<PAGE>

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

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

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

                                    FORM 10-Q
(Mark One)
   /X/      Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
            Exchange Act of 1934

                       FOR THE QUARTER ENDED JUNE 30, 2003

   / /      Transition report pursuant to Section 13 or 15(d) of the Securities
            Exchange Act of 1934

For the Period From _________ to __________.

                        Commission File Number: 001-14593
                                                ---------

                          THE MIIX GROUP, INCORPORATED
             (Exact name of Registrant as specified in its charter)

           DELAWARE                                          22-3586492
(State or other jurisdiction of                          (I.R.S. employer
incorporation or organization)                         identification number)


               TWO PRINCESS ROAD, LAWRENCEVILLE, NEW JERSEY 08648
               --------------------------------------------------
              (Address of principal executive offices and zip code)

                                 (609) 896-2404
                                 --------------
              (Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
                                         Common Stock, par value $0.01 per share
                                         ---------------------------------------
Securities registered pursuant to Section 12(g) of the Act: None
                                                            ----

     Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter periods as the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

                                YES  X    NO
                                    ---      ---

     Indicate by check mark whether the Registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).

                                YES       NO  X
                                    ---      ---

     As of August 11, 2003, the number of outstanding shares of the Registrant's
Common Stock was 14,564,143.

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

<PAGE>

TABLE OF CONTENTS
-----------------

PART I    FINANCIAL INFORMATION................................................4

ITEM 1.   CONSOLIDATED FINANCIAL STATEMENTS....................................4

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS...............................................13

ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK..........22

ITEM 4.   CONTROLS AND PROCEDURES.............................................23

PART II   OTHER INFORMATION...................................................23

ITEM 1.   LEGAL PROCEEDINGS...................................................23

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.................25

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K....................................26

SIGNATURES....................................................................27










                                                                               2

<PAGE>

This Form 10-Q contains forward-looking statements that are based on the
Company's estimates and expectations concerning future events and anticipated
results and are subject to certain risks and uncertainties that could cause
actual results to differ materially from those reflected in the forward-looking
statements. These forward-looking statements are subject to uncertainties and
other factors that could cause actual results to differ materially from such
statements. The Company's ability to manage successfully the solvent runoff of
its business is subject to a number of contingencies and uncertainties. These
uncertainties and other factors are detailed from time to time in the Company's
filings with the appropriate securities commissions, and include, without
limitation, the Company having sufficient liquidity and working capital, the
performance of the Company's investment portfolio, the Company's ability to
manage claims, maintaining existing reinsurance agreements at reasonable terms,
the continued adequacy of the Company's loss and loss adjustment expense
reserves, the Company's avoidance of any material loss on collection of
reinsurance recoverables, actions of applicable regulatory agencies, general
economic conditions, including changing interest rates, rates of inflation and
the performance of the financial markets, judicial decisions and rulings,
changes in domestic and foreign laws, regulations and taxes, effects of
acquisitions and divestitures, and various other factors. The words "believe,"
"expect," "anticipate," "project" and similar expressions identify
forward-looking statements. The Company's expectations regarding future
earnings, growth initiatives, underwriting, cost controls, adequacy of loss and
loss adjustment expense reserves, and enhancing shareholder value depend on a
variety of factors, including economic, competitive and market conditions which
may be beyond the Company's control and are thus difficult or impossible to
predict. In light of the significant uncertainties inherent in the
forward-looking information herein, the inclusion of such information should not
be regarded as representation by the Company or any other person that the
Company's objectives or plans will be realized. Readers are cautioned not to
place undue reliance on these forward-looking statements, which speak only as of
their dates. The Company undertakes no obligation to publicly update or revise
any forward-looking statements, whether as a result of new information, future
events or otherwise.











                                                                               3
<PAGE>

PART I   FINANCIAL INFORMATION

ITEM 1.  CONSOLIDATED FINANCIAL STATEMENTS

                         REPORT OF INDEPENDENT AUDITORS

Board of Directors
The MIIX Group, Incorporated

We have reviewed the accompanying consolidated balance sheet of The MIIX Group,
Incorporated and subsidiaries as of June 30, 2003, and the related consolidated
statements of income for the three and six month periods ended June 30, 2003 and
2002, and the consolidated statements of cash flows for the six month periods
ended June 30, 2003 and 2002 and the consolidated statement of stockholders'
equity for the six month period ended June 30, 2003. These consolidated
financial statements are the responsibility of the Company's management.

We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data, and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with auditing standards generally accepted in the United States,
which will be performed for the full year with the objective of expressing an
opinion regarding the financial statements taken as a whole. Accordingly, we do
not express such an opinion.

Based on our reviews, we are not aware of any material modifications that should
be made to the accompanying consolidated financial statements as of June 30,
2003 and for the three month and six month periods ended June 30, 2003 and 2002
for them to be in conformity with accounting principles generally accepted in
the United States.

