to your receiving the maximum value for your
Shares" (Proxy Statement at 13), the proxy materials fail to disclose that
termination fees are appropriate, customary and usual in such transactions and
that the $66 million fee is eminently reasonable in the context of a $2.2
billion transaction. Indeed, in responding to the question by a securities
analyst on January 27, 1998 whether the option to purchase 19.9% of American
Bankers' common stock or the termination fee would "create a problem for
Cendant in its acquisition of [American Bankers'] shares," Henry Silverman
responded:

                                      -39-



                                                     Case No. 98-0247-CIV-GRAHAM

                  "No, it's just money. The contract with ABI provides that AIG
                  is limited to the higher of the profit on their stock, if any,
                  or $66 million as a break-up fee . . . sorry, the lower of . .
                  . they're capped at $66 million. So really, it's just a
                  monetary issue."

Clearly, Cendant says what suits its purpose, even if what it proposes to say
to shareholders is exactly contradicted by what it tells its friends in the
financial community.

      46. Cendant's Proxy Statement sent to American Bankers' shareholders
charged that "[b]y entering into the AIG Lockup Option Agreement, your Board of
Directors has created a further obstacle to your receiving the maximum value
for your Shares and has agreed to dilute your equity in American Bankers or
pay money to AIG in certain circumstances involving a competing proposal to
acquire American Bankers at a price in excess of $47.00 per common share."
(Proxy Statement at 13.) However, Cendant has failed to disclose that lockup
options such as those at issue here have been found to be legal, valid and
have become customary in mergers and acquisitions transactions and that the
likelihood of a court declaring the lock up option invalid -- a condition to
the Cendant Offer -- is extremely low.

      47. In addition, the Proxy Statement failed to disclose that on February
6, 1998, Cendant and Season were sued by AIG and AIGF, Inc. in the United
States District Court for the Southern District of Florida for violating
Section 14(a) and 14(e) of the Exchange Act in connection with the solicitation
of votes from American Bankers' shareholders. American Bankers' shareholders 
would clearly find the fact that the entities that are soliciting their votes

                                      -40-



                                                     Case No. 98-0247-CIV-GRAHAM

have been sued for violating the federal securities laws in connection with
that solicitation effort to be material.

      48. The Proxy Statement urged American Bankers' shareholders to vote
against the AIG Merger and repeatedly touted the value of the Cendant Offer,
all in violation of Section 5 of the 1933 Act and Section 14(a) of the Exchange
Act. For example, there are references throughout the Proxy Statement (and its
predecessor preliminary proxy statements filed on February 10 and January 30,
1998) to the purported value of Cendant's Offer, including the value of its
stock, and comparisons of the value of its stock to the value of the
consideration to be paid in the AIG Merger. For example, the Proxy Statement
states:

            "o    A VOTE AGAINST THE PROPOSED AIG MERGER ALLOWS YOU THE
                  OPPORTUNITY TO RECEIVE GREATER VALUE FOR YOUR SHARES.

            The Cendant Offer would provide $58.00 per Common Share in cash and
            in the Proposed Cendant Merger each remaining Common Share would be
            converted into the number of shares of Cendant Common Stock having a
            value of $58.00 (as determined as of the time of the Proposed AIG
            Merger. . . ), representing a premium of $11.00 (in excess of 23%)
            over the per Common Share value of the Proposed AIG Merger.

            o     A VOTE AGAINST THE PROPOSED AIG MERGER SENDS A STRONG MESSAGE
                  TO AMERICAN BANKERS' BOARD OF DIRECTORS THAT YOU WANT TO
                  PRESERVE YOUR OPPORTUNITY TO ACCEPT THE CENDANT OFFER, WHICH
                  HAS SIGNIFICANTLY GREATER FINANCIAL VALUE THAN THE PROPOSED
                  AIG MERGER."

(Proxy Statement at 12.)


                                      -41-



                                                     Case No. 98-0247-CIV-GRAHAM

      49. Cendant's violations continue and American Bankers shareholders still
 do not have the benefit of a registration statement setting forth critical
 information about Cendant, a company formed only two months ago as a result of
 a merger between HFS Incorporated and CUC International. Clearly, Cendant
 wants to avoid informing American Bankers' shareholders of the substantial
 risks they would face if they had to accept Cendant shares in exchange for
 their American Bankers shares.

      50. Cendant's Proxy Statement confirms that Cendant intends to hold and
vote proxies of American Bankers' shareholders. Most states, including five out
of the six states in which American Bankers' insurance subsidiaries are
domiciled -- Arizona, Georgia, New York, South Carolina and Texas -- require
regulatory approval before a person can acquire "control" of an insurance
company; such states presume that "control" exists if a person holds proxies
representing a specific percentage or more of the voting securities of any
other person. See e.g., Ariz.Rev.Stat. ss. 20-481(3) (1996) ("[c]ontrol shall
be presumed to exist if any person, directly or indirectly, owns, controls,
holds with the power to vote or holds proxies representing ten percent or more
of the voting securities of any other person.") (emphasis supplied); Ga. Code
Ann. ss. 33-13-1(3) (1997) ("[c]ontrol shall be presumed to exist if any
person directly or indirectly owns, controls, holds with the power to vote, or
holds proxies representing 10 percent or more of the voting securities of any
other person.") (emphasis supplied); N.Y. Ins. Law ss. 1501(a)(2) (McKinney
1997) ("control shall be presumed to exist if any person directly or indirectly
owns,

                                      -42-



                                                     Case No. 98-0247-CIV-GRAHAM

controls or holds with the power to vote ten percent or more of the voting
securities of any other person.") (emphasis supplied); S.C. Code Ann. ss.
38-21-10(2) (1997) ("[c]ontrol is presumed to exist if any person, directly or
indirectly, owns, controls, hold with the power to vote, or holds proxies
representing ten percent or more of the voting securities of any other
person.")(emphasis supplied); Tex. Ins. Code Ann. ss. 21 49-1(2)(d) (1997)
("[c]ontrol shall be presumed to exist if any person, directly or indirectly,
or with members of the person's immediate family, owns, controls, or holds
with the power to vote, or if any person other than a corporate officer or
director of a person holds proxies representing, 10 percent or more of the
voting securities or authority of any other person.") (emphasis supplied).

      51. Neither Cendant's Schedule 14D-1 nor the Proxy Statement disclose
that Cendant cannot acquire or vote proxies representing 10% or more of
American Bankers voting securities without prior regulatory approval in five of
the six states in which American Bankers' insurance subsidiaries are domiciled.
Cendant knows it cannot hold or vote proxies representing 10% or more
of the votes of American Bankers shareholders without prior regulatory approval
- -- let alone vote those shares -- but has failed to disclose that fact because
it knows that if it told the truth American Bankers' shareholders would not
grant proxies to Cendant.

      52. Cendant is misleading American Bankers' by creating the false and
misleading impression that Cendant can hold and vote proxies without regulatory
approval. Unless Cendant halts its current proxy solicitation effort and makes
immediate corrective disclosure, Cendant


                                      -43-



                                                     Case No. 98-0247-CIV-GRAHAM

will continue to deceive American Bankers' shareholders into giving their
proxies to Cendant under the mistaken impression that Cendant can actually hold
and vote those proxies on March 4 and March 6, 1998 when, in fact, Cendant is
absolutely prohibited from doing so under state law unless it has regulatory
approval--which it does not. These shareholders will be disenfranchised in
exactly the manner that suits Cendant: their failure to vote will count as a
vote against the merger of AIG and American Bankers because approval of the AIG
Merger requires affirmative votes from a majority of the outstanding common and
preferred shares of American Bankers, not just a majority of shares that vote.
This Court cannot allow Cendant to intentionally deceive and mislead American
Bankers' shareholders in this fashion.

                                    COUNT ONE

                       (Section 14(a) of the Exchange Act)

      53. AIG and AIGF repeat and reallege paragraphs 1 through 52 as if set
forth herein.

      54. Section 14(a) of the Exchange Act provides that it is unlawful to use
the mails or any means or instrumentality of interstate commerce to solicit
proxies in contravention of any rule promulgated by the SEC. 15 U.S.C.
ss.78n(a).

      55. Rule 14a-9 provides in pertinent part:

            "No solicitation subject to this regulation shall be made by means
            of any . . . communication, written or oral, containing any
            statement which, at the time, and in light of the circumstances
            under which it is made, is false and misleading with respect to any
            material fact, or which omits to state any material fact necessary
            in order to make the statements therein not false or misleading...."

                                      -44-



                                                     Case No. 98-0247-CIV-GRAHAM

            17 C.F.R. ss.240.14a-9.

      56. Each of the false and misleading statements by Cendant, Season and
Silverman detailed above is a statement made under circumstances reasonably
calculated to result in the procurement of proxies or votes from American
Bankers shareholders. As such, those statements are subject to the strictures
of Section 14(a) and Rule 14a-9.

      57. Each of the false and misleading statements detailed above were and
are material to the decisions of American Bankers' shareholders concerning
whether to vote for or against the AIG Merger, since such false and misleading
statements are intended to suggest, and do suggest, that the AIG Merger is not
a viable or realistic transaction and is not in the best interest of American
Bankers' shareholders and that if American Bankers' shareholders vote to tender
their shares into the Cendant Offer, they will be voting for a superior
transaction. Furthermore Cendant's statements are materially false and
misleading because Cendant has purposefully failed to tell shareholders it
cannot hold or vote proxies that, together with the 0.79% of American Bankers
common shares that it already owns, represent more than 10% of American
Bankers' voting securities without violating state insurance laws.

      58. Cendant and Seasons made each of the false and misleading statements
detailed above intentionally and with knowledge of their falsity and misleading
nature for the purpose of inducing American Bankers' shareholders to vote
against the AIG Merger and tender their shares into the Cendant Offer.

                                      -45-



                                                     Case No. 98-0247-CIV-GRAHAM

      59. Cendant and Season's false and misleading statements described above
are essential links in defendants' efforts to consummate a combination of
Cendant with American Bankers at whatever cost to American Bankers'
shareholders and have injured -- and are continuing to injure -- AIG, AIGF and
American Bankers' other shareholders.

      60. AIG and AIGF have no adequate remedy at law.

                                    COUNT TWO

                       (Section 14(e) of the Exchange Act)

      61. AIG and AIGF repeat and reallege paragraphs 1 through 52 as if set
forth herein.

      62. Section 14(e) of the Exchange Act provides that:

            It shall be unlawful for any person to make any untrue statement of
            a material fact or omit to state any material fact necessary in
            order to make the statements made, in the light of the
            circumstances under which they are made, not misleading, or to
            engage in any fraudulent, deceptive, or manipulative acts or
            practices, in connection with any tender offer or request or
            invitation for tenders, or any solicitation of security holders in
            opposition to or in favor of any such offer, request, or
            invitation.

15 U.S.C. ss. 78n(e).

      63. Each of the false and misleading statements and omissions by Cendant,
Season and Silverman detailed above are statements made under circumstances
reasonably calculated to result in the tender of American Bankers shares from
American Bankers shareholders into the Cendant Offer. As such, those
statements are subject to the strictures of Section 14(e).


                                      -46-



                                                     Case No. 98-0247-CIV-GRAHAM

      64. Each of the false and misleading statements detailed above was and is
material to the decisions of American Bankers' shareholders concerning whether
to vote for or against the AIG Merger and to tender their shares into the
Cendant Offer, since such false and misleading statements are intended to
suggest, and do suggest, that the AIG Merger is not a viable or realistic
transaction and is not in the best interest of American Bankers' shareholders
and that if American Bankers' shareholders vote against the AIG Merger and
tender their shares into the Cendant Offer, they will be voting for a superior
transaction. Furthermore Cendant's statements are materially false and
misleading because Cendant has purposefully failed to tell shareholders it
cannot hold or vote proxies that, together with the 0.79% of American Bankers
common shares that it already owns, represent more than 10% of American
Bankers' voting securities without violating state insurance laws.

      65. Cendant and Seasons made each of the false and misleading statements
detailed above intentionally and with knowledge of their falsity and misleading
nature for the purpose of inducing American Bankers' shareholders to vote
against the AIG Merger and tender their shares into the Cendant Offer.

      66. Cendant and Season's false and misleading statements described above
are essential links in defendants' efforts to consummate a combination of
Cendant with American Bankers at whatever cost to American Bankers'
shareholders and have injured -- and are continuing to injure -- AIG, AIGF and
American Bankers' other shareholders.


                                      -47-



                                                     Case No. 98-0247-CIV-GRAHAM

            67. AIG and AIGF have no adequate remedy at law.

                                   COUNT THREE

(Section 14(a) of the Exchange Act based upon violation of Section 5 of the
1933 Act)

      68. AIG and AIGF repeat and reallege paragraphs 1 through 52 as if set
forth herein.

      69. Section 5 of the Securities Act of 1933 provides that --

            "a. Unless a registration statement is in effect as to a security,
      it shall be unlawful for any person, directly or indirectly:

                  (1) to make use of any means or instruments of transportation
            or communication in interstate commerce or of the mails to sell such
            security through the use or medium of any prospectus or otherwise;
            or

                  (2) to carry or cause to be carried through the mails or in
            interstate commerce, by any means or instruments of transportation,
            any such security for the purpose of sale or for delivery after
            sale.

                                   .    .    .

            c. It shall be unlawful for any person, directly or indirectly, to
      make use of any means or instruments of transportation or communication
      in interstate commerce or of the mails to offer to sell or offer to buy
      through the use or medium of any prospectus or otherwise any security,
      unless a registration statement has been filed as to such security, or
      while the registration statement is the subject of a refusal order or
      stop order or (prior to the effective date of the registration statement)
      any public proceeding or examination under Section [8]."

