Industrial Alliance Preferred Share Issue

    /Not for distribution to U.S. news wire services or dissemination in the
    United States./

    QUEBEC CITY, Nov. 17 /CNW Telbec/ - Industrial Alliance Insurance and
Financial Services Inc. ("Industrial Alliance" or the "Company") has today
entered into an agreement with a syndicate of underwriters led by Scotia
Capital Inc. under which the underwriters have agreed to buy, on a bought deal
basis, 4,000,000 Non-Cumulative 5-Year Rate Reset Class A Preferred Shares
Series C (the "Series C Preferred Shares") from Industrial Alliance for sale
to the public at a price of $25.00 per Series C Preferred Share, representing
aggregate gross proceeds of $100 million.
    Industrial Alliance has granted an option to the underwriters,
exercisable by the underwriters at any time up to 48 hours prior to closing of
the offering, to purchase up to an additional 600,000 Series C Preferred
Shares, representing $15 million at the Issue Price.
    Holders of the Series C Preferred Shares will be entitled to receive a
non-cumulative quarterly fixed dividend of $0.3875 per Series C Preferred
Share, yielding 6.20% per annum, as and when declared by the Board of
Directors of the Company, for an initial period ending December 31, 2013. On
December 31, 2013 and on December 31 every five years thereafter, the dividend
rate will reset to be equal to the then current five-year Government of Canada
bond yield plus 3.38%. Holders of the Series C Preferred Shares will have the
right to convert their shares into Non-Cumulative Floating Rate Class A
Preferred Shares Series D (the "Series D Preferred Shares"), subject to
certain conditions and the Company's right to redeem the Series C Preferred
Shares as described below, on December 31, 2013 and on December 31 every five
years thereafter.
    Holders of the Series D Preferred Shares will be entitled to receive a
quarterly non-cumulative floating rate dividend, as and when declared by the
Board of Directors of the Company, equal to the 90-day Government of Canada
Treasury Bill Rate plus 3.38%. Holders of the Series D Preferred Shares will
have the right to convert their shares into Series C Preferred Shares, subject
to certain conditions and the Company's right to redeem the Series D Preferred
Shares as described below, on December 31, 2018 and on December 31 every five
years thereafter.
    The Series C Preferred Shares will not be redeemable by Industrial
Alliance prior to December 31, 2013. On December 31, 2013 and on December 31
every five years thereafter, Industrial Alliance may, subject to certain
conditions (including regulatory approval), redeem all or any part of the
Series C Preferred Shares at a cash redemption price per share of $25.00
together with all declared and unpaid dividends. The Company may redeem all or
any part of the Series D Preferred Shares at a cash redemption price per share
of $25.00 together with all declared and unpaid dividends in the case of
redemptions on December 31, 2018 and on December 31 every five years
thereafter or $25.50 together with all declared and unpaid dividends in the
case of redemptions on any other date after December 31, 2013.
    The Series C Preferred Share offering is expected to close on or about
November 25, 2008. The net proceeds will be used for general corporate
purposes and will be added to Industrial Alliance's capital base.
    According to pro forma data as at September 30, 2008, a $100 million
preferred share issue will increase Industrial Alliance's solvency ratio from
200% to 210% and a $115 million issue will increase it from 200% to 212%.

    Notice

    The securities offered have not been and will not be registered under the
U.S. Securities Act of 1933, as amended, and may not be offered or sold in the
United States absent registration or an applicable exemption from the
registration requirements. This press release shall not constitute an offer to
sell or the solicitation of an offer to buy nor shall there be any sale of the
securities in any State in which such offer, solicitation or sale would be
unlawful.

    Forward-Looking Statements

    This news release may contain forward-looking statements about the
operations, objectives and strategies of Industrial Alliance, as well as its
financial situation and performance. The forward-looking nature of these
statements can generally, though not always, be identified by the use of words
such as "may," "expect," "anticipate," "intend," "believe," "estimate,"
"feel," "continue," or other similar expressions, in the affirmative, negative
or conditional. Unless otherwise indicated, any forward-looking information
that presents prospective results of operations, financial position or cash
flows was approved by management on the date of this news release.
Forward-looking statements entail risks and uncertainties that may cause the
actual results, performance or achievements of Industrial Alliance to differ
materially from the future results, performance or achievements expressed or
implied by the forward-looking statements. Factors that could cause the
Company's actual results to differ from expected results include changes in
government regulations or tax laws, competition, technological changes, global
capital market activity, interest rates, changes in demographic data, changes
in consumer behaviour and demand for the Company's products and services,
catastrophic events, and general economic conditions in Canada or elsewhere in
the world. A description of significant factors that could affect
forward-looking statements is contained in the Management's Discussion and
Analysis section of the Company's most recent annual report. This list is not
exhaustive of the factors that may affect any of Industrial Alliance's
forward-looking statements. These and other factors must be examined carefully
and readers should not place undue reliance on Industrial Alliance's
forward-looking statements. Where the forward-looking statements are presented
as guidance regarding the future financial results of Industrial Alliance,
they are provided to help investors understand the impact on earnings of the
Company's current plans and objectives. The Company may also provide
objectives from time to time. An objective should be interpreted as a
statement of management's goals in managing the Company, and not necessarily
as a forecast that the objective will be met. Industrial Alliance is not
obligated to revise or update these forward-looking statements to reflect
events, circumstances or situations that occur after the date of this news
release, whether foreseeable or not, except as required by applicable
securities legislation.

    About Industrial Alliance

    Founded in 1892, Industrial Alliance Insurance and Financial Services
Inc. is a life and health insurance company that offers a wide range of life
and health insurance products, savings and retirement plans, RRSPs, mutual and
segregated funds, securities, auto and home insurance, mortgage loans and
other financial products and services. The fourth largest life and health
insurance company in Canada, Industrial Alliance is at the head of a large
financial group, which has operations across Canada as well as in the Western
United States. Industrial Alliance contributes to the financial wellbeing of
over 3 million Canadians, employs more than 3,300 people and manages and
administers over $50 billion in assets. Industrial Alliance stock is listed on
the Toronto Stock Exchange under the ticker symbol IAG. Industrial Alliance is
among the 100 largest public companies in Canada.

For further information: Jacques Carrière, Vice-President, Investor
Relations, (418) 684-5275, cell: 418 576-3624, jacques.carriere@inalco.com;
www.inalco.com