We have previously audited, in accordance with auditing standards generally
accepted in the United States, the consolidated balance sheets of The MIIX
Group, Incorporated and subsidiaries as of December 31, 2002 and 2001, and the
related consolidated statements of income, stockholders' equity and cash flows
for each of the three years in the period ended December 31, 2002, not presented
herein, and in our report dated March 21, 2003, we expressed an unqualified
opinion on those consolidated financial statements; however, we referred in our
report to disclosures in the Notes to the December 31, 2002 consolidated
financial statements the potential consequences of which raised substantial
doubt about the Company's ability to continue as a going concern. In our
opinion, the information set forth in the accompanying consolidated balance
sheet as of December 31, 2002, is fairly stated, in all material respects, in
relation to the consolidated balance sheet as of December 31, 2002, from which
it has been derived.

                                       ERNST & YOUNG LLP

New York, New York
July 30, 2003

                                                                               4
<PAGE>

<TABLE>
<CAPTION>
                                           THE MIIX GROUP, INCORPORATED

                                            CONSOLIDATED BALANCE SHEETS
                                       (IN THOUSANDS, EXCEPT SHARE AMOUNTS)

                                                                                      JUNE 30,     DECEMBER 31,
                                                                                    ---------------------------
                                                                                        2003           2002
                                                                                    ------------   ------------
                                     ASSETS                                         (Unaudited)
<S>                                                                                    <C>             <C>
Securities available-for-sale:
   Fixed-maturity investments, at fair value (amortized cost: 2003 -
     $659,366; 2002 - $771,414)                                                      $  680,857      $  788,580
   Equity investments, at fair value (cost: 2003 - $2,781; 2002 - $4,804)                 3,176           5,187
   Short-term investments, at cost which approximates fair value.............           217,391         262,537
                                                                                     ----------      ----------
         Total investments...................................................           901,424       1,056,304
                                                                                     ----------      ----------

Cash.........................................................................            10,861           4,667
Accrued investment income....................................................             7,002           8,339
Premium receivable, net......................................................             1,353           7,602
Reinsurance recoverable on unpaid losses.....................................           378,036         457,005
Prepaid reinsurance premiums ................................................             2,127           3,053
Reinsurance recoverable on paid losses, net..................................            27,485          31,822
Deferred policy acquisition costs............................................                 0           1,016
Receivable for securities....................................................            27,742               0
Other assets.................................................................            45,205          47,055
                                                                                     ----------      ----------
         Total assets........................................................        $1,401,235      $1,616,863
                                                                                     ==========      ==========

                      LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Unpaid losses and loss adjustment expenses...................................        $1,010,745      $1,151,635
Unearned premiums............................................................             2,765          25,262
Premium deposits.............................................................                 0             209
Funds held under reinsurance treaties........................................           266,228         332,741
Payable for securities.......................................................             7,160               0
Other liabilities............................................................            58,845          65,750
                                                                                     ----------      ----------
         Total liabilities...................................................         1,345,743       1,575,597
                                                                                     ----------      ----------
COMMITMENTS AND CONTINGENT LIABILITIES

STOCKHOLDERS' EQUITY
Preferred stock, $0.01 par value, 50,000,000 shares authorized, no shares
   issued and outstanding....................................................                 0               0
Common stock, $0.01 par value, 100,000,000 shares authorized, 16,538,005 shares
   issued (2003 - 14,564,143 shares outstanding; 2002 - 13,382,173 shares
   outstanding)..............................................................               166             166
Additional paid-in capital...................................................            40,270          53,909
Retained earnings............................................................            27,982          13,323
Treasury stock, at cost (2003 - 1,973,862 shares; 2002 - 3,155,832 shares)...           (25,038)        (40,199)
Stock purchase loans and unearned stock compensation.........................            (5,336)         (3,662)
Accumulated other comprehensive income.......................................            17,448          17,729
                                                                                     ----------      ----------
         Total stockholders' equity..........................................            55,492          41,266
                                                                                     ----------      ----------
         Total liabilities and stockholders' equity..........................        $1,401,235      $1,616,863
                                                                                     ==========      ==========

SEE ACCOMPANYING NOTES
                                                                                                              5
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
                                           THE MIIX GROUP, INCORPORATED

                                         CONSOLIDATED STATEMENTS OF INCOME
                                     (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
                                                    (UNAUDITED)

                                                            THREE MONTHS ENDED                    SIX MONTHS ENDED
                                                                  JUNE 30,                             JUNE 30,
                                                     ---------------------------------    ---------------------------------
                                                         2003                2002              2003               2002
                                                     --------------      -------------    ---------------    --------------
<S>                                                       <C>                 <C>              <C>               <C>
REVENUES
Net premiums earned..............................         $ 7,277             $49,083          $27,137           $ 86,236
Net investment income............................           8,915              16,158           19,860             34,407
Realized investment gains (losses)...............           4,359                 222            2,355             (1,281)
Other revenue....................................           1,485               1,467            3,123              4,283
                                                          -------             -------          -------           --------
    Total revenues...............................          22,036              66,930           52,475            123,645
                                                          -------             -------          -------           --------
EXPENSES
Losses and loss adjustment expenses..............           4,600              54,497           21,563            136,301
Underwriting expenses............................           4,676              10,624           10,419             21,364
Funds held charges...............................           5,543               7,528            9,678             22,287
Other expenses...................................             223                 396              469              1,670
Restructuring charge.............................               0                   0                0              2,552
                                                          -------             -------          -------           --------
    Total expenses...............................          15,042              73,045           42,129            184,174
                                                          -------             -------          -------           --------