15 U.S.C. ss.ss. 77e(a) and (c).

      70. On November 7, 1997, the Division of Corporation Finance of the
Securities and Exchange Commission ("SEC") issued a release entitled "Current
Issues and Rulemaking


                                      -48-



                                                     Case No. 98-0247-CIV-GRAHAM

Projects" addressing the very circumstances presented here. See SEC Release
(Nov. 7, 1997) the ("SEC Release"). The SEC release unambiguously stated (with
emphasis added):

            In some cases involving a negotiated "friendly" merger or other
            business combination between a registrant and another entity (or
            person) that has been submitted to a shareholder vote, a third
            party may wish to present a competing proposal that would involve
            acceptance of the third party's securities as consideration (e.g.,
            through an exchange offer or merger). Before commencing its own,
            competing transaction, however, the third party may wish to solicit
            in opposition to the "friendly" transaction then pending before the
            target company's shareholders. In such a case, the third party
            should remain mindful that, depending on the facts and
            circumstances, communications regarding its "competing" bid may be
            deemed an "offer to sell" the third party's securities that
            triggers the application of the registration requirements of the
            Securities Act, particularly where such communications refer to the
            price and/or other material terms of the potential competing
            transaction.
                  . . . .

                  In cases where the third party's solicitations trigger
            compliance with the registration and prospectus delivery provisions
            of the Securities Act, the third party should file promptly its
            registration statement to cover the securities offering to target
            shareholders.

      71. Since January 27, 1998, Cendant and Silverman have made a number of
statements concerning the AIG Merger and the alleged superiority of the Cendant
Offer over the AIG Merger. Such statements included statements in press
releases, statements by Silverman made to analysts on January 27, the
Preliminary Proxy Statement filed with the SEC on January 30, 1998 and the
Proxy Statement disseminated to American Bankers' shareholders on February 12,
1998. Such statements were not merely limited to factual information about

                                      -49-



                                                     Case No. 98-0247-CIV-GRAHAM

Cendant and a brief description of the Cendant Offer and Cendant Merger, but
went much further and advocated the alleged superiority of the price being
offered by Cendant and other material terms of the proposed transaction.

      72. Silverman's oral statements during the January 27, 1998 analysts'
conference call concerning the alleged superiority of the Cendant Offer and the
expected synergies of $140 million were among the most egregious examples of
"offers to sell" Cendant stock without filing a registration statement in
violation of Section 5 of the 1933 Act. These oral statements clearly infected
the marketplace because they were picked up by national and international
newspapers and analysts. The fact that Cendant has chosen to make selective
disclosure of this kind of information which is only relevant to someone who
holds, or will hold, common stock of Cendant, without having to file a
registration statement strikes at the heart of the registration process.

      73. Cendant and Silverman's statements regarding the alleged superiority
of the Cendant Offer and their urging of American Bankers shareholders to vote
against the AIG Merger constituted an "offer to sell" the Cendant securities
that would be issued in connection with the Cendant Merger. However, Cendant
has failed to file a registration statement or to deliver a prospectus to
American Bankers' shareholders, with respect to those securities. Accordingly,
Cendant and Silverman have violated both Section 5 of the 1933 Act and Section
14(a) of the Exchange Act.


                                      -50-



                                                     Case No. 98-0247-CIV-GRAHAM

      74. AIG and American Bankers' shareholders have been injured by Cendant's
and Silverman's repeated and continued violations of Section 5 of the 1933 Act
and resultant violation of Section 14(a) of the Exchange Act.

      75. AIG and American Bankers' shareholders have no adequate remedy at law
and the Court should issue an order halting any reference by Cendant or Season
to the Cendant Offer or Cendant Merger until Cendant files a registration
statement and delivers a prospectus to American Bankers' shareholders.

      WHEREFORE, plaintiffs respectfully request that this Court enter judgment
as follows:

            Declaring that Cendant and Season have violated Sections 14(a) and
      14(e) of the Exchange Act and Rule 14a-9 promulgated thereunder and
      requiring that each of them make prompt corrective disclosures;

            Enjoining Cendant and Season, and their agents and employees,
      preliminarily and permanently, from further violating Sections 14(a) and
      14(e) of the Exchange Act and Rule 14a-9;

            Declaring that Cendant, Season, and their agents and employees have
      violated Section 14(a) of the Exchange Act through violating Section 5 of
      the 1933 Act by offering to sell securities without filing a registration
      statement;

            Enjoining defendants (or any of their agents or employees) from
      holding or voting any proxies from American Bankers' shareholders to the
      extent such proxies exceed 10%


                                      -51-



                                                     Case No. 98-0247-CIV-GRAHAM

      of American Bankers' common shares, without first obtaining approval from
      the insurance departments of Arizona, Georgia, New York, South Carolina
      and Texas; (ii) requiring defendants (or any of their agents or
      employees) to return any proxies they have received or receive from
      American Bankers' shareholders prior to making any corrective disclosures
      required by the Court; (iii) requiring defendants (or any of their agents
      or employees) to make corrective disclosure about their ability to hold
      or vote proxies without obtaining regulatory approval; and (iv) enjoining
      defendants (or any of their agents or employees) from making any
      statement regarding their proposal to purchase shares of American Bankers
      or the proposed merger between AIG and American Bankers, or from
      soliciting any proxies, until they file a Registration Statement pursuant
      to Section 5 of the Securities Act of 1933, and deliver a prospectus to
      American Bankers' shareholders;

            Awarding AIG and AIGF the costs and disbursements of this action
together with reasonable attorneys' fees; and


                                      -52-



                                                     Case No. 98-0247-CIV-GRAHAM

            Awarding AIG and AIGF such other and further relief as the Court
may deem just and proper.

Dated: February 16, 1998

                                       STEEL HECTOR & DAVIS LLP
                                       200 South Biscayne Boulevard, Suite 4000
                                       Miami, Florida 33131-2398 Of Counsel:
                                       (305) 557-2957 Telephone
                                       (305) 577-7001 Facsimile
Richard H. Klapper
Tariq Mundiya
Stephanie G. Wheeler                   By: /s/ Lewis F. Murphy
SULLIVAN & CROMWELL                        --------------------------- 
125 Broad Street                           Lewis F. Murphy, P.A. 
New York, New York 10004                   Florida Bar No. 308455 
(212) 558-4000
(212) 558-3588 Facsimile               Attorneys for Defendants
                                       American International Group, Inc.
                                       and AIGF, Inc.


                                      -53-


                             CERTIFICATE OF SERVICE

         I HEREBY CERTIFY that a true and correct copy of the foregoing
document was served on the 16th day of February 1998 on the following persons
in the manner specified below:

         BY FAX and FEDERAL EXPRESS

         Robert T. Wright
         Shutts & Bowen LLP
         1500 Miami Center
         201 South Biscayne Boulevard
         Miami, Florida 33131

         BY HAND

         Jonathan J. Lerner
         Skadden, Arps, Slate
         Meagher & Flom LLP
         919 Third Avenue
         New York, New York 10022


                                                 /s/ Tariq Mundiya
                                                ---------------------------
                                                     Tariq Mundiya



                               STATE OF NEW YORK
                            DEPARTMENT OF INSURANCE

IN RE STATEMENT REGARDING THE           )  No.                  
ACQUISITION OF CONTROL OF OR            )                       
MERGER WITH A DOMESTIC INSURER          )  PETITION OF CENDANT  
(FORM A) OF AMERICAN                    )  CORPORATION AND   
INTERNATIONAL GROUP, INC., A DELAWARE   )  SEASON ACQUISITION CORP.
CORPORATION, AND AIGF, INC., A          )  TO INTERVENE, TO  
FLORIDA CORPORATION, RELATING TO        )  CONSOLIDATE WITH RELATED
BANKERS AMERICAN LIFE ASSURANCE         )  PROCEEDING AND FOR A 
COMPANY, A DOMESTIC INSURER             )  HEARING              
                                    

                                  INTRODUCTION

         American International Group, Inc. and AIGF, Inc. (collectively,
"AIG") are seeking to acquire control of American Bankers Insurance Group, Inc.
and its subsidiaries, including Bankers American Life Assurance Company, a New
York domestic life insurer (collectively, "American Bankers"), on terms and
under circumstances that are inequitable to American Bankers' shareholders,
that may substantially lessen competition in the market for inland marine
insurance in New York, and that raise issues concerning the trustworthiness of
AIG and those persons who control AIG. AIG is intent on acquiring American
Bankers before American Bankers' shareholders can consider other alternatives,
including a superior offer from petitioner Season Acquisition Corp., a wholly
owned subsidiary of petitioner Cendant Corporation (collectively, "Cendant").



         Both AIG and Cendant currently have pending before the Department
applications for approval to acquire control of Bankers American Life Assurance
Company ("Bankers American") (the "AIG Form A" and the "Cendant Form A," 
respectively). Cendant seeks to intervene in AIG's Form A proceeding, 
consolidate that proceeding with Cendant's own Form A proceeding, and 
demonstrate to the Department that AIG's Form A application should not be 
approved. As explained in this petition, the circumstances surrounding AIG's 
proposed acquisition of American Bankers (at a price that is $500 million less 
than Cendant has offered to pay) are highly irregular and require the 
Department's careful scrutiny. Because a number of serious issues are raised by
AIG's application, each of which may require disapproval of AIG's application,
Cendant further requests that the Department hold a public hearing on AIG's
application, but only after the results of the shareholder vote on the proposed
AIG/American Bankers merger are known.

                              SUMMARY OF ARGUMENT

         In December 1997, after receiving a friendly inquiry from Cendant
regarding a possible business combination, American Bankers rushed to finalize
a merger agreement with AIG. A condition of the proposed merger required AIG to
submit to the Department its pending Form A application. In connection with the
proposed merger agreement, AIG offered to pay $47 per share for American
Bankers' common stock. AIG itself estimated the value of this transaction to be

                                       2



$2.2 billion. American Bankers' preferred and common shareholders are scheduled
to vote on the proposed merger on March 4 and 6, 1998, respectively.

         Fearing additional interest from other entities, including in
particular Cendant, AIG and American Bankers drafted into their agreement
provisions with an eye toward preventing American Bankers form entertaining or
consummating a combination with any other potential acquirer. These terms
include: (i) a "no shop" provision that expressly prohibits American Bankers
from soliciting, negotiating or entertaining competing offers for 120 days;
(ii) a lock-up option that gives AIG the right to purchase 19.9% of American
Bankers common stock, an amount that, together with a voting agreement with
certain of American Bankers' senior executives, may allow AIG to block any
competing merger bid; (iii) a 180-day non-termination period that prevents
American Bankers from terminating the merger agreement with AIG; and (iv) a
"break up" fee penalty provision that calls for American Bankers to pay AIG $66
million if the proposed merger fails to be consummated.

         A particularly egregious aspect, from the shareholders' perspective,
of the AIG/American Bankers merger agreement is the lock-up option, which gives
AIG an option to buy 19.9% of outstanding American Bankers' common stock no
matter how superior the terms of a competing bid may be to American Bankers'
shareholders and policyholders. The option is included in the merger agreement

                                       3



solely as a defensive weapon, attempting to guarantee the survival of the
AIG/American Bankers merger agreement even in the face of a superior rival
offer.

         On January 27, 1998, Cendant made a competing offer to purchase
American Bankers for $58 per share, for a total price of approximately $2.7
billion, or $500 million more than AIG's offer. Cendant's proposal for the
acquisition of Bankers American presently is the subject of a Form A
application before the Department, submitted on January 27, 1998.

         AIG sought immediately to foreclose Cendant's offer, seeking to
exercise the 19.9% lock-up option by hurriedly giving notice to American
Bankers of its intent to exercise the option. In public filings, AIG states
that it gave American Bankers the required notice to exercise the option,
which suggests that under its terms the option will have been exercised and
closed within mere days of the giving of notice. In fact, however, the option
cannot be exercised without the approval of American Bankers domiciliary
states, including New York, which approvals have not yet been obtained. The
statement's obvious intended effect is to give American Bankers' shareholders
and others the impression that the option has been exercised, thus making any
competing bids for American Bankers futile. That this is the only purpose of
the lock-up option is confirmed by the fact that, even if AIG does

                                       4



purchase the shares under the option, it may not vote them in favor of the
proposed merger.(1)

         AIG is further seeking to obtain an unfair advantage over Cendant by
publicly conveying the impression that regulatory approval of AIG's
applications in American Bankers' domiciliary states amounts to no more than a
rubber stamp, while asserting that Cendant will receive rigorous scrutiny from
those regulators and, ultimately, may not receive approval at all.(2) By making
these statements, AIG is attempting to coerce American Bankers' shareholders to
vote in favor of AIG's economically inferior offer by creating the perception
that the Department will delay, or ultimately deny, approval of Cendant's
application in hopes that this manufactured uncertainty will cause shareholders
to forego Cendant's favorable transaction.

- -------------
         (1) In a Form A application filed in Texas, AIG seeks separate and/or
alternative approval of the lock-up option. Appendix Tab A (Texas Form A at 3
(January 9, 1998) (without attachments) ("In addition to the acquisition of
control through the Merger as described above, this Statement of Acquisition
seeks the Department's approval (to the extent required) for any future
exercise of the full amount of the Option or any lesser amount which would
trigger the statutory prior approval threshold set forth in the Insurance
Code.")). Cendant believes (but does not know, because AIG's New York Form A
has not been publicly disclosed) that AIG seeks that same approval in its New
York Form A.

         (2) By way of example, AIG has stated in a complaint filed in federal
court in Florida that it is "likely to secure prompt insurance regulatory
approval" and that Cendant will "find it difficult, if not impossible, to
secure regulatory approval." Appendix Tab B (AIG complaint, dated February 5,
1998, at Paragraphs 24, 25).

