Filed by CII Financial, Inc.
                                          Pursuant to Rule 425
                                          under the Securities Act of 1933
                                          For:  CII Financial, Inc.
                                          Commission File No.:  333-52726


                               CII FINANCIAL, INC.
                     California Indemnity Insurance Company
                      Commercial Casualty Insurance Company
                  subsidiaries of Sierra Health Services, Inc.
                   P.O.Box 15645, Las Vegas, Nevada 89114-5645



                                  PRESS RELEASE

FOR IMMEDIATE RELEASE

CONTACTS:   John F. Okita               Andrew C. Karp
            Chief Financial Officer     Managing Director
            (702) 242-7531              Banc of America Securities LLC
                                        High Yield Special Products
                                        (704) 388-4813 or (888) 292-0070

                    CII FINANCIAL ANNOUNCES FILING OF AMENDED
                    REGISTRATION STATEMENT AND EXTENSION OF
                  EXCHANGE OFFER FOR CONVERTIBLE SUBORDINATED
                                   DEBENTURES

         Las Vegas, March 1, 2001 - CII Financial,  Inc. today announced that it
had filed an amended  Registration  Statement  with the  Securities and Exchange
Commission dated March 1, 2001 in connection with its pending exchange offer for
all $47 million of its outstanding 7 1/2%  convertible  subordinated  debentures
due  September  15, 2001 (CUSIP No.  12551LAB7).  In addition,  the Company also
announced the extension of the expiration date of the offer.

         The expiration  date for the exchange offer has been extended from 5:00
p.m., New York City time, on March 6, 2001, to 5:00 p.m., New York City time, on
March 22, 2001. The Company said all other terms of the offer remain unchanged.

         The Company said that as of 5:00 p.m.,  New York City time, on February
28, 2001,  it had received  tenders  from  holders of  $13,785,000  in aggregate
principal amount of debentures.

         The  complete   terms  of  the  offer  are  contained  in  the  amended
Preliminary Prospectus and Exchange Offer dated March 1, 2001.

         Banc of America Securities LLC is the exclusive dealer manager for the
offer.  D.F. King & Co., Inc. is the information agent and Wells Fargo Corporate
Trust is the depositary.  Copies of the Preliminary Prospectus and Exchange
Offer may be obtained by calling D.F. King at (800) 735-3591.
Additional information concerning the terms and conditions of the offer
may be obtained by contacting Banc of America Securities LLC at (888) 292-0070.

                                   ---more---
CII Announces Extension p.2/2/2/2/2

         CII  Financial  is a  holding  company  primarily  engaged  in  writing
workers'  compensation  insurance in nine western and mid-western states through
its  wholly  owned   subsidiaries,   California   Indemnity  Insurance  Company,
Commercial Casualty Insurance Company, Sierra Insurance Company of Texas and CII
Insurance  Company.  CII Financial is a wholly owned subsidiary of Sierra Health
Services,  Inc. (NYSE:SIE),  a diversified health care services company based in
Las Vegas.

         Statements  in this  news  release  that are not  historical  facts are
forward-looking   and  based  on  management's   projections,   assumptions  and
estimates;  actual results may vary materially.  Forward-looking  statements are
subject to certain  risks and  uncertainties,  some of which may be found in the
Preliminary  Prospectus  and Exchange Offer and other  documents  filed with the
Securities  and  Exchange  Commission  and  which  are  incorporated  herein  by
reference.

         Additional Information and Where to Find It:

         CII  Financial,  Inc.  has  filed a  Registration  Statement  with  the
Securities and Exchange Commission on Form S-4 registering the new debentures to
be issued in the exchange offer. The Registration  Statement and the preliminary
prospectus contained therein contain important  information about CII Financial,
the exchange offer and related  matters.  Security holders are urged to read the
Registration  Statement and the preliminary  prospectus  contained therein,  CII
Financial's  Schedule TO and any other relevant documents filed by CII Financial
with the SEC.

         The  Registration  Statement  has not  yet  become  effective.  The new
debentures  may not be sold and,  although  you may tender your old  debentures,
tenders may not be accepted prior to the time the Registration Statement becomes
effective.  This  shall not  constitute  an offer to sell or an offer to buy nor
shall there be any sale of the new  debentures in any State in which such offer,
solicitation or sale would be unlawful.

         Security  holders  are  able  to  obtain  copies  of  the  Registration
Statement on Form S-4 and the preliminary  prospectus,  CII Financial's Schedule
TO and any other relevant  documents for free through the Web site maintained by
the SEC at http://www.sec.gov.  In addition,  these documents are available free
of charge by contacting the Information Agent for the offer, D.F. King & Co., at
(800)  735-3591.  If you have any  questions  about the offer,  please  call the
Dealer Manager for the offer, Banc of America Securities LLC, at (888) 292-0070.

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