Income (loss) before income taxes................           6,994              (6,115)          10,346            (60,529)
Income tax provision (benefit)...................          (2,425)                  5           (4,313)           (11,416)
                                                          -------             -------          -------           --------
    Net income (loss) before cumulative effect
       of an accounting change...................           9,419              (6,120)          14,659            (49,113)
    Cumulative effect of an accounting change,
       net of tax................................               0                   0                0             (2,373)
                                                          -------             -------          -------           --------
    Net income (loss) ...........................         $ 9,419             $(6,120)         $14,659           $(51,486)
                                                          =======             =======          =======           ========

Basic earnings (loss) per share before
  cumulative effect of an accounting change......         $  0.70             $ (0.45)         $  1.10           $  (3.67)
Cumulative effect of an accounting change........            0.00                0.00             0.00              (0.18)
                                                          -------             -------          -------           --------
Basic earnings (loss) per share..................         $  0.70             $ (0.45)         $  1.10           $  (3.85)
                                                          =======             =======          =======           ========

Diluted earnings (loss) per share before
  cumulative effect of an accounting change......         $  0.65             $ (0.45)         $  1.03           $  (3.67)
Cumulative effect of an accounting change........            0.00                0.00             0.00              (0.18)
                                                          -------             -------          -------           --------
Diluted earnings (loss) per share................         $  0.65             $ (0.45)         $  1.03           $  (3.85)
                                                          =======             =======          =======           ========

Dividend per share of common stock...............         $  0.00             $  0.00          $  0.00           $   0.00
                                                          =======             =======          =======           ========
SEE ACCOMPANYING NOTES
                                                                                                                         6
</TABLE>

<PAGE>

<TABLE>
<CAPTION>

                                                     THE MIIX GROUP, INCORPORATED

                                                   CONSOLIDATED STATEMENT OF EQUITY
                                                FOR THE SIX MONTHS ENDED JUNE 30, 2003
                                                  (IN THOUSANDS, EXCEPT SHARE AMOUNTS)
                                                              (UNAUDITED)


                                                                                         STOCK
                                                                                        PURCHASE
                                                                                        LOANS AND     ACCUMULATED
                               NUMBER OF            ADDITIONAL                           UNEARNED        OTHER          TOTAL
                                 SHARES     COMMON   PAID-IN    RETAINED    TREASURY      STOCK      COMPREHENSIVE  STOCKHOLDERS'
                              OUTSTANDING    STOCK   CAPITAL    EARNINGS     STOCK     COMPENSATION   INCOME (LOSS)     EQUITY
                              ------------ -------- ---------- ---------- ----------- -------------- --------------- ------------
<S>                            <C>            <C>     <C>        <C>        <C>           <C>              <C>           <C>
Balance at January 1, 2003...  13,382,173     $166    $53,909    $13,323    $(40,199)     $(3,662)         $17,729       $41,266
 Net income..................                                     14,659                                                  14,659

 Other comprehensive
   income (loss), net of
   tax:......................

  Net unrealized
   depreciation on
   securities available-
   for-sale, net of
   deferred taxes............                                                                                 (281)         (281)

  Stock purchase and loan
   agreement activities......      (8,922)                                        (8)        (144)                          (152)

  Stock compensation and
   treasury stock activity...   1,190,892             (13,639)                15,169       (1,530)                             0
                               ----------     ----    -------    -------    --------      -------          -------       -------
 Balance at June 30, 2003....  14,564,143     $166    $40,270    $27,982    $(25,038)     $(5,336)         $17,448       $55,492
                               ==========     ====    =======    =======    ========      =======          =======       =======


SEE ACCOMPANYING NOTES









                                                                                                                                 7
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
                                            THE MIIX GROUP, INCORPORATED

                                        CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                   (IN THOUSANDS)
                                                     (UNAUDITED)