                                       5



         The actions of AIG and American Bankers have been in obvious and
complete disregard of the interests of American Bankers' shareholders and
policyholders. Further, the impact in New York of these actions will be
significant and harmful. In particular, the proposed AIG/American Bankers
merger will likely substantially lessen competition in the market for inland
marine insurance in this state. Still further, it appears from other filings by
AIG and American Bankers that the Department has not been provided with all
information required in a Form A filing, including, specifically, information
about the identities and background of all persons who are controlling persons
of AIG and who would become controlling persons of American Bankers, in
particular Starr International Company, Inc., and, in turn, AIG's Chairman,
Maurice R. Greenberg, who controls AIG through his control of Starr
International Company, Inc., the Starr Foundation and C.V. Starr & Co. and,
among other things, their interlocking directorships.

         Each of the issues described above may require the Department to
disapprove AIG's application to acquire control of Bankers American. Under
these circumstances, the Department should schedule a hearing on AIG's Form A
Application. However, the hearing should not be held until such time as
American Bankers' shareholders have voted on the proposed AIG/American Bankers
merger and the results of the voting are known. This timing will permit the
Department and all parties who may participate in the hearing to avoid
expending valuable time and

                                       6



resources on what will essentially be a futile exercise should American
Bankers' shareholders not approve the proposed merger. Further still, holding a
hearing after the shareholder vote also will permit AIG's and Cendant's
positions to be considered by American Bankers' shareholders on an even
footing. Currently, AIG is attempting to seize unfair advantage over Cendant
by creating the distorted impression to shareholders that regulatory approval
of AIG's proposed transaction is imminent while approval for Cendant's proposal
will come only at some future time, if at all. A hearing on AIG's application
scheduled for after the shareholder vote, combined with consolidation of and
simultaneous decision on AIG' and Cendant's applications, will prevent AIG
from gaining unfair advantage of its improper and presumptuous public
statements.

         Moreover, in order to permit the matters raised by AIG's Form A
application to receive a thorough and complete review by the Department,
Cendant seeks: (i) permission to intervene in the process of the Department's
review of AIG's Form A application to ensure that a full and fair proceeding
may be organized, scheduled and conducted; (ii) consolidation of this
proceeding with the proceeding to approve the Cendant Form A application; and
(iii) the grant of a hearing on AIG's application to be scheduled after the
results of the vote of Amer ican Bankers' shareholders on the proposed
AIG/American Bankers merger are known. Only under these conditions can the
Department be assured that it is basing

                                       7



its determination on the fullest and fairest record possible. After all, in
passing on the acquisition of a domestic insurer, this Department must act as
far more than an "umpire blandly calling balls and strikes." In re Application
of American Re-Insurance Co., 47 A.D. 517, 363 N.Y.S.2d 593 (1st Dep't), app.
denied, 37 N.Y.705, 374 N.Y.S.2d 1026 (1975).

                                     FACTS

      1. THE PARTIES.

         Petitioner Cendant Corporation, a Delaware corporation headquartered
in Stamford, Connecticut and Parsippany, New Jersey, is a global provider of
direct marketing and other services to consumers in the travel, real estate and
insurance industries through its many subsidiaries, which include Days Inns of
America, Inc., Century 21 Real Estate Corporation, Coldwell Banker Corporation,
Ramada Franchise Systems, Inc., Super 8 Motels, Inc. and Resort Condominiums
International, Inc. Cendant Corporation is the beneficial owner of 371,200
shares of American Bankers common stock and 99,900 shares of American Bankers
preferred stock. Petitioner Season Acquisition Corp., a wholly owned subsidiary
of Cendant Corporation, is a New Jersey corporation with its principal offices
in Parsippany, New Jersey.

         AIG is a Delaware corporation with its principal executive office in
New York, New York. AIG is an intermediate holding company engaged primarily

                                       8



in the general and life insurance businesses in the United States and abroad.
AIGF is a Florida corporation and a wholly owned subsidiary of AIG.

         Upon information and belief, AIG is controlled by Starr International
Company, Inc. (which owns 16.1% of AIG's outstanding common stock) and, in 
turn, by its Chairman, Maurice R. Greenberg. Mr. Greenberg controls 
approximately 25% of the outstanding shares of AIG common stock through: 
(i) individual ownership of 2.3% of AIG's common stock; (ii) control of Starr 
International Company, Inc., The Starr Foundation, and C.V. Starr & Co.
(private companies that own 16.1%, 3.6% and 2.4% of AIG's outstanding common
stock, respectively); and (iii) the use of interlocking directorships. Appendix
Tab C (AIG's Schedule 14A dated April 4, 1997).

         American Bankers is a Florida corporation with its principal place of
business in Miami, Florida. Through its insurer subsidiaries, American Bankers
is an insurer providing primarily credit-related insurance products in the
United States, Canada, Latin America, the Caribbean and the United Kingdom.
American Bankers' insurance products are sold primarily through financial
institutions and other entities that provide consumer financing as a regular
part of their business. Bankers American Life Assurance Company is a New York
domiciled life insurance company.

                                       9



      2. THE AIG/AMERICAN BANKERS MERGER AGREEMENT.

         On December 22, 1997, AIG and American Bankers announced that they had
entered into a merger agreement whereby AIG, through its wholly owned
subsidiary AIGF, would acquire 100% of the outstanding capital stock of
American Bankers in exchange for a combination of AIG stock and cash valued at
$47 per common share and merge American Bankers into AIGF. Appendix Tab D
(AIG's press release announcing the proposed transaction). American Bankers'
shareholders are scheduled to vote on the proposed merger on March 4 and 6,
1998.

         As discussed above, among the arsenal of defensive weapons built into
the agreement to insure a sale to AIG is a lock-up option that grants AIG the
right to purchase 19.9% of the shares of American Bankers common stock. AIG has
admitted in a Form S-4 filed with the SEC that its purchase of these shares
"may delay or make more difficult an acquisition of American Bankers by a
person other than AIG," "could have the effect of making an acquisition of
American Bankers by a third party more costly" and "could also jeopardize the
ability of a third party to acquire American Bankers in a transaction accounted
for as a pooling of interests." Appendix Tab E (AIG's Form S-4 without
attachments).

         AIG and American Bankers have estimated the total value of their
proposed transaction to be approximately $2.2 billion dollars. The merger 
agreement's one-sided lock-up option, no-shop provision, non-termination 
period and

                                       10



break-up fee are specifically designed to prevent American Bankers from seeking
or agreeing to a better deal for its shareholders and policyholders.

      3. THE CENDANT OFFER.

         Months before American Bankers and AIG announced their merger
agreement, Cendant contacted the president of American Bankers hoping to
discuss Cendant's serious interest in acquiring American Bankers:

         "Several months ago one of our senior executives had discussed with
         [American Bankers President and CEO] Mr. Gaston our interest in
         pursuing a business combination with American Bankers. As recently as
         December [of 1997], in response to our inquiry as to whether American
         Bankers was engaged in discussions relating to an acquisition and to
         our expression of Cendant's strong interest in exploring such a 
         transaction with American Bankers, Mr. Gaston said that American 
         Bankers was not pursuing any acquisition transaction, and suggested 
         that he meet with our se nior executive in early January to discuss 
         the matter further ...." (Emphasis added).

Appendix Tab F (January 27, 1998 Letter of Henry Silverman, Chief Executive
Officer, Cendant Corporation, and Walter Forbes, Chairman, Cendant Corporation,
to American Bankers' Board of Directors).

         American Bankers refused to engage in any discussions with Cendant
and, despite the fact that it had assured Cendant otherwise, American Bankers
was actively negotiating a merger with AIG. Indeed, American Bankers has not
negoti ated with any party other than AIG to seek the best price for the
benefit of American

                                       11



Bankers' shareholders and has bound itself to a lock-up provision intended to
render futile any superior merger bids.

         On January 27, 1998, Cendant made a competing offer to purchase
American Bankers at a price of $58 per share, for a total package worth 
approximately $2.7 billion dollars - $500 million dollars more than offered by 
AIG. Appendix Tab G (Cendant's press release); Cendant Form A, Ex. A-1 
(Season's tender offer).

      4. AIG'S NEW YORK FORM A APPLICATION.

         Cendant believes that AIG and AIGF have filed with the Department a
Statement Regarding the Acquisition of Control of or Merger with a Domestic
Insurer seeking approval to consummate the merger transaction and to exercise
the 19.9% "lock-up" option. Because the Department elects to treat Form A
materials as confidential, Cendant has not seen the AIG Form A Application, and
no notices pertaining to the AIG Form A Application have been made public.
Cendant further believes that no Form A Application has been filed by Maurice
R. Greenberg, Starr International Company, Inc., or any the other members of
the group controlling AIG, i.e., the Starr Foundation, C.V. Starr & Co. and
certain officers and directors of AIG.

                                       12



      5. AIG'S OTHER FORM A APPLICATIONS.

         New York is not the only state that must approve any acquisition of
American Bankers. Regulatory approval is also required in Arizona, Florida,
Georgia, South Carolina, Texas as well as Puerto Rico.

         In Texas, AIG's Form A application is publicly filed. On its face,
AIG's Texas Form A reveals critical gaps in information that are essential to a
Form A Application. For example, AIG has failed to disclose required
information relating to the control of AIG by Starr International Company,
Inc., which owns 16.1% of AIG's voting securities, or its chairman, Maurice R.
Greenberg, who, as set forth above, effectively controls approximately 25% of
the outstanding shares of AIG common stock by virtue of his control of Starr
International Company, Inc., the Starr Foundation, C.V. Starr & Co. and certain
officers and directors of AIG. That failure is a violation of Texas law, Texas
Ins. Code Art. 21.49-1 Section 5, and suggests that those involved in the 
attempted acquisition on AIG's behalf have not been sufficiently forthcoming 
with the Texas insurance regulators.

         In Texas, AIG also seeks separate approval of the exercise of its
unlawful option to acquire 19.9% of American Bankers' outstanding common stock
at a bargain price of $47 per share. Presumably, AIG seeks the same approval in
its New York Form A application (a fact that Cendant believes, but cannot state
with certainty unless and until it is given access to AIG's New York Form A).
As

                                       13



explained, regulatory approval of the lock-up option would substantially and
negatively affect the prospects for a better offer to emerge for American
Bankers' shareholders and presents significant public policy issues.

      6. THE CENDANT FLORIDA LAWSUIT.

         On January 27, 1998, Cendant filed a complaint (which was amended on
February 2, 1998) in the United States District Court for the Southern District
of Florida against American Bankers, its board of directors, AIG and AIGF
alleging that American Bankers and its board, aided and abetted by AIG and
AIGF, harmed their shareholders by entering into the unlawful merger agreement.
Appendix Tab H (Cendant's Amended Complaint).

         In brief, the complaint alleges that the merger agreement between AIG
and American Bankers is unlawful and prejudicial to American Bankers'
shareholders because its provisions seek to preclude American Bankers from
considering any competing acquisition offers (such as the Cendant offer) and
selecting the offer that is in the best interests of its shareholders.

         The complaint also sets forth numerous misrepresentations and
omissions of material fact by AIG. For example, the complaint asserts that AIG
has violated the disclosure requirements of the federal securities laws by
failing to disclose that it is controlled by Maurice R. Greenberg through his
personal holdings in AIG and the holdings of a control group - namely, Starr
International Company,

                                       14



Inc., The Starr Foundation, C.V. Starr & Co. and certain officers and directors
of AIG. Further, the complaint alleges that the defendants have issued to
American Bankers' shareholders a misleading proxy statement that: (i) creates
the impression that AIG already has exercised its lock-up option; (ii) fails
adequately to disclose that the Department and other regulators have not yet
given the required approvals for this action; (iii) falsely indicates that the
merger is expected to close in March 1988; and (iv) misleadingly fails to
reveal that projected "expense savings" achieved by the merger will be the
result of job cut-backs.

         In connection with the Florida lawsuit, Cendant proposed that the
parties enter a confidentiality stipulation pursuant to which information
obtained in the litigation could be used in the Form A proceedings in New York
and American Bankers' other domiciliary states. AIG and American Bankers have
balked at this proposal, and have steadfastly refused to allow certain
information obtained in the Florida lawsuit to be shared with the state
insurance regulators. Appendix Tab I (February 3, 1998 Letter of Seth C.
Farber, counsel for American Bankers, refusing to agree to disclosure of
confidential information to insurance regulators). Because a number of issues
raised in Cendant's lawsuit bear directly on the issues before the Department
in its consideration of AIG's Form A application, this refusal raises the
inference that AIG, as well as those persons who control AIG, are for some
reason anxious to deprive insurance regulators of critical facts related to the
merger

                                       15



agreement, its Form A application and its proposed acquisition of American
Bankers.

                                    ARGUMENT

I.  THE LAW GOVERNING CONSIDERATION OF FORM A APPLICATIONS.

         Under New York law, a proposed acquisition of control of a domestic
insurer may not be consummated unless and until it is approved by the
Superintendent. N.Y. Insurance Law Section 1506(a)(2) (McKinney 1997). The
Superintendent shall not approve the transaction if he determines that
disapproval is "reasonably necessary to protect the interests of the people of
this state." N.Y. Insurance Law Section 1506(b) (McKinney 1997). The factors 
to be considered by the Superintendent in making this determination include:

         (1)  the financial condition of the acquiring person and the insurer;

         (2)  the trustworthiness of the acquiring person or any of its
              officers and directors;

         (3)  a plan for the proper and effective conduct of the insurer's
              operations;

         (4)  the source of the funds or assets for the acquisition;

         (5)  the fairness of any exchange of shares, assets, cash or other
              consideration for the shares or assets to be received;

                                       16



         (6)  whether the effect of the acquisition may be substantially to
              lessen competition in any line of commerce in insurance or to
              tend to create a monopoly therein;

         (7)  whether the acquisition is likely to be hazardous or prejudicial
              to the insurer's policyholders or shareholders.