                                                                                             SIX MONTHS ENDED
                                                                                                 JUNE 30,
                                                                                     ----------------------------------
                                                                                          2003               2002
                                                                                     ---------------     --------------
<S>                                                                                    <C>                   <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)................................................................      $    14,659           $ (51,486)
Adjustments to reconcile net income (loss) to net cash provided by operating
     activities:
Cumulative effect of an accounting change, net of tax............................                0               2,373
Unpaid losses and loss adjustment expenses.......................................         (140,890)             11,088
Unearned premiums................................................................          (22,497)             (3,922)
Premium deposits.................................................................             (209)            (18,928)
Premium receivable, net..........................................................            6,249             (14,287)
Reinsurance balances, net........................................................           17,719               5,288
Deferred policy acquisition costs................................................            1,016               1,140
Realized investment (gains) losses...............................................           (2,355)              1,281
Depreciation, accretion and amortization.........................................            1,569              (1,371)
Accrued investment income........................................................            1,337               1,884
Net investment in direct financing leases........................................                0              32,101
Other assets.....................................................................           (2,767)             16,515
Other liabilities................................................................           (7,058)            (20,909)
                                                                                       -----------         -----------
Net cash used in operating activities............................................         (133,227)            (39,233)
                                                                                       -----------         -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from fixed-maturity investment sales....................................          306,833             522,757
Proceeds from fixed-maturity investments matured, called or prepaid..............           97,590              66,010
Proceeds from equity investment sales............................................            2,023                   5
Cost of investments acquired.....................................................         (291,589)           (438,099)
Change in short-term investments, net............................................           45,146            (113,125)
Net (payable) receivable for securities..........................................          (20,582)             11,005
                                                                                       -----------         -----------
Net cash provided by investing activities........................................          139,421              48,553
                                                                                       -----------         -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of notes payable and other borrowings..................................                0             (10,699)
                                                                                       -----------         -----------
Net cash used in financing activities............................................                0             (10,699)
                                                                                       -----------         -----------

Net change in cash...............................................................            6,194              (1,379)
Cash, beginning of period........................................................            4,667               2,029
                                                                                       -----------         -----------
Cash, end of period..............................................................      $    10,861         $       650
                                                                                       ===========         ===========

SEE ACCOMPANYING NOTES
                                                                                                                      8
</TABLE>
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. BASIS OF PRESENTATION
------------------------

The accompanying consolidated financial statements include the accounts and
operations of The MIIX Group, Incorporated (The "MIIX Group") and its
wholly-owned subsidiaries, MIIX Insurance Company ("MIIX"), Lawrenceville
Holdings, Inc. ("LHI"), Lawrenceville Property and Casualty Company ("LP&C"),
MIIX Insurance Company of New York ("MIIX New York") and New Jersey State
Medical Underwriters, Inc. and its wholly-owned subsidiaries ("Underwriters"),
collectively (the "Company"). The consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States for interim financial information, and in the opinion of
management, reflect all adjustments (recurring and non-recurring) considered
necessary for a fair presentation. Operating results for the interim period are
not necessarily indicative of the results to be expected for the full year.

These consolidated financial statements and notes should be read in conjunction
with the audited consolidated financial statements and notes of the Company for
the year ended December 31, 2002, which were filed with the Securities and
Exchange Commission on Form 10-K.

2. RECENT DEVELOPMENTS
----------------------

The Company has been subjected to a number of adverse developments as a result
of unexpected and unprecedented increases in loss and loss adjustment expense
("LAE") reserves during fiscal years 2002, 2001 and 2000 related to prior years'
experience. These increases have required the Company to increase loss reserves
in each of the last three years. For a more detailed discussion of these events,
see our Annual Report on Form 10-K for 2002.

As a result of the net losses reported in 2001, two of the Company's operating
subsidiaries triggered Risk Based Capital ("RBC") events requiring the filing of
a corrective action plan with each state of domicile. As a result, both
companies, MIIX and LP&C, entered solvent runoff. For a more detailed
description of these events, see our Annual Report on Form 10-K for 2002.

At December 31, 2002, MIIX's total adjusted capital was $18.7 million, which is
substantially below the Mandatory Control Level. MIIX requested approval from
the New Jersey Department of Banking and Insurance ("New Jersey Department") to
discount loss and LAE reserves and to merge LP&C into MIIX. Similarly, LP&C
requested approval from the Virginia Bureau of Insurance ("Virginia Bureau") to
merge LP&C into MIIX.

While the requests to merge remain pending with the regulators, the request to
discount MIIX's loss and LAE reserves on a statutory basis as of December 31,
2002 was approved by the New Jersey Department. The permissible discount rate
was three (3) percent. MIIX's RBC level will not be impacted by the ability to
discount loss and LAE reserves, as the National Association of Insurance
Commissioners ("NAIC") standards do not permit discounting of loss and LAE
reserves to be taken into account in the calculation of RBC. The discounting of
MIIX's reserves resulted in an increase to MIIX's statutory surplus, bringing
total surplus to $72.3 million as of December 31, 2002.

On February 19, 2003, MIIX agreed to certain operating limitations with the New
Jersey Department. The limitations include a requirement for approval by the New
Jersey Department prior to MIIX incurring new debt, paying dividends or
investing in below investment grade assets.

On May 1, 2003, MIIX entered into an Order with the New Jersey Department that
sets forth the framework for the regulatory monitoring of MIIX. The Order is
consistent with the February 19, 2003 letter agreement of the parties, whereby
MIIX agreed to certain limitations on operations. The limitations, among other
things, require the approval of the New Jersey Department prior to payment of
dividends by the Company's insurance subsidiary, and for lending arrangements,
investments and inter-company arrangements outside of the normal course of
business, and requires MIIX to periodically provide information relating to its
operations and finances to the New Jersey Department. See "Risks and
Uncertainties."