N.Y. Insurance Law ss. 1506(b)(1)-(7) (McKinney 1997) (emphasis added).

         Here, based upon what Cendant has been able to determine as a result
of its review of AIG's public filings and Texas Form A application, but without
knowledge of the contents of AIG's Form A application in New York, it appears
that, at a minimum, subsections (2), (3), (5), (6) and (7) each independently
prevents the approval of AIG's Form A application. The following sections of
this Petition demonstrate that: (i) Cendant has standing to intervene and
present evidence to the Department in connection with its assessment of these
issues; (ii) AIG's Form A application should be consolidated with Cendant's and
the Department's decision on both applications should be rendered
simultaneously; and (iii) the Department should convene a hearing on AIG's
application and hold such a hearing only after the results of the vote of
American Bankers' shareholders on the proposed AIG/American Bankers merger are
known.

                                       17



II. CENDANT IS ENTITLED TO INTERVENE IN THE AIG FORM A PROCEEDINGS.

    A.   AS A PERSON WHOSE INTERESTS WILL BE AFFECTED BY THE DECISION ON AIG'S
         FORM A APPLICATION, CENDANT IS ENTITLED TO INTERVENE.

         Cendant has a right to participate in the AIG Form A proceedings.
Under New York law, a person's whose interests are protected by a statute
governing administrative action is entitled to intervene in any proceeding
under that statute and participate as a party in the proceedings. In re Village
of Pleasantville, 37 A.D.2d 848, 848, 326 N.Y.S.2d 38, 39 (2d Dep't 1971).
Moreover, any person whose economic interests are threatened by agency action
regarding a third party must be permitted to intervene as a party in any agency
proceedings. In re Petition of N and Charleston Land Corp., 139 Misc. 2d 634,
638, 528 N.Y.S.2d 794, 797 (Sup. Ct. N.Y. Cty. 1987). Failure to permit
intervention in such a circumstance is a denial of due process. Id. A person
competing with an applicant for a mutually exclusive approval -- as Cendant
respectfully submits is the case here (see, infra Section III) -- is entitled
to be heard in its competitor's application proceedings. In re Application of
Dairymen's League Co-Operative Ass'n, 282 A.D.2d 69, 74, 121 N.Y.S.2d 857, 863
(3d Dep't 1953). As a shareholder of and competing bidder for American Bankers,
Cendant's interests are clearly affected by the AIG Form A proceeding.

                                       18



      1. CENDANT'S STATUS AS A SHAREHOLDER ENTITLES IT TO INTERVENE.

         Cendant is unquestionably a person whose interests New York's
acquisition of control statute is designed to protect. N.Y. Insurance Law 
Section 1506(b)(7) provides that, in evaluating a Form A application, the 
Department must consider whether the proposed acquisition "is likely to be 
hazardous or prejudicial to the insurer's policyholders or shareholders." 
(Emphasis added). Moreover, N.Y. Insurance Law Section 1506(b)(5) requires the 
Department to consider the "fairness of any exchange of shares, assets, cash or
other consideration" for the shares of the insurer. As the owner of 371,200 
shares of American Bankers common stock and 99,990 shares of American Bankers 
preferred stock, Cendant's interests are clearly at issue in the AIG Form A 
proceedings. Like all other American Bankers' shareholders, Cendant has been 
and continues to be harmed by the merger agreement's unlawful lock-up option 
and other preemptive weapons. These improper defensive measures seek to 
foreclose any opportunity for American Bankers' shareholders to realize a 
better price for their shares than AIG's inferior offer, whether from Cendant's
$500 million superior offer or from any other potential bidder.

         Accordingly, Cendant should be given the opportunity to demonstrate
to the Department that the merger agreement will result in inequities to the
shareholders of American Bankers, and for that reason should thus be
disapproved under N.Y. Insurance Law Sections 1506(b)(5) and (7).

                                       19



      2. CENDANT'S STATUS AS A RIVAL BIDDER FOR AMERICAN BANKERS ENTITLES IT
         TO INTERVENE.

         Cendant also qualifies as a person whose economic interests will be
affected by the Department's disposition of AIG's Form A application because
Cendant is a competing bidder for the acquisition of American Bankers. Approval
of either the lock up option or AIG's acquisition of American Bankers would
immediately and negatively affect Cendant.

         AIG seeks approval to exercise its lock up option to purchase 19.9% of
American Bankers' outstanding common stock at a substantial discount from the
current market price. Exercise of the option is not subject to a vote of
American Bankers' shareholders; the only barrier to AIG's acquisition of these
shares is regulatory approval. AIG's request to exercise the lock up option is
specifically designed to harm Cendant and all shareholders of American Bankers,
and, if approved, would indeed immediately and directly do so. By AIG's own
admission, the lock up option has no purpose other than to injure Cendant or
any other party who seeks to disrupt AIG's sweetheart deal with American
Bankers by making a competing bid. Specifically, AIG has indicated that its
exercise of the lock up option "may delay or make more difficult an acquisition
of American Bankers by a person other than AIG," "could have the effect of
making an acquisition of American Bankers by a third party more costly" and
"could also jeopardize the ability of a

                                       20



third party to acquire American Bankers in a transaction accounted for as a
pooling of interests." Appendix Tab E (AIG S-4 at 22).

         Moreover, apparently unable or unwilling to compete with Cendant's
offer in terms of price, AIG has now adopted a strategy of seeking to convince
American Bankers' shareholders to vote in favor of its far inferior offer by
very publicly attempting to convey the impression that the Department's
approval of its Form A is a rubber stamp while Cendant faces supposedly
insurmountable hurdles in its own attempt to gain regulatory approval. For
example, AIG has declared in its lawsuit filed in federal court in Florida that
it "is much further along than [Cendant in] efforts to obtain [regulatory]
approval," that it is "likely to secure prompt insurance regulatory approval"
and that Cendant will "find it difficult, if not impossible, to secure
regulatory approval." Appendix Tab B (AIG complaint at Paragraphs 24, 25). Not 
only are these statements belied by the facts that Cendant has already been 
approved by this Department and the Colorado Insurance Department to own and 
operate domiciliary insurers and has been approved to participate in other 
highly regulated industries, but they also make clear that AIG considers 
regulatory approval of its Form A an essential (if not the essential) element 
of its effort to gain shareholder support for its proposed merger with 
American Bankers. AIG's public proclamations of the importance of obtaining 
regulatory approvals only serve to highlight that approval of AIG's Form A 
would give AIG a substantial advantage in

                                       21



the marketplace while placing Cendant at a corresponding and immediate 
disadvantage. Given AIG's conduct to date, it is a virtual certainty that it 
would attempt to use the Department's approval of its Form A to convince 
American Bankers' shareholders that its offer for American Bankers is somehow 
superior to Cendant's. If the Department approves AIG's Form A, Cendant, other 
American Bankers' shareholders and American Bankers' policyholders will suffer 
immediate harm.

    B.   DUE PROCESS REQUIRES THAT CENDANT BE GIVEN A MEANINGFUL OPPORTUNITY
         TO PARTICIPATE.

         Due process considerations require that Cendant be allowed to
participate meaningfully in the AIG Form A proceedings by having a full and
fair opportunity to be heard. Bell v. Burson, 402 U.S. 535, 541-42 (1971) ("The
hearing required by the Due Process Clause must be 'meaningful' [citation
omitted] and 'appropriate to the nature of the case.'"); see also In re
Petition of N, 139 Misc. 2d at 638, 528 N.Y.S.2d at 797 (intervener must "be
given the full rights of a party").

    C.   CENDANT'S PARTICIPATION IN THE FORM A PROCEEDINGS WILL PROMOTE THE
         PURPOSES OF N.Y. INSURANCE LAW Section 1506(B).

         The statutory design of Form A proceedings clearly evidences a
legislative intent that the Department obtain complete and accurate information
regarding acquisitions of this nature in order to protect the interests of
shareholders, policyholders and persons whose economic interests may be
affected by the acquiring party's request for Department approval. See N.Y.
Insurance Law Section 1506(b).

                                       22



Cendant's intervention and participation in AIG's Form A proceeding will ensure
that the Department is fully informed about AIG's Form A.

         Specifically, Cendant is prepared to present the Department with
evidence of the following:

    1.   QUESTIONS ABOUT THE TRUSTWORTHINESS OF AIG AND ITS CONTROLLING
         PERSONS PRECLUDE APPROVAL OF AIG'S FORM A.

         A.   THE MERGER AGREEMENT IS UNLAWFUL

         As described above, the merger agreement between AIG and American
Bankers is contrary to law because it contains numerous provisions designed to
foreclose American Bankers from pursuing any transaction other than the AIG
merger, even where an alternative transaction, such as the Cendant offer, would
permit American Bankers' shareholders to receive vastly superior value for
their shares. By agreeing to these provisions, American Bankers and its
directors, aided and abetted by AIG and AIGF, have breached their duties under
the law to protect and hold paramount the interests of their shareholders. The
lock-up option, which AIG asks the Department to approve, is but one example of
the illegality of the merger agreement. Through this option, American Bankers
has agreed to permit AIG to purchase 19.9% of American Bankers' shares at a
bargain price so as to provide AIG with the opportunity to hamper substantially
any attempt by a competing acquirer to enter into a merger agreement with
American Bankers, even if the

                                       23



competing acquirer, as is Cendant, is willing and able to offer American
Bankers' shareholders substantially more for their shares than is AIG. The
illegality of the merger agreement is a central aspect of Cendant's pending
lawsuit in Florida, and Cendant would be prepared to present the Department
with all relevant information developed in that lawsuit at a hearing on AIG's
Form A application. Cendant's participation is essential because AIG has
already demonstrated its unwillingness to share information with the Department
by refusing to agree to Cendant's proposal to share such information with state
regulators. Appendix Tab I (Letter of Seth Farber).

         The fact that AIG would enter into a merger agreement containing such
unlawful provisions designed to advance its own interests at the expense of
American Bankers' shareholders speaks strongly to the untrustworthiness of AIG.

              B.   NONE OF AIG'S CONTROLLING PERSONS HAVE FILED A FORM A.

         The AIG Form A application filed in Texas includes only AIG as the
applicant. Cendant assumes that the Form A applications AIG has filed in
American Bankers' other six domiciliary states (and Puerto Rico) similarly list
AIG as the sole

                                       24



applicant. Under the applicable change of control statute, all controlling
persons of AIG, as defined in such statute, must seek approval for the
acquisition of control.(3)

         Cendant believes that AIG's New York Form A applications are also
facially incomplete in their failure to disclose the necessary information
about all ultimate controlling persons of AIG - including, without limitation,
Maurice R. Greenberg and Starr International Company, Inc. In the absence of
the requisite disclosure, the Department will be unable to evaluate the
trustworthiness of those persons who would acquire American Bankers, as N.Y.
Insurance Law ss. 1506(b)(2) requires, or to determine adequately whether it
would be "hazardous or prejudicial to [American Bankers'] policyholders or
shareholders" to approve AIG's application, as required by N.Y. Insurance Law
ss. 1506(b)(7).

         Mr. Greenberg should have filed for approval as a controlling person
of American Bankers in the AIG Form A filing filed with the Department and
should have disclosed his controlling interest in AIG. In addition, because
Starr International Company, Inc. by itself holds sufficient stock (16.1%) to
trigger the

- --------------
         (3) N.Y. Insurance Law ss. 1501(a)(2) provides that "[c]ontrol shall
be presumed to exist if any person directly or indirectly owns, controls, holds
with the power to vote ten percent or more of the voting securities of any
other person." As discussed above, Starr International Company, Inc. and, in
turn, Greenberg, through his control group (Starr International Company, Inc.,
The Starr Foundation, Inc., C.V. Starr & Co. and certain AIG officers and
directors) hold or control the requisite 10% or greater interest in AIG's
voting securities.

                                       25



presumption of control, it should have filed for approval as a controlling
person of American Bankers, particularly in the absence of such a filing by
Greenberg.

         The conclusion that Starr International Company, Inc. should have been
included as an applicant in AIG's Form A filings is further supported by the
fact that, in AIG's filing with the Office of Thrift Supervision (the "OTS")
seeking approval to become a savings and loan holding company by acquiring the
stock of AIG Federal Savings Bank, each of Starr International Company, Inc.
and C.V. Starr & Co. also sought OTS approval to become a savings and loan
holding company. Appendix Tab K (AIG's OTS Filing without attachments). AIG's
filing with the OTS stated that, as of January 31, 1997, Starr International
Company, Inc. beneficially owned approximately 16.1% of the outstanding common
stock of AIG. The filing further stated that "although [Starr International
Company, Inc.] does not believe that it controls AIG, whether acting alone or
in concert with others, for purposes of Section 10 of the Home Owners Loan Act,
it is filing this application in the event that the OTS does not reach the same
conclusion." A similar statement was made with respect to C.V. Starr & Co.'s
beneficial ownership of approximately 2.4% of the AIG common stock.

         The significance of the relationships of Starr International Company,
Inc., The Starr Foundation and C.V. Starr & Co. to AIG, and the importance of
this issue to AIG's Form A application, is underscored by the proceedings on
AIG's

                                       26



Texas Form A application. AIG has been requested by the Texas Department of
Insurance to provide information about these relationships and to provide
financial statements for the Starr entities. In response AIG has revealed to
the Texas regulators for the first time that, with two exceptions, all of the
officers and directors of Starr International Company, Inc., the Starr
Foundation and C.V. Starr & Co. are current officers or directors of AIG.
Appendix Tab J (January 30, 1998, Letter of Kenneth V. Harkins, Assistant
General Counsel of AIG, to Texas Department of Insurance, at 1). As for the
financial statements, AIG has extraordinarily claimed that no financial
statements are prepared for Starr International Company, Inc. or the Starr
Foundation, and that the most recent financial statement for C.V. Starr & Co.
was prepared in 1996. Appendix Tab J (Harkins Letter at 3). This claim was made
notwithstanding that based upon the current market capitalization of the value
of the AIG stock holdings of Starr International Company, Inc., the Starr
Foundation and C.V. Starr & Co. are approximately $13 billion, $3 billion and
$2 billion, respectively. This alone speaks volumes about the type of
disclosure that has been made to the Department and the type of inquiry which
should be made in order to evaluate properly who controls AIG.