                                                                               9

<PAGE>

The trading of the Company's common stock was suspended at the opening of
business on April 28, 2003. The New York Stock Exchange ("NYSE") had determined
that the Company's market capitalization and stockholders' equity were below
NYSE listing thresholds. The Company was considered "below criteria" as its
total capitalization was less than $50 million over a 30-day trading period and
stockholders' equity was less than $50 million. The Company's common stock has
commenced trading on the Over-The-Counter ("OTC") Bulletin Board under the
ticker symbol "MIIX." See "Risks and Uncertainties."

The Company continues to explore any strategic alternatives that may realize
value for its shareholders, including seeking purchasers for all or portions of
its remaining assets.

3. STOCK BASED COMPENSATION
---------------------------

The Company accounts for its stock-based compensation in accordance with
Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to
Employees ("APB 25") and related interpretations. Under APB 25, because the
exercise price of the Company's employee stock options equals the market price
of the underlying stock on the date of grant, no compensation expense is
recognized. During the six months ended June 30, 2003, 24,306 options were
cancelled and 0 options were exercised. During the six months ended June 30,
2003, a former officer tendered 8,922 shares of The MIIX Group common stock and
reduced his stock purchase and loan balance to $0. All transactions were
recorded at the fair value of The MIIX Group common stock on the effective dates
of the transactions.

The following table illustrates the effect on net income and earnings per share
if the Company had applied the fair value recognition provisions of Statement of
Financial Accounting Standard ("SFAS") No. 123, "Accounting for Stock-Based
Compensation to Stock-Based Employee Compensation" for the six months ended June
30:

<TABLE>
<CAPTION>

                                                                          2003            2002
                                                                        -------         --------
    (In thousands, except per share amounts)
    ----------------------------------------
<S>                                                                     <C>             <C>
       Net income (loss), as reported                                   $14,659         $(51,486)
       Total stock-based employee compensation expense
         determined under fair value based method for all
         awards, net of related tax effects                                  19             (150)
                                                                        -------         --------
       Pro forma net gain (loss)                                        $14,678         $(51,636)
                                                                        =======         ========
       Basic earnings (loss) per share:
         As reported                                                      $1.10           $(3.85)
         Pro forma                                                         1.10            (3.85)
       Diluted earnings (loss) per share:
         As reported                                                      $1.03           $(3.85)
         Pro forma                                                         1.03            (3.85)
       Estimated weighted average of the fair value
          of options granted                                              $0.00           $ 0.47
</TABLE>

The per share weighted-average fair value of stock options was estimated at each
date of grant using a Black-Scholes option pricing model using the following
assumptions: risk-free interest rates ranging from 1.7% to 6.8%; dividend yields
ranging from 0% to 2.7%; volatility factors of the expected market price of the
Company's common stock ranging from 38.7% to 40.6%; and a three-year weighted
average expected life of the options.

4. EARNINGS PER SHARE
---------------------

Basic earnings (loss) per share are computed using the weighted-average number
of common shares outstanding of 13,363,251 and 13,469,760 for the three months
ended June 30, 2003 and 2002, respectively, and 13,366,258 and 13,398,289 for
the six months ended June 30, 2003 and 2002, respectively.

                                                                              10

<PAGE>

Diluted earnings (loss) per share are computed using the weighted-average number
of common shares outstanding of 14,564,143 and 13,478,692 for the three months
ended June 30, 2003 and 2002, respectively, and 14,196,667 and 13,477,700 for
the six months ended June 30, 2003 and 2002, respectively.

The following table sets forth the computation of basic and diluted earnings per
share:

<TABLE>
<CAPTION>
                                                            THREE MONTHS ENDED            SIX MONTHS ENDED
                                                                 JUNE 30,                     JUNE 30,
                                                        --------------------------   --------------------------
                                                            2003          2002           2003          2002
                                                        ------------  ------------   ------------  ------------
                                                              (in thousands)               (in thousands)
<S>                                                        <C>          <C>            <C>           <C>
Numerator for basic and diluted earnings (loss) per
   share of common stock:
     Net income (loss) before cumulative effect of
        an accounting change..........................     $ 9,419      $ (6,120)      $14,659       $(49,113)
     Cumulative effect of an accounting change,
        net of tax....................................           0             0             0         (2,373)
                                                           -------      --------       -------       --------
     Net income (loss) ...............................     $ 9,419      $ (6,120)      $14,659       $(51,486)
                                                           =======      ========       =======       ========

Denominator:
     Denominator for basic earnings (loss) per share
        of common stock - weighted-average shares
        outstanding...................................      13,363        13,470        13,366         13,398
Effect of dilutive securities:
     Stock options and nonvested restricted stock.....       1,201             9           831             80
                                                           -------      --------       -------       --------
     Denominator for diluted earnings (loss) per share
        of common stock - adjusted weighted-average
        shares outstanding............................      14,564        13,479        14,197         13,478
                                                           =======      ========       =======       ========

Basic earnings (loss) per share of common stock
   before cumulative effect of an accounting change...     $  0.70      $  (0.45)      $  1.10       $  (3.67)
Cumulative effect of an accounting change.............        0.00          0.00          0.00          (0.18)
                                                           -------      --------       -------       --------
Basic earnings (loss) per share of common stock.......     $  0.70      $  (0.45)      $  1.10       $  (3.85)
                                                           =======      ========       =======       ========