         As has been demonstrated, the Department cannot adequately determine
whether the merger proposed by AIG is in the best interests of American

                                       27



Bankers' shareholders or policyholders unless each person with a controlling
interest in AIG provides sufficient information through a Form A
application.(4)

- --------------
         (4) Cendant is aware that a quarter of a century ago the Department
gave some consideration to the then-existing relationship of Starr
International Company, Inc., the Starr Foundation and C.V. Starr & Co. to AIG.
That relationship was markedly different from the relationship as it exists
today. In 1973, Starr International Company, Inc. and the Starr Foundation did
not own any shares of AIG common stock. Today, however, Starr International
Company, Inc. owns 16.1% of AIG's outstanding common stock (an amount by itself
sufficient to trigger the statutory presumption of control) and the Starr
Foundation owns 3.6% of AIG's outstanding common stock. Taken together, Starr
International, the Starr Foundation and C.V. Starr & Co. today own in excess of
22% of AIG's outstanding common stock. In 1973, this percentage was only 3.6%,
through the holdings of C.V. Starr & Co.

         AIG was before the Department in 1973 seeking to acquire a controlling
interest in American Re-Insurance Company. In that proceeding, the Department 
initially conducted ex parte discussions with AIG in which it determined that 
Starr International Company, Inc., the Starr Foundation and C.V. Starr & Co. 
were not required to seek approval from the Department for the proposed 
transaction. Appendix Tab L (Opinion and Decision at 203). The Department's
Opinion and Decision does not reveal what assurances these entities provided to
the Department to obtain this result. The Opinion and Decision does indicate,
however, that the result was based, at least in part, on the fact that Starr
International Company, Inc. and the Starr Foundation had no direct ownership
interest in AIG, but rather only an interest in American International
Reinsurance Company, Inc., which in turn held an interest in AIG. Id.

         Further, the Department held a hearing on AIG's application at which
it received evidence on the control persons issue, and ultimately determined
that its consideration of this evidence was the practical equivalent of review
of any application that might have been filed by the Starr entities. Id. In
reviewing the Department's decision, the Appellate Division of the New York
Supreme Court held that the Department should not have made an ex parte
determination that the Starr entities were properly not applicants, but that
the Department's decision to hold a hearing and receive evidence on this point
cured the defect. In re Application of American Re-Insurance Co., 47 A.D.2d at
518, 363 N.Y.S.2d at 593.

                                       28


         C.   THERE ARE NUMEROUS OTHER GROUNDS ON WHICH TO QUESTION THE
              TRUSTWORTHINESS OF AIG AND ITS OFFICERS AND DIRECTORS.

         AIG has a history of suspect business practices that call into
question the trustworthiness of AIG itself, of its controlling persons and of
its officers and directors. Many of these issues are fully described in
Cendant's brief in support of its motion to dismiss a lawsuit brought by AIG,
and will be aired before the federal district court in Florida at a hearing on
that motion. Appendix Tab M (Cendant's memorandum of law in support of its
motion to dismiss).

         D.   AIG AND AMERICAN BANKERS' REFUSAL TO ENTER INTO CENDANT'S
              PROPOSED CONFIDENTIALITY AGREEMENT IN THE FLORIDA LAWSUIT CALLS
              AIG'S TRUSTWORTHINESS AND THE MERGER AGREEMENT INTO QUESTION.

         AIG and American Bankers turned down Cendant's proposal, in the
Florida lawsuit, for a protective order that would allow confidential
information obtained in discovery in that matter to be shown to the insurance
regulators of American Bankers' domiciliary states. AIG's refusal suggests that
AIG and Amer ican Bankers are anxious to prevent inquiry into critical areas
and to prevent

- ----------

(4) (...Continued)

         AIG's current Form A raises the issue of whether Starr International
Company, Inc. and/or the Starr entities collectively should have filed their
own Form A applications as controlling persons of AIG. Apart from the changed
ownership of the AIG controlling entities over the last quarter century, their
conduct in the manner in which they have exerted that control is directly
related to the AIG application. The Department should, at a minimum, convene a
hearing to consider this issue.




                                       29



disclosure of certain information to insurance regulators. Pursuant to the
insurance statute, this reticence suggests that further inquiry is necessary
into the trustworthiness of AIG and whether "the acquisition is likely to be
hazardous or prejudicial to [American Bankers'] policyholders or shareholders."
N.Y. Insurance Law Sections 1506(b)(2) and (7).

         2.   AIG'S REQUEST FOR APPROVAL TO EXERCISE THE 19.9 % LOCK-UP OPTION
              RAISES SERIOUS PUBLIC POLICY AND REGULATORY ISSUES.

         As more fully described above, the 19.9% lock up option granted by
American Bankers to AIG is specifically intended to frustrate any bid for
American Bankers other than AIG's, even if such a bid - as is the case with
Cendant's - is superior to AIG's offer. This option is designed not only to
harm competing bidders for American Bankers, but also American Bankers' own
shareholders, who may be deprived of the opportunity to receive maximum value
for their shares if AIG is eventually able to frustrate a bidder such as
Cendant, who offers these shareholders $500 million more than does AIG. Thus,
AIG seeks Departmental approval of exercise of the lock-up option for no other
purpose than to use the 19.9% controlling interest acquired through exercise of
the option to block other offers for American Bankers, and thus to bring harm
to American Bankers shareholders. Under these unique circumstances, the
Department should carefully consider whether, as a matter of public and
regulatory policy, such a request should be approved.

                                       30



         3.   AIG'S ACQUISITION MAY SUBSTANTIALLY DIMINISH COMPETITION FOR
              INSURANCE IN NEW YORK, TENDING TO CREATE A MONOPOLY.

         New York insurance law prohibits the Superintendent from approving
acquisition transactions if "[t]he effect of the acquisition may be
substantially to lessen competition in any line of commerce in insurance or to
tend to create a monopoly therein." N.Y. Insurance Law Section 1506(b)(6). AIG
currently controls 16% of the market for inland marine insurance in New York,
and American Bankers controls 3.3% of this same market. Appendix Tab N (A.M.
Best CD-Rom as of 12/31/96). Clearly, any combination of AIG with American
Bankers would result in the combined entity having a dominant share of the
inland marine insurance market in New York. Based upon the manner in which AIG
addressed competition issues in its Form A filed in Texas, which Cendant
assumes to be replicated here, AIG has likely failed adequately to address the
competitive impact of its proposed acquisition of American Bankers on the
market in New York for inland marine insurance. Thus, AIG has further likely
failed to carry its burden of establishing that its proposed acquisition will
not have any anti-competitive effect. In contrast, Cendant has no share of the
inland marine insurance market in New York, and thus its acquisition of
American Bankers would have no effect on competition in this insurance line.

                                       31



         Cendant's intervention would permit it to develop for the Department
an adequate record regarding the anticompetitive effects of AIG's proposed
acquisition of American Bankers. On such a complex and crucial issue, the fact
finding process will be greatly assisted by the presentation of evidence
through the adversarial process.

         4.   AIG'S S-4 AND TEXAS FORM A FILINGS INDICATE THAT AIG PLANS TO
              MAKE MATERIAL AND POSSIBLY DETRIMENTAL CHANGES IN THE CORPORATE
              AND MANAGEMENT STRUCTURES OF AMERICAN BANKERS AND ITS
              SUBSIDIARIES.

         In its S-4 filing, AIG stated that it anticipates certain "synergies
and expense savings" to flow from its proposed merger with American Bankers.
Appendix Tab E (AIG's S-4 at 22). In contrast, in its Texas Form A application,
AIG declared that "[t]here are no plans to . . . make any . . . material change
in business operations or corporate structure or management." Appendix Tab A
(AIG's Texas Form A at 6). Cendant believes that investigation into this
contradiction may reveal that AIG intends to implement employee reductions that
could ultimately prove to be "hazardous or prejudicial to [American Bankers']
policyholders." N.Y. Insurance Law Section 1506(b)(7). This issue requires 
further investigation by the Department.

                                       32



II. THE FORM A PROCEEDINGS SHOULD BE CONSOLIDATED.

         The Department has authority to consolidate AIG's Form A application
with Cendant's. In re Application of Bayron, 28 A.D.2d 993, 993, 284 N.Y.S.2d
187, 188 (1st Dep't 1967) ("The discretion lodged in the courts to order ...
consolidation of actions to expedite justice is possessed by administrative
agencies."), appeal denied, 288 N.Y.S.2d 1025 (1968). See also In re Asbestos
Indus. of America, Inc., 224 A.D.2d 414, 414-15, 637 N.Y.S.2d 750, 751 (2d
Dep't 1996) (administrative agencies have discretion to consolidate
applications); In re Reisner, 142 A.D.2d 22, 30, 535 N.Y.S.2d 197, 202 (3d
Dep't 1988) (same). The Department, therefore, may order consolidation where
there is any "common question of law or fact" raised by competing applications.
N.Y. CPLR ss. 602(a).

         The AIG and Cendant Form A applications raise numerous common factual
and legal issues. By way of example, and without limitation, under N.Y.
Insurance Law Section 1506(b) the Department may consider in reviewing both 
the AIG and Cendant Form A applications, among other things:

         o    American Bankers' financial condition, and the effect of the
              proposed acquisitions thereon;

         o    whether the acquisitions are likely to be hazardous or
              prejudicial to American Bankers' policyholders or shareholders;

         o    the fairness of any exchange of shares, assets, cash or other
              consideration offered for American Bankers;

                                       33



         o    whether the effect of the proposed acquisitions would
              substantially lessen competition in any line of commerce in
              insurance in New York; and

         o    whether the proposed acquisitions provide plans for the proper
              and effective conduct of American Bankers' operations.

It would be inappropriate and an inefficient use of the Department's resources
to perform each of these analyses twice, in separate proceedings, particularly
since consideration of one application before the other would have the effect
of favoring one applicant over another. See In re Massey, 135 A.D.2d 1054,
1056, 522 N.Y.S.2d 989, 990-91 (3d Dep't 1987) (consolidation of hearings
appropriate to avoid duplication of effort); In re Reisner, 142 A.D.2d at 30,
535 N.Y.S.2d at 202.

         If the AIG Form A application is heard or approved without Cendant's
participation and simultaneous consideration of Cendant's Form A application,
AIG will receive an immediate and unfair advantage in the marketplace, as
discussed more fully above. Even if only the lock-up provision is approved, AIG
will have obtained voting power sufficient to exert great influence over
American Bankers' destiny. By hearing or approving either AIG's Form A
application or its request to exercise the lock-up option, the Department, in
effect, will have placed itself in the position of having recommended AIG over
Cendant as the acquirer of American Bankers.

                                       34



         In Ashbacker Radio Corp. v. Federal Communications Comm'n., 326 U.S.
327, 333 (1945), the United States Supreme Court recognized that "where two
bona fide applications are mutually exclusive the grant of one without a
hearing to both" violates the due process rights of the applicant whose
application was not considered. Id. at 329 (holding that FCC erred in granting
a radio broadcast license without simultaneously considering competing
application for a license to broadcast on same frequency); accord Application
of Dairymen's League Co-Operative Ass'n, 282 A.D.2d at 74, 121 N.Y.S.2d at 863
(due process entitles competitor to be heard in other's application for
mutually exclusive license); Bio-Medical Applications of Clearwater, Inc. v.
Department of Health and Rehab. Servs., 370 So. 2d 19, 23 (Fla. Ct. App. 1979)
(holding that department erred in refusing to consolidate competing
applications for approval of new medical facilities in same health planning
area: The Ashbacker doctrine "constitutes a fundamental doctrine of fair play
which adminis trative agencies must respect and courts must be ever alert to
enforce"); Bostick v. Sadler, 55 Cal. Rptr. 322, 325-26 (Ct. App. 1966)
(holding that savings and loan commission had not erred in consolidating
proceedings on applications for approval of bank branch corporate articles
where commission policy limited number of branches in region to only one); Bay
State Harness Horse Racing and Breeding Assoc., Inc. v. State Racing Comm'n.,
175 N.E.2d 244, 250 (Mass. 1961) (applying Ashbacker to racing applications
where state law limited total number of racing days

                                       35



that could be licensed: "[When] two or more persons seek mutually exclusive
privileges or licenses, each applicant has an interest entitling it to hearing
and review by some method which effectively compares the applicants in the
light of applicable aspects of the public interest.").

         The due process and fairness considerations present in the Ashbacker
line of cases apply with special force here. See Bio-Medical, 370 So. 2d at 23
(rejecting argument that Ashbacker doctrine is inapplicable if two licenses
could, theoretically, be granted: "Ashbacker should apply whenever an applicant
is able to show that the granting of authority to some other applicant will
substantially prejudice his application"). After all, there is only one
American Bankers, and AIG and Cendant cannot both acquire it. Indeed, approving
the lock-up option alone would be tantamount to granting AIG an exclusive
license to acquire American Bankers, because AIG would have significant power
to attempt to block any rival merger bid. Thus, any advantage given to AIG
results in corresponding disadvantage to Cendant.

         Considerations of fairness require that Cendant's and AIG's Form A
applications be heard and decided simultaneously because otherwise, the company
with the first Form A hearing or approval will have an unfair advantage in
closing a transaction with American Bankers and any entity still awaiting
hearing or approval will be significantly prejudiced. The Department should not
engage in action that

                                       36



could have such a decisive impact on the marketplace when it could easily avoid
that possibility by consolidating the two Form A proceedings.

III. THE DEPARTMENT SHOULD SCHEDULE A HEARING ON AIG'S FORM A APPLICATION, AND
     HOLD THE HEARING ONLY AFTER THE RESULTS OF THE SHAREHOLDER VOTE ARE KNOWN

A.   NEW YORK'S INSURANCE LAW AND DUE PROCESS REQUIRE A HEARING.

         As described more fully above, AIG's application raises serious 
questions as to whether it must be disapproved under N.Y. Insurance Law 
Section 1506(b). Under these circumstances, the Department should hold a 
hearing on AIG's Form A to permit full examination of these issues. N.Y. 
Insurance Law Section 1506(b) ("The superintendent shall disapprove such 
application if he determines, after notice and an opportunity to be heard, that
such action is reasonably necessary to protect the interests of the people of 
this state.") Moreover, as a shareholder of and competing acquirer for American
Bankers, Cendant has the right to participate in this hearing as an intervener 
(see supra Section I) and pursuant to N.Y. Insurance Law Section 304(d), which 
provides:

         Every person affected shall be allowed to be present during the giving
         of all the testimony, and shall be allowed a reasonable opportunity to
         inspect all adverse documentary proof, to examine witnesses, and to
         present proof in support of his interest.

                                       37



As at least one commentator has noted, a hearing is particularly appropriate in
a situation such as the one presented by AIG's Form A. See, Bender, New York
Insurance Law at Section 9.02[2][b] ("a hearing is not usually held except in
contested acquisitions"). See also Senise v. Corcoran, 146 Misc. 2d 598,
599-600, 552 N.Y.S.2d 483, 484 (Sup. Ct. N.Y. Cty. 1989) (Superintendent has
broad powers to implement legislative policy, including by holding hearings).

         Further, like any other shareholder of American Bankers, Cendant has a
substantial interest in the outcome of these proceedings. That interest is
heightened by Cendant's status as a competing bidder for American Bankers.
Thus, wholly apart from the statutory grounds for a hearing, due process
requires a hearing under these conditions. See, e.g., Hecht v. Monaghan, 307
N.Y. 461 (1957) (where the exercise of statutory power will affect rights,
courts will imply right to a hearing even if statute is silent on issue);
Application of Dairymen's League Co-Operative Ass'n, 282 A.D.2d at 74, 121
N.Y.S.2d at 863 (due process entitles competitor to be heard in other's
application for mutually exclusive license).

B.  THE HEARING SHOULD BE SCHEDULED AFTER THE SHAREHOLDER VOTE.

         A vote of American Bankers' shareholders on the proposed AIG/American
Bankers merger is presently scheduled to be held on March 4 and 6, 1998, for
preferred and common shareholders, respectively. The Department should await
the results of this vote before scheduling a hearing on AIG's Form A applica-

                                      38


tion. Shareholder disapproval of the AIG/American Bankers merger - a result
that is not unlikely given that AIG offers American Bankers' shareholders $500
million less than does Cendant - would effectively moot AIG's request for
approval to acquire American Bankers. In such an event, it would be a waste of
the Depart ment's resources, as well as those of all who would participate in a
hearing on AIG's Form A application, to have conducted a hearing. On the other
hand, there exist no compelling reasons to conduct a hearing before the results
of the shareholder vote are known. Receipt of regulatory approval by AIG is not
required before American Bankers' shareholders vote on the merger proposal.
Moreover, the absence of regulatory approval at the time of the shareholder
vote will not have any impact upon AIG's ultimate success or failure in its
attempt to acquire American Bankers. Shareholder and regulatory approval are
both conditions of the merger, each entirely distinct from the other. If the
AIG merger is approved by American Bankers' shareholders, AIG will have
satisfied one condition to the merger. The Department can then conduct a
hearing on AIG's Form A application to determine if approval should be granted
and a further condition of the merger be satisfied. If the AIG merger does not
receive shareholder approval, however, the need for a hearing by the Department
will be obviated.

         Where there is a question regarding the legality or propriety of a
proposed merger that is subject to a shareholder vote, deferral of any
adjudicatory

                                       39



hearing on these issues pending the outcome of the shareholder vote is
appropriate to avoid the conduct of an unnecessary hearing. See, e.g., D&N
Financial Corp. v. RCM Partners Ltd. Partnership, 735 F. Supp. 1242, 1253 (D.
Del. 1990) (court permitted vote based upon allegedly misleading proxies to
proceed where it could set aside vote if necessary and proxies were found
misleading); Equity Group Holdings v. DMG, Inc., 576 F. Supp. 1197, 1205 (S.D.
Fla. 1983) (where shareholder vote could result in rejection of challenged
merger and thus moot plaintiff's claim for relief, and where relief would be
available to plaintiff in the event of shareholder approval, it was appropriate
to allow vote to proceed); FMC Corp. v. R.P. Scherer Corp., 545 F. Supp. 318,
322 (D. Del. 1982) (court denied request for injunction against vote based upon
allegedly misleading proxies where it could, set aside shareholder vote if it
determined, after vote, that proxy materials were misleading); Wetter v.
Ceasars World, Inc., 541 F. Supp. 68, 74 (D.N.J. 1982) (same); Bertoglio v.
Texas Int'l Co., 472 F. Supp. 1017, 1021-22 (D. Del. 1979) (same); Clairedale
Enterprises, Inc. v. C.I. Realty Investors, 423 F. Supp. 261, 264 (S.D.N.Y.
1976) (same).

         Further, any action on AIG's Form A application taken in advance of
action on Cendant's own Form A application and without the participation of
Cendant will give AIG a substantial and unjust advantage over Cendant in their
pursuit of a merger with American Bankers. Because AIG appears unable or

                                       40



unwilling to compete with Cendant in terms of the price it has offered to pay
for American Bankers, AIG has sought other methods to secure the necessary vote
of American Bankers' shareholders. As described above, AIG has attempted to
give the impression to shareholders that regulatory approval of AIG's
application is imminent, but approval of Cendant's application is only a
possibility at some future time. In this light, a hearing on AIG's Form A
application scheduled before a shareholder vote would provide AIG with yet
another opportunity to make such unfair allegations.

                                       41



                                RELIEF REQUESTED

         For the reasons discussed above the Department should issue an order
allowing Cendant to intervene as a party in the Department's administrative
proceedings in connection with the proposed acquisition of American Bankers by
AIG. The Department also should consolidate the AIG Form A proceeding with the
Cendant Form A proceeding, both of which involve the acquisition of American
Bankers. Additionally, the Department should schedule a hearing on AIG's Form A
application to be held after the results of the vote of American Bankers'
shareholders on the proposed AIG/American Bankers merger are known. 

February 17, 1998.

                                            Respectfully submitted,

                                            /s/ Robert J. Sullivan
                                            ------------------------------------
                                            Jerome S. Hirsch
                                            Robert J. Sullivan
                                            Skadden, Arps, Slate,
                                              Meagher & Flom LLP
                                            919 Third Avenue
                                            New York, New York  10022

                                            Attorneys for Petitioners Cendant
                                              Corporation and Season
                                                Acquisition Corp.

                                       42



                          UNITED STATES DISTRICT COURT
                          SOUTHERN DISTRICT OF FLORIDA
                                 MIAMI DIVISION

AMERICAN INTERNATIONAL GROUP, INC.,
and AIGF, INC.,

    Plaintiffs,
                                                    CASE NO. 98-0247-CIV-GRAHAM
            v.                                            MAGISTRATE JUDGE DUBE

CENDANT CORPORATION and
SEASON ACQUISITION CORP.,

    Defendants.
- ----------------------------------------/


                         DEFENDANTS' MOTION TO DISMISS
                         PLAINTIFFS' AMENDED COMPLAINT
                         -----------------------------

         Defendants Cendant Corporation and Season Acquisition Corp., hereby
move this Court pursuant to Rules 9(b), 12(b)(6) and 13(a) of the Federal Rules
of Civil Procedure and the Private Securities Litigation Reform Act of 1995, to
dismiss plaintiffs' Amended Complaint filed in the above-captioned action. The
grounds for the relief requested are set forth in the defendants' memorandum of
law filed simultaneously with this motion.



                                                    Case No. 98-0247-CIV-GRAHAM

Dated:  February 18, 1998
        Miami, Florida

                                            Respectfully submitted,

                                            SHUTTS & BOWEN LLP
                                            1500 Miami Center
                                            201 South Biscayne Boulevard
                                            Miami, Florida  33131
                                            Telephone:  305-358-6300
                                            Facsimile:   305-381-9982


                                            By: /s/ Robert T. Wright, Jr.
                                               --------------------------------
                                               Robert T. Wright, Jr.
                                               Florida Bar No. 185525
                                               John C. Shawde
                                               Florida Bar No. 449784

                                            Attorneys for Defendants Cendant
                                            Corporation and Season Acquisition
                                            Corp.

Of Counsel:
Jonathan J. Lerner
Samuel Kadet
Seth M. Schwartz
SKADDEN, ARPS, SLATE,
  MEAGHER & FLOM LLP
919 Third Avenue
New York, New York  10022
Telephone:  212-735-3000
Facsimile:  212-735-2000

                                      -2-



                                                    Case No. 98-0247-CIV-GRAHAM

                             CERTIFICATE OF SERVICE

         I HEREBY CERTIFY that a true and correct copy of the foregoing Motion
to Dismiss has been served this 18TH day of FEBRUARY, 1998, upon the following:


VIA HAND-DELIVERY TO:                         VIA FACSIMILE AND U.S. MAIL TO:
Lewis F. Murphy, Esq.                         Richard H. Klapper, Esq.       
Steel, Hector & Davis LLP                     SULLIVAN & CROMWELL            
Co-Counsel for AIG and AIGF                   Co-Counsel for AIG and AIGF    
200 South Biscayne Boulevard                  125 Broad Street               
First Union Financial Center, Suite 4000      New York, New York 10004-2498  
Miami, Florida 33131-2398                     Facsimile:  (212) 558-4000     
                                              
                                              /s/ Robert T. Wright, Jr.
                                              ---------------------------------
                                      -3-



                          UNITED STATES DISTRICT COURT
                          SOUTHERN DISTRICT OF FLORIDA
                                 MIAMI DIVISION


AMERICAN INTERNATIONAL GROUP, INC.,
AND AIGF, INC.,

    Plaintiffs,
                                                    CASE NO. 98-0247-CIV-GRAHAM
              v.                                          MAGISTRATE JUDGE DUBE

CENDANT CORPORATION, and SEASON
ACQUISITION CORP.,

    Defendants.


- ---------------------------------------/


                  DEFENDANTS' MEMORANDUM OF LAW IN SUPPORT OF
             THEIR MOTION TO DISMISS PLAINTIFFS' AMENDED COMPLAINT
             -----------------------------------------------------

                             PRELIMINARY STATEMENT

         AIG's Amended complaint (the "Amended Complaint"), is nothing more
than a rehash of its original complaint. It suffers from the same fatal
defects, including among many others, the fact that it should be dismissed
because it is a compulsory counterclaim to Cendant's complaint. See Cendant
Corp., et al. v. American Bankers Ins. Group, Inc., C.A. No. 98-0159 (S.D.
Fla.) (Civ-Moore).

         The only new claim that can be found among AIG's rambling pages of
personal attacks on Mr. Silverman is that Cendant is allegedly required to
disclose that it cannot acquire or vote proxies representing 10 percent or more
of American Bankers' voting securities without prior regulatory approval in
five of the six states in which American Bankers' insurance subsidiaries are
domiciled (the "Disclosure of Control" claim). This utterly meritless claim is
a 



desperate, eleventh-hour concoction by AIG's lawyers in response to Cendant's
meritorious motion to dismiss.

         AIG's Disclosure of Control claim is based on a nonsensical reading of
the pertinent statutes -- that by soliciting revocable proxies in opposition to
the AIG merger proposal, Cendant is acquiring "control" over American Bankers.
The definition of "control" in all of those statutes is simply not triggered by
Cendant's solicitation of proxies in opposition to AIG's proposed merger.
"Control" in these jurisdictions means acquisition of the power to direct the
management and policies of the target company. However, as Cendant's proxy
materials make clear, Cendant's solicitation of proxies is not a solicitation
of control of American Bankers. It is not a request for the shareholders of
American Bankers to tender their shares to Cendant. It is not a proposal to
elect any directors to the American Bankers' board of directors. It is not a
solicitation in favor of its own acquisition proposal. It is merely a
solicitation of revocable proxies against AIG's proposed merger. Cendant's
solicitation can result in nothing more than maintaining the status quo.1 Thus,
Cendant's holding or voting such proxies cannot be an attempt to direct the
management or policies of American Bankers. Moreover, the regulatory approval
requirement is not triggered by Cendant's holding or voting the limited
purpose, revocable proxies as Cendant is neither acquiring nor attempting to
acquire control. Rather it is merely attempting to preserve the status quo.

- --------
1  As Cendant's proxy statement states in boldface capital letters:

    EVEN IF YOU HAVE ALREADY SENT A PROXY TO THE BOARD OF DIRECTORS OF AMERICAN
    BANKERS, YOU HAVE EVERY RIGHT TO CHANGE YOUR VOTE.

  (Proxy Statement at 6)

                                       2



         Moreover, if AIG's reading of this statute were correct -- which it is
not -- no one could ever solicit proxies against any management proposal of a
company regulated by these statutes, without first obtaining regulatory
approval. This would be an absurd result.

         In any event, Cendant has filed AIG's Amended Complaint as an
amendment to its Schedule 14D-1. Accordingly, the Disclosure of Control claim
is moot and should be dismissed.