Diluted earnings (loss) per share of common stock
   before cumulative effect of an accounting change...     $  0.65      $  (0.45)      $  1.03       $  (3.67)
Cumulative effect of an accounting change.............        0.00          0.00          0.00          (0.18)
                                                           -------      --------       -------       --------
Diluted earnings (loss) per share of common stock.....     $  0.65      $  (0.45)      $  1.03       $  (3.85)
                                                           =======      ========       =======       ========
</TABLE>

5. COMPREHENSIVE INCOME
-----------------------

The Company has classified its entire investment portfolio as
available-for-sale. Unrealized gains (losses) at June 30, 2003 and December 31,
2002, except those determined to be other-than-temporary, are reflected as
accumulated other comprehensive income in the consolidated statement of equity
and consolidated balance sheets.

                                                                              11

<PAGE>

The components of comprehensive income (loss), net of related tax, for the
periods ended June 30, 2003 and 2002 are as follows:

<TABLE>
<CAPTION>
                                                                THREE MONTHS ENDED              SIX MONTHS ENDED
                                                                     JUNE 30,                       JUNE 30,
                                                             --------------------------    ---------------------------
                                                                 2003          2002            2003            2002
                                                             -----------    -----------    -----------     -----------
                                                                  (in thousands)                 (in thousands)
<S>                                                             <C>          <C>             <C>            <C>
Net income (loss) .......................................       $ 9,419      $ (6,120)       $14,659        $(51,486)

Other comprehensive income (loss):
  Unrealized holding appreciation arising during period
     (net of tax of $0)..................................         4,856        15,215          2,074           2,333

  Reclassification adjustment for (gains) losses realized
     in net income (loss) (net of tax of $0).............        (4,359)         (222)        (2,355)          1,281
                                                                -------      --------        -------        --------

Net unrealized appreciation (depreciation) arising during
     the period ended June 30 (net of tax of $0).........           497        14,993           (281)          3,614
                                                                -------      --------        -------        --------

Comprehensive income (loss)..............................       $ 9,916      $  8,873        $14,378        $(47,872)
                                                                =======      ========        =======        ========
</TABLE>

6. DEFERRED POLICY ACQUISITION COSTS
------------------------------------

The following represents the components of deferred policy acquisition costs and
the amounts that were charged to expense for the six months ended June 30, 2003
and 2002.

<TABLE>
<CAPTION>
                                                                              SIX MONTHS ENDED JUNE 30,
                                                                              --------------------------
                                                                                  2003          2002
                                                                              ------------   -----------
                                                                                    (in thousands)
<S>                                                                               <C>            <C>
Balance at beginning of period............................................       $ 1,016       $ 4,416
Cost deferred during the period...........................................             0         4,991
Amortization expense......................................................        (1,016)       (6,131)
                                                                                 -------       -------
Balance at end of period..................................................       $     0       $ 3,276
                                                                                 =======       =======
</TABLE>

7. RESTRUCTURING CHARGE
-----------------------

The first quarter of 2002 included a charge of approximately $2.6 million
composed primarily of severance and the write-off of remaining lease commitments
associated with the closure of the Company's offices in Dallas and Indianapolis,
and the decision to put MIIX and LP&C into runoff. As of June 30, 2003, the
remaining accrual for restructuring charges was $0.2 million. No similar event
occurred during the six months ended June 30, 2003.

                                                                              12

<PAGE>

8. INCOME TAXES
---------------

A reconciliation of income taxes computed based on the expected annual effective
federal statutory tax rate to total income tax expense (benefit) before the
cumulative effect of an accounting change for the periods ended June 30, 2003
and 2002 are as follows:

<TABLE>
<CAPTION>
                                                             SIX MONTHS ENDED JUNE 30,
                                       ----------------------------------------------------------------------
                                                     2003                                2002
                                       ----------------------------------  ----------------------------------
                                                          % OF INCOME                         % OF INCOME
                                                            BEFORE                               BEFORE
                                         INCOME TAXES     INCOME TAXES       INCOME TAXES     INCOME TAXES
                                       ---------------- -----------------  ---------------- -----------------
                                        (in thousands)                      (in thousands)
<S>                                        <C>                <C>              <C>                <C>
Expected annual effective federal
    income tax expense (benefit)
    at 35%...........................      $ 3,621            35.0 %           $(21,185)          (35.0)%
Increase (decrease) in taxes
    resulting from:
    Valuation allowance..............       (8,806)          (85.1)%             10,835            17.9 %
    Tax-exempt interest..............            0             0.0 %               (444)           (0.7)%
    Other............................          872             8.4 %               (622)           (1.0)%
                                           -------           -----             --------           -----
Total income tax benefit.............      $(4,313)          (41.7)%           $(11,416)          (18.8)%
                                           =======           =====             ========           =====

</TABLE>

The income tax benefit of $4.3 million for the six months ended June 30, 2003
resulted primarily from utilization of the Company's net operating loss
carryforward.