         Aside from AIG's eleventh-hour Disclosure of Control claim, the only
new materials in the Amended Complaint are some embellishments of AIG's claim
that Cendant must file a registration statement pursuant to Section 5 of the
Securities Act of 1933 (the "1933 Act") and a few more scurrilous attacks on
Mr. Silverman. As discussed in Cendant's Memorandum Of Law In Support Of Their
Motion To Dismiss filed on February 13, 1998 in response to AIG's original
complaint (the "Memorandum in Support of Motion to Dismiss"), AIG does not even
have standing raise the 1933 Act claim.2 Even if AIG had standing, the
authorities cited by Cendant in its Memorandum in Support of Motion to Dismiss
clearly show that Cendant is not required to file a registration statement at
this juncture.

         As for the new personal attacks on Mr. Silverman, they are obviously a
continuation of AIG's public relations campaign designed to create the
impression that there is a "regulatory gap" between the competing proposals.
These assertions are not actionable as a matter of law. Certainly Cendant is
not required to disclose AIG's erroneous and pejorative statements about Mr.
Silverman. Nor is Cendant required to disclose AIG's one-sided

- --------
2  For the Court's convenience, we attach hereto as Exhibit A, a copy of
   Cendant's and Season Acquisition Corp.'s Memorandum Of Law In Support Of
   Their Motion To Dismiss filed on February 13, 1998.

                                       3



predictions about the likely course of the regulatory process, which
predictions are immaterial as a matter of law. Accordingly, the Amended
Complaint should be dismissed in its entirety.

                               STATEMENT OF FACTS

OVERVIEW OF AIG'S NEW DISCLOSURE OF CONTROL CLAIM.

         The only new claim in AIG's Amended Complaint is AIG's claim that
Cendant failed to disclose that Cendant's solicitation of proxies from American
Bankers' shareholders will violate state insurance laws if Cendant receives
proxies that exceed 10 percent of American Bankers outstanding shares. (Am.
Comp. P. 4) In this regard, AIG alleges that:

    o    "Cendant cannot hold (let alone vote) proxies representing 10% or more
         of American Bankers' voting securities because holding such proxies is
         presumed to be acquisition of 'control' of American Bankers' insurance
         subsidiaries and requires regulatory approval prior to acquisition of
         the proxies." (Am. Comp. P. 4)

    o    "For example, in Georgia - a state where Cendant must secure
         regulatory approval for its proposed acquisition of control of
         American Bankers - Section 33-13- 1(3) of the Georgia Insurance Code
         presumes that 'control' exists if a person holds proxies representing
         10% or more of the voting securities of any other person." (Id.)

    o    "Arizona, South Carolina and Texas have similar statutory prohibitions
         on holding proxies for 10% or more of an insurance company's shares
         and the New York Department of Insurance has interpreted the New York
         Insurance Code in the same way." (Id.)

         As shown below, the fatal defect in AIG's Disclosure of Control claim
is that Cendant's activities do not even implicate the definition of "control'
in any of these statutes. As the Arizona statute states, for example, "control"
means "the possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of a person...." Ariz. Rev. Stat.
20-481(3) (1996) AIG admits in its own brief, that "[t]he reason that these
statutes prohibit the acquisition of control of voting power without prior
approval is that with the power to vote

                                       4



shares an acquirer can choose management and direct the business affairs of an
insurance company or insurance holding company before the state has had the
opportunity to review their fitness to do so." (AIG Mem. of Law, dated Feb. 16,
1998) (hereinafter "AIG Mem.") (emphasis added).3 Cendant is not soliciting
proxies in favor of its own acquisition proposal. Cendant is not soliciting in
favor of a competing slate of directors. It is not a request for the tender of
American Bankers shares. Rather, as Cendant's proxy materials make clear,
Cendant is merely soliciting proxies against AIG's proposed merger. For
example, Cendant's Schedule 14A states in boldface type:

    THIS PROXY STATEMENT IS NEITHER A REQUEST FOR THE TENDER OF COMMON SHARES
    NOR AN OFFER WITH RESPECT THERETO. SUCH AN OFFER WITH RESPECT TO COMMON
    SHARES IS MADE ONLY THROUGH THE CENDANT OFFER TO PURCHASE.

(Proxy Statement at 6) A review of the actual proxy card attached to Cendant's
Schedule 14A makes clear that the only matter being voted upon is the AIG
merger proposal. (Exhibit B) The proxy card itself states that it "will be
voted in accordance with the specifications made," indicating that Cendant must
vote as directed. Further, the limited purpose of the proxy is evidenced by
Cendant's February 12, 1998 letter to American Bankers shareholders also states
in boldface type that:

    THIS PROXY STATEMENT RELATES SOLELY TO THE SOLICITATION OF PROXIES WITH
    RESPECT TO THE PROPOSED AIG MERGER AND IS NEITHER A

- --------
3  AIG obviously realizes this defect in its argument. Given that it is clear
   that Cendant is merely soliciting proxies in opposition to AIG's merger
   proposal, and not in favor of its own acquisition proposal, AIG suggests
   that this distinction is irrelevant since only Cendant's proposal will
   remain if AIG's proposal is defeated. (Am. Comp. P. 6) However, as AIG is
   fully aware, Cendant's acquisition proposal cannot be consummated until all
   necessary regulatory approvals are obtained.

                                       5



    REQUEST FOR THE TENDER OF AMERICAN BANKERS COMMON SHARES NOR AN OFFER TO
    SELL SHARES OF CENDANT COMMON STOCK. THE CENDANT OFFER IS BEING MADE ONLY
    BY MEANS OF AN OFFER TO PURCHASE AND RELATED LETTER OF TRANSMITTAL, WHICH
    HAVE BEEN SEPARATELY MAILED TO AMERICAN BANKERS SHAREHOLDERS.4

                  As shown below, AIG's Disclosure of Control claim is
meritless and ought to be dismissed along with the rest of its claims.

                                    ARGUMENT

IV. THE AMENDED COMPLAINT CONTINUES TO STATE COMPULSORY
    COUNTERCLAIMS AND SHOULD BE DISMISSED.

         Like the original complaint, the Amended Complaint should be dismissed
because it violates Federal Rule of Civil Procedure 13(a). The only new claim
AIG attempts to assert here, the Disclosure of Control claim, arises from the
same transactions as the claims alleged by Cendant in its earlier-filed action
against American Bankers, its directors and AIG (Cendant Corp. et al. v.
American Bankers Ins. Group, Inc. et al., Case No. 98-0159-Civ-Moore).
Accordingly, they are therefore "compulsory counterclaims" within the meaning
of Rule 13(a). See Tullos v. Parks, 915 F.2d 1192, 1196 (8th Cir. 1990)
(counterclaims were compulsory where

- --------
4  As disclosed in Cendant's Schedule 14D-1:

         Generally, a person seeking to acquire voting securities, such as
         Common Shares, in an amount that would result in such person
         controlling directly or indirectly, a domestic insurer must, together
         with any person ultimately controlling such person, file a Form A with
         the relevant Insurance Commission and send a copy of such Form A to
         the domestic insurer. [Cendant and Season Acquisition Corp.] made form
         A filings with the relevant Insurance Commissions and sent copies
         thereof to the relevant domestic insurers on the date of this Offer to
         Purchase.

    Offer to Purchase at 39. Thus, Cendant has made all the requisite filings
    and has fully disclosed that it has done so. Nothing more is required.

                                       6



"all the claims asserted by both sides in this case are part of the fight
between the parties for control" of bank). Compulsory counterclaims which are
improperly brought as a separate action must be dismissed. Adam v. Jacobs, 950
F.2d 89 (2d Cir. 1991) (citing 6 C. Wright, A. Miller & M. Kane, Federal
Practice & Procedure ss. 1418, at 142-43 (2d ed. 1990)).

V.  AIG'S NEW DISCLOSURE OF CONTROL CLAIM, LIKE ITS OTHER
    REGULATORY CLAIMS, SHOULD BE DISMISSED.

    A.   THE DISCLOSURE OF CONTROL CLAIM IS MOOT

         Like the original Complaint which failed to state a claim for relief
based on Mr. Silverman's statements about regulatory approval, the Amended
Complaint's new Disclosure of Control claim fares no better. Cendant has filed
the Amended Complaint as an exhibit to an amendment to its Schedule 14D-1. As a
result, insofar as the Amended Complaint is premised on purported misstatements
concerning a technical administrative matter such as insurance regulatory
approval, such disclosure renders the Amended Complaint moot and warrants
dismissal. Avnet, Inc. v. Scope Indus., 499 F. Supp. 1121, 1123-24 (S.D.N.Y.
1980).

         In Avnet, the plaintiff alleged that the defendants had made false and
misleading disclosures in their Schedule 13D because the defendants "failed to
disclose that [defendant] Scope [Industries] was an unregistered investment
company in violation of the Investment Company Act of 1940." Id. at 1122. The
defendants, who believed that Scope was not an investment company, responded to
the plaintiff's complaint by filing an amended Schedule 13D that summarized and
denied the allegations of Avnet's complaint. Id. at 1124. The United States
District Court for the Southern District of New York held that the defendants'
amended Schedule 13D was "sufficient to cure any alleged omissions" concerning
Scope's status an investment

                                       7



company. Id. The court explained that "the purpose of the disclosure provisions
of the securities laws is to see to it that the insider, management official,
proxy solicitor, tender offeror or substantial shareholder, as the case may be,
discloses to the investor the facts as truly believed by the disclosure." Id.
at 1125 (emphasis added). Accordingly, the court dismissed the plaintiff's
claim relating to the defendants' alleged failure to disclose Scope's status as
an investment company. Id. at 1126. See also Union Pacific Resources Group,
Inc. v. Pennzoil Co., C.A. No. 4:97-CV-509-Y (N.D. Tex., Sept. 10, 1997)
(Order) ("because the September 8th amendment to Plaintiff's schedule 14D-1
contains the disclosures Pennzoil sought by way of injunction to require
Plaintiffs to make, it is not necessary for the Court to make any finding that
Plaintiff did, or did not, violate the Act nor whether the disclosures which
were made were required").

    B.   ASIDE FROM BEING MOOT, THE DISCLOSURE OF CONTROL CLAIM IS INCORRECT AS
         A MATTER OF LAW AND, THEREFORE, SHOULD BE DISMISSED.

         AIG contends that under the law of five states (Arizona, Georgia, New
York, South Carolina and Texas), the holding by Cendant of proxies to vote more
than 10% of American Bankers outstanding shares on the AIG merger proposal
would itself constitute a "change of control" so as to require prior regulatory
approval. In support of this strange proposition, AIG points to the portions of
the state statutes which provide that "control" will be "presumed" if a person
holds proxies representing 10% or more of the voting securities of any other
person.

         To begin with, AIG's theory is absurd. If it were correct, no one
could ever solicit proxies in respect of a vote of the stockholders of an
insurance company or insurance holding company without first obtaining
regulatory approval for the solicitation itself, wholly apart from regulatory
approval of the underlying transaction. AIG's theory would eviscerate the
ability of

                                       8



stockholders to work together in opposition to any management proposal, thereby
providing insurance companies with an impenetrable takeover defense.

         Likewise, if the solicitation of proxies to maintain current
management in power were found to constitute actions that "direct or cause the
direction of the direction of the management and policies" of an insurance
company or insurance holding company, then no vote on the election of directors
of an insurance company or insurance holding company, or any number of other
corporate initiatives could ever be held without invoking the "control"
definition, together with the requirement that a Form A be filed and approved
prior to every election of directors.

         AIG's theory is absurd for yet another reason. American Bankers' own
proxy solicitation materials solicit proxies to be given to R. Kirk Landon,
Gerald N. Gaston and Arthur W. Heggen, who will then have the power to vote
those shares in favor of the AIG merger proposal. Messrs. Landon, Gaston and
Heggen seek to hold "proxies representing 10% or more of the voting securities"
of American Bankers, yet have not received regulatory approval to hold such
proxies. Thus, if AIG's interpretation of the statutory presumption were
correct, American Bankers would be guilty of precisely the same purported
disclosure violation.5

- --------
5   While the pertinent Texas statute exempts from the presumption "a corporate
    officer or director" who holds proxies, Tex. Ins. Art. 21-49-1 ss. 2(d), we
    do not believe that exemption applies in this instance as Messrs. Landon,
    Gaston and Heggen are obviously acting as agents for AIG. This is evident
    from the voting agreement Landon and Gaston have entered into with AIG. See
    Schedule 14D-1 at 4. Pursuant to this agreement, "Messrs. Landon and Gaston
    have agreed (i) to vote the approximately 8.2 % of the outstanding Company
    Shares beneficially owned by them (A) in favor of adopting the AIG Merger
    Agreement and approving the Proposed AIG Merger and (B) against any actions
    or proposal that would compete with or could serve to materially interfere
    with, delay, discourage, adversely affect or inhibit the timely
    consummation of the Proposed 
                                                                 (continued...)

                                       9



         Of course, AIG's theory is not correct. As stated above, the
definition of "control" is not even implicated because Cendant's solicitation
of revocable proxies on AIG's merger proposal will not result in Cendant
obtaining the power to direct the management or policies of American Bankers.6

         Even assuming, arguendo, that a statutory "presumption" of control may
arise as a result of holding revocable proxies for 10% or more, that
presumption is rebutted by the face of Cendant's proxy materials which make
clear that revocable proxies are being solicited in opposition to AIG's merger
proposal. Insurance regulators in the pertinent states will look to the
statutory definition of "control" which includes not only the "presumption"
language but also the language pertaining to possession of the power to direct
the management and policies of a person:

South Carolina: The term "control" ... means the possession, direct
                or indirect, of the management and policies of a person,
                whether through the ownership of voting securities, by contract
                other than a commercial contract for goods or nonmanagement
                services, or otherwise, ... S.C. Code Ann.ss. 38-21-10(2)
                (1997).