9.  RECENT ACCOUNTING PRONOUNCEMENTS
------------------------------------

In May 2003, FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity." The provisions
of this Statement are generally effective as of the first interim financial
reporting period beginning after June 15, 2003. Adoption of SFAS No. 150 is not
expected to have a material impact on the Company's financial condition or
results of operations.

10. RECLASSIFICATION
--------------------

Certain amounts have been reclassified for the prior years to be comparable to
the 2003 presentation.

ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
           RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the financial
statements and the related notes thereto appearing elsewhere in this Form 10-Q.

CRITICAL ACCOUNTING POLICIES

The Company's discussion and analysis of its financial condition and results of
operations are based upon the Company's consolidated financial statements, which
have been prepared in accordance with accounting principles generally accepted
in the United States. The preparation of these financial statements requires
management to make estimates and judgments that affect the reporting amounts of
assets, liabilities, revenues and expenses and related disclosures of contingent
assets and liabilities. On an on-going basis, management evaluates its
estimates, including those related to income taxes, loss and LAE reserves,
contingencies and litigation. The Company bases its estimates on historical
experience and on various other assumptions that are believed to be reasonable
under the circumstances, the results of which form the basis for making
judgments about the carrying values of assets and

                                                                              13

<PAGE>

liabilities that are not readily apparent from other sources. Actual results may
differ from these estimates under different assumptions or conditions.

The Company believes the following critical accounting policies affect its more
significant judgments and estimates used in the preparation of its consolidated
financial statements:

REINSURANCE. Reinsurance recoverables include the balances due from reinsurance
companies for paid and unpaid losses and LAE that will be recovered from
reinsurers, based on contracts in force. Amounts recoverable from reinsurers are
estimated in a manner consistent with the claim liability associated with the
reinsured policy. Reinsurance contracts do not relieve the Company from its
primary obligations to policyholders. Failure of reinsurers to honor their
obligations could result in losses to the Company. The Company evaluates the
financial condition of its reinsurers and monitors concentrations of credit risk
with respect to the individual reinsurers, which participate in its ceded
programs to minimize its exposure to significant losses from reinsurer
insolvencies. The Company holds collateral in the form of letters of credit or
trust accounts for amounts recoverable from reinsurers that are not designated
as authorized reinsurers by the domiciliary Departments of Insurance.

INCOME TAXES. The Company accounts for income taxes in accordance with SFAS No.
109, "Accounting for Income Taxes." Deferred tax assets and liabilities are
recognized for the future tax consequences attributable to temporary differences
between the financial statement carrying amounts of existing assets and
liabilities and their respective tax bases and operating loss and tax credit
carryforwards. Deferred tax assets and liabilities are measured using enacted
tax rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled. The effect on
deferred tax assets and liabilities of a change in tax rates is recognized in
income in the period that includes the enactment date. A valuation allowance
against deferred tax assets is recorded if it is more likely than not, that all
or some portion of the benefits related to the deferred tax assets will not be
realized. Valuation allowances are based on estimates of taxable income and the
period over which deferred tax assets will be recoverable. In the event that
actual results differ from these estimates or these estimates are adjusted in
future periods, the Company may need to establish a valuation allowance, which
would impact its financial position and results of operations. A valuation
allowance has been established for approximately the full value of the net
deferred tax assets at June 30, 2003 and December 31, 2002.

LOSS AND LOSS ADJUSTMENT EXPENSES. The Company estimates its liability for
losses and LAE using actuarial projections of ultimate losses and LAE and other
quantitative and qualitative analyses of conditions expected to affect the
future development of claims and related expenses. The estimated liability for
losses is based upon paid and case reserve estimates for losses reported,
adjusted through judgmental formulaic calculations to develop ultimate loss
expectations; related estimates of incurred but not reported losses and expected
cash reserve developments based on past experience and projected future trends;
deduction of amounts for reinsurance placed with reinsurers; and estimates
received related to assumed reinsurance. Amounts attributable to ceded
reinsurance derived in estimating the liability for loss and LAE are
reclassified as assets in the consolidated balance sheets as required by SFAS
No. 113. The liability for LAE is provided by estimating future expenses to be
incurred in settlement of claims provided for in the liability for losses and is
estimated using similar techniques.

The liabilities for losses and LAE and the related estimation methods are
continually reviewed and revised to reflect current conditions and trends. The
resulting adjustments are reflected in the operating results of the current
year. While management believes the liabilities for losses and LAE are adequate
to cover the ultimate liability, the actual ultimate loss costs may vary from
the amounts presently provided and such differences may be material.

INVESTMENTS. The Company has designated its entire investment portfolio as
available-for-sale. Temporary changes in fair values of available-for-sale
securities, after adjustment of deferred income taxes, are reported as
unrealized appreciation or depreciation directly in equity as a component of
other comprehensive income.

The Company regularly evaluates the carrying value of its investments based on
current economic conditions, past credit loss experience and other
circumstances. A decline in fair value that is other-than-temporary is
recognized by an adjustment to carrying value treated as a realized investment
loss and a reduction in the cost basis of the investment in the period when such
a determination is made.