- --------
5   (...continued)
    AIG Merger, and (ii) upon request, to grant AIG an irrevocable proxy with
    respect to such Common Shares." (Id.)

6   Even if the definition of "control" were applicable, a Form A filing would
    nonetheless not be required. The critical focus in determining whether a
    Form A filing is required is not properly based on an isolated invocation
    if the presumption of control language. Rather, it is properly based upon
    whether or not, as the language of the statutes indicate, after
    consummation of triggering action (which action does not refer to the
    holding or voting of a proxy, but rather to the acquisition of "any voting
    security"), a party would have "control as statutorily defined. Thus, even
    if Cendant is successful in obtaining a sufficient number of proxies in
    opposition to the Proposed AIG Merger, the voting of such proxies by
    Cendant would not result in a change of control of American Bankers, but
    rather, the preservation of the status quo. Thus, Cendant would not be
    required to file a Form A statement and obtain regulatory approval prior to
    its solicitation of proxies

                                       10



New York:       "Control" ... means the possession direct or indirect of
                the power to direct or cause the direction of the management
                and policies of a person, whether through the ownership of
                voting securities, by contract ... or otherwise; ... N.Y. Ins.
                Law ss. 1501(a)(2) (McKinney 1997).

Georgia:        "Control" ... means the direct or indirect possession of the
                power to direct or cause the direction of the management and
                policies of a person whether through the ownership of voting
                securities by contract ... or otherwise, ... Ga. Code Ann.. ss.
                33-13-1(3) (1997).

Arizona:        "Control" ... means the possession, direct or indirect, of the
                power to direct or cause the direction of the management and
                policies of a person, whether through the ownership of voting
                securities, by contract ... or otherwise, ... Ariz. Rev.
                Stat.ss. 20-481.3 (1996) (emphasis added).

Texas:          The term "control" ... means the possession, direct or
                indirect, of the power to direct or cause the direction of the
                management and policies of a person, whether through the
                ownership of voting securities, by contract ..., or otherwise,
                ... Tex. Ins. Art. 21-49-1ss. 2(d) (emphasis added) (1997).

         Under these definitions, as a matter of law, neither Cendant's proxy
solicitation nor the administrative act of voting such proxies will result in a
change of control of American Bankers. In no way will the proxies granted to
Cendant give it "the power to direct or cause the direction of the management
and policies" of American Bankers. To the contrary, Cendant's Proxy Statement
makes clear that it solicits revocable proxies only for the limited purpose of
voting for or against the AIG Merger Proposal -- not in favor of any
transaction with Cendant.7

         A mere revocable proxy to vote on the AIG merger proposal, without
more, does not confer any control over the stock or voting rights associated
with the stock other than the sole issue of the merger. AIG fails to
distinguish between the right or attempt to acquire a voting security versus
the right or attempt to acquire a revocable voting proxy on a singular issue.
See

- ---------
7   Thus, there is not even a hypothetical possibility that Cendant, as a
    result of its solicitation proxies, would be in a position to direct the
    management and policies of American Bankers.

                                       11



Johnson v. Spartanburg County Fair Ass'n, 210 S.C. 56, 41 S.E.2d 599 (1947). In
distinguishing between proxy and a voting trust, the court stated:

    The usual proxy merely establishes a relation of principal and agent
    terminable by the principal at will either through revocation or through
    sale of his stock. The voting trust agreement vests in the trustees an
    interest in the stock which the original owner obviously is unable to
    nullify by any sale of the stock and which he cannot otherwise cancel
    except through an attempt breach of contract. The holder of a proxy has no
    control over the stock itself, while the voting trustees have the
    possession of the stock as well as the legal title to it. The proxy creates
    a relation of a temporary character under the restrictive statutory
    authority; the voting trust is created without the need of statutory
    license, and confers, not a revocable authority upon an agent, but a
    qualified title upon a transferee of property.'

Johnson, 210 S.C. at 71, 41 S.E. at 605-06 (emphasis added)

         Indeed, receipt of proxies by Cendant will not give it any "control"
at all, since it will have no discretion to do other than vote shares in
accordance with the instructions of the American Bankers stockholders who grant
it proxies. Under the Texas statute, for instance, it has been held that
"[c]ontrol in fact is predicated on a finding of controlling influence and a
need for protection of the insurer's policyholders and shareholders and the
public." American General Corp. v. NLT Corp., 1982 WL 1332, at *20 (S.D. Tex.
July 1, 1982). Since Cendant can exercise no "controlling influence" and
American Bankers shareholders hardly need to be protected from Cendant voting
shares as the shareholders themselves direct, Cendant's proxy solicitation will
not effect a change of control.

         Thus, even assuming that there is a statutory presumption of control
arising from the holding of proxies, it must be deemed rebutted by the face of
Cendant's proxy materials. AIG's claim fails as a matter of law.

                                       12



    C.   THE NEW DISCLOSURE OF CONTROL CLAIM FAILS TO STATE A CLAIM FOR RELIEF

         AIG's Disclosure of Control claim should be dismissed for the
additional reason that Cendant is not required to disclose AIG's contrary
opinions and beliefs regarding the regulatory approval process. See Exhibit A
at 17-24.

VI. PLAINTIFFS HAVE NO STANDING TO ALLEGE A VIOLATION
    OF SECTION 5 OF THE EXCHANGE ACT.

         Plaintiffs continue to allege that Defendants violated Section 5 of
the Securities Act of 1933, 15 U.S.C. ss.ss. 77c(a) and (c), by making
statements regarding the superiority of the Cendant bid to the AIG Merger
Proposal prior to the filing of a registration statement covering the Cendant
stock that would be offered to American Bankers shareholders in a second step
merger. This point was briefed on pages 24 through 26 of Cendant's Memorandum
in Support of Motion to Dismiss. Cendant respectfully refers the Court to those
pages.

                                       13



                                   CONCLUSION

         For the foregoing reasons, the defendants respectfully request that
their Motion to Dismiss be granted.

Dated:  February 18, 1998.
                                            Respectfully submitted,

Of Counsel:                                 SHUTTS & BOWEN LLP
Jonathan J. Lerner                          1500 Miami Center
Samuel Kadet                                201 South Biscayne Boulevard
Seth M. Schwartz                            Miami, Florida  33131
SKADDEN, ARPS, SLATE,                       Telephone:  305-358-6300
  MEAGHER & FLOM LLP                        Facsimile:   305-381-9982
919 Third Avenue
New York, New York  10022
Telephone:  212-735-3000
Facsimile:  212-735-2000
                                            By: /s/ Robert T. Wright, Jr.
                                               -------------------------------
                                               Robert T. Wright, Jr.
                                               Florida Bar No. 185525

                                            Attorneys for Defendants Cendant
                                            Corporation and Season Acquisition
                                            Corp.

                                       14



                             CERTIFICATE OF SERVICE

         I HEREBY CERTIFY that a true and correct copy of the foregoing Motion
to Dismiss has been served this 18TH day of FEBRUARY, 1998, upon the following:


VIA HAND-DELIVERY TO:                        VIA FACSIMILE AND U.S. MAIL TO:
Lewis F. Murphy, Esq.                        Richard H. Klapper, Esq.       
Steel, Hector & Davis LLP                    SULLIVAN & CROMWELL            
Co-Counsel for AIG and AIGF                  Co-Counsel for AIG and AIGF    
200 South Biscayne Boulevard                 125 Broad Street               
First Union Financial Center, Suite 4000     New York, New York 10004-2498  
Miami, Florida 33131-2398                    Facsimile:  (212) 558-4000     
                                             

                                             /s/ Robert T. Wright, Jr.
                                             ---------------------------------

                                       15



                                STATE OF FLORIDA
                            DEPARTMENT OF INSURANCE

In re:  Application for Approval of the Acquisition
of a Controlling Interest (Form D14-918) filed by
CENDANT CORPORATION and SEASON ACQUISITION
CORP. Relating to American Bankers Insurance Company of
Florida, American Bankers Life Assurance Company of Florida
and Voyager Service Warranties, Inc., Domestic Insurers

____________________________________________________________/



                     SEASON'S RESPONSE TO AMERICAN BANKERS'
                             REQUEST FOR A HEARING

         Cendant Corporation and Season Acquisition Corp., its wholly-owned
subsidiary (collectively, "Season"), hereby submit this memorandum in response
to the request by American Bankers Insurance Company of Florida and American
Bankers Life Assurance Company of Florida (collectively, "American Bankers")
for a hearing, pursuant to Section 628.461(5)(a), Florida Statutes, on Season's
Form A Application. American Bankers' request is untimely, and therefore
American Bankers is not entitled to a hearing as a matter of right.
Nevertheless, Season has no objection to a hearing on its Form A Application
that is consolidated with the hearing on AIG's Form A Application to which
Season is entitled. As a party whose substan tial interests will be affected by
the Department's decision on AIG's Form A Applica tion, Season has a statutory
right to request a hearing on that application (as it has done) and to
participate as a party in that hearing.



                     AMERICAN BANKERS' REQUEST IS UNTIMELY

         1. Section 628.461(1)(a), Florida Statutes, requires that a person
seeking approval to acquire a controlling interest in a Florida domestic
insurer provide notice of its application for approval to the domestic insurer
by sending a copy of the Form A application filed with the Department to the
domestic insurer.

         2. Section 628.461(5)(a), Florida Statutes, provides that the
Department may, on its own, schedule a hearing on a Form A application, or
shall schedule a hearing if requested to do so by a substantially affected
party. In order for a substantially affected party to request a hearing,
however, the statute requires that

         [the] written request for a proceeding must be filed with the
         department within 10 days of the date of no tice of the [Form A
         application] filing is given.

         3. Season filed its Form A Application seeking approval of its
acquisition of a controlling interest in American Bankers on January 27, 1998.
On that same day, in compliance with the requirements of Section 628.461(1)(a),
Season sent a copy of its Form A Application to American Bankers by Federal
Express overnight delivery. The Form A Application was received by American
Bankers on January 28, 1998. Copies of Season's cover letter to American
Bankers and the Federal Express confirmations of delivery are attached as
Exhibit A. Therefore, for purposes of Section 628.461(5)(a), American Bankers
received notice of Season's Form A Application on January 28, 1998.

                                       2



         4. American Bankers did not, however, request a proceeding on Season's
Form A Application within the ten-day period mandated by Section 628.461(5)(a).
The ten-day period ended on February 7, 1998. Because February 7 was a
Saturday, American Bankers arguably had until Monday, February 9, 1998, to make
its request. It failed to do so.

         5. American Bankers' request for a proceeding is curiously undated. A
copy of the request is attached as Exhibit B. The request, however, is stamped
"received" by the Department's Division of Insurer Services on February 10,
1998, and "received" by the Department's Division of Legal Services February
13, 1998. Thus, American Bankers' request was made outside the ten-day time
period mandated by statute.

         6. Because American Bankers' did not meet the statutory deadline, the
Department is not required to hold a hearing on Season's Form A Application
pursuant to American Bankers' belated request. Section 628.461(5)(a), Florida
Statutes.

                        SEASON'S REQUEST TO CONSOLIDATE
                      AND FOR A HEARING SHOULD BE GRANTED

         7. Although the Department is not required to hold a hearing on
Season's Form A Application pursuant to American Bankers' belated request, the
Department retains the authority to do so. Season has no objection to such a
hearing

                                       3



that is held jointly with the hearing on AIG's Form A Application to which
Season, as a party substantially affected by that application, is entitled.

         8. As more fully set forth in Season's reply papers recently filed
with the Department, American Bankers' request for a hearing in the Season Form
A proceedings was no more than an improper attempt to gain procedural advantage
for its proposed merger partner, AIG. American Bankers contracted with AIG to
use its "best efforts" to ensure the success of the AIG/American Bankers
merger, and to allow AIG not only to participate in American Bankers' decision
to request a hearing on Season's Form A Application, but also to control
American Bankers' conduct in that hearing.

         9. Significantly, American Bankers has not requested a hearing on
AIG's Form A Application. As set forth more fully in Season's prior submissions
to the Department, American Bankers and AIG thus attempt to manipulate the
Department's procedural rules by seeking to delay the Department's
consideration of Season's Form A Application while permitting AIG's Form A
Application to proceed unfettered.

         10. By failing to make a timely request for a hearing, however, AIG
and American Bankers have lost their opportunity to obtain unfair procedural
advantage. Now, only the Department can decide whether to hold a hearing on
Season's Form A Application pursuant to Section 628.461(5)(a). Season does not

                                       4



oppose the Department's doing so, in a hearing that is combined with a hearing
on AIG's Form A Application.

         11. As a party who will be substantially affected by the Depart ment's
action on AIG's Form A Application, Season is entitled to a hearing on that
application, and Season has made a proper request for this hearing. As set
forth more fully in Season's prior submissions, Season respectfully asserts
that due to the nature of these competing applications and the immediate harm
threatened to Season by consideration of AIG's application before Season's, the
most appropriate course for the Department to take is to consolidated, hear
jointly and simultaneously decide both applications.

                               REQUEST FOR RELIEF

         For the reasons stated herein, the Department should deny American
Bankers' request to hold a hearing on Season's Form A Application. Season does
not oppose a joint hearing on, and simultaneous decision of, Season's and AIG's
Form A Applications.

                                            MAIDA, GALLOWAY & NEAL, P.A.

  
                                         By: /s/ Thomas J. Maida
                                            --------------------------------
                                            Thomas J. Maida
                                            Florida Bar No. 275212
                                            300 East Park Avenue
                                            P.O. Box 1819
                                            Tallahassee, Florida  32302

                                       5




Of counsel:
     
     Stephen T. Maher
     Shutts & Bowen
     1500 Miami Center
     201 South Biscayne Boulevard
     Miami, Florida  33131


                                       6