                                                                              14

<PAGE>

RECENT DEVELOPMENTS

The Company has been subjected to a number of adverse developments as a result
of unexpected and unprecedented increases in loss and LAE reserves during fiscal
years 2002, 2001 and 2000 related to prior years' experience. These increases
have required the Company to increase its loss reserves in each of the last
three years. For a more detailed discussion of these events, see our Annual
Report on Form 10-K for 2002.

As a result of the net losses reported in 2001, two of the Company's operating
subsidiaries triggered RBC events requiring the filing of a corrective action
plan with each state of domicile. As a result, both companies, MIIX and LP&C,
entered solvent runoff. For a more detailed description of these events, see our
Annual Report on Form 10-K.

At December 31, 2002, MIIX's total adjusted capital was $18.7 million, which is
substantially below the Mandatory Control Level. MIIX requested approval from
the New Jersey Department to discount loss and LAE reserves and to merge LP&C
into MIIX. Similarly, LP&C requested approval from the Virginia Bureau to merge
LP&C into MIIX.

While the requests to merge remain pending with the regulators, the request to
discount MIIX's loss and LAE reserves on a statutory basis as of December 31,
2002 was approved by the New Jersey Department. The permissible discount rate
was three (3) percent. MIIX's RBC level will not be impacted by the ability to
discount loss and LAE reserves, as the NAIC standards do not permit discounting
of loss and LAE reserves to be taken into account in the calculation of RBC.
Discounting of reserves will facilitate the New Jersey Department's ability to
assess the continued viability of MIIX on a basis that recognizes the long
payout period of claims and estimated future investment income on a comparable
economic basis. The discounting of MIIX's reserves resulted in an increase to
MIIX's statutory surplus, bringing total surplus to $72.3 million as of December
31, 2002.

On February 19, 2003, MIIX agreed to certain operating limitations with the New
Jersey Department. The limitations include a requirement for approval by the New
Jersey Department prior to MIIX incurring new debt, paying dividends or
investing in below investment grade assets.

On May 1, 2003, MIIX entered into an Order with the New Jersey Department that
sets forth the framework for the regulatory monitoring of MIIX and contains
similar requirements placed on other carriers in runoff. The Order is consistent
with the February 19, 2003 letter agreement of the parties whereby MIIX agreed
to certain limitations on operations. The limitations, among other things,
require the approval of the New Jersey Department prior to payment of dividends
by the Company's insurance subsidiary, and for lending arrangements, investments
and inter-company arrangements outside of the normal course of business, and
requires MIIX to periodically provide information relating to its operations and
finances to the New Jersey Department. See "Risks and Uncertainties."

The trading of the Company's common stock was suspended at the opening of
business on April 28, 2003. The NYSE had determined that the Company's market
capitalization and stockholders' equity were below NYSE listing thresholds. The
Company was considered "below criteria" as its total capitalization was less
than $50 million over a 30-day trading period and stockholders' equity was less
than $50 million. The Company's common stock has commenced trading on the OTC
Bulletin Board. See "Risks and Uncertainties."

RESULTS OF OPERATIONS

THREE MONTHS ENDED JUNE 30, 2003 COMPARED TO THE THREE MONTHS ENDED JUNE 30,
2002

NET PREMIUMS EARNED. Net premiums earned were $7.3 million for the three months
ended June 30, 2003, a decrease of approximately $41.8 million, or 85.2%, from
$49.1 million for the three months ended June 30, 2002. This net decrease
consists of a decrease in direct premiums earned of $45.3 million, partially
offset by a decrease in ceded premiums earned of $3.5 million. The decrease in
direct premiums earned reflects the Company's cessation of writing or renewing
policies during 2002. The reduction in ceded premiums earned resulted from
reduced direct earned premiums during the period as well as additional ceded
earned premiums of $13.1 million in the first quarter of 2002 associated with
changes in estimates made to ceded loss and LAE reserves at that time.

                                                                              15

<PAGE>

Total premiums written were $0.2 million for the three months ended June 30,
2003, a decrease of $6.3 million, or 96.7%, from total premiums written of $6.5
million for the three months ended June 30, 2002. The decrease in total premiums
written primarily reflects the Company's cessation of writing or renewing
policies during the second quarter of 2002. Activity in the second quarter of
2003 included New Jersey policy cancellations of $0.4 million, offset by tail
coverage premiums written in other states of $0.5 million and other net premiums
written of $0.1 million.

NET INVESTMENT INCOME. Net investment income decreased approximately $7.3
million, or 44.8%, to $8.9 million for the three months ended June 30, 2003 from
$16.2 million for the same period in 2002. Average invested assets at amortized
cost decreased to approximately $928.3 million for the three months ended June
30, 2003, compared to approximately $1.19 billion for the same period last year.
The decrease in net investment income reflects the impact of declining market
yields coupled with a decline in the invested asset base, as well as an increase
in average short-term investments held during the second quarter of 2003.

The average annualized pre-tax yield on the investment portfolio decreased to
4.04% for the three months ended June 30, 2003 from 5.43% for the same period in
2002. The decrease is primarily due to the reasons set forth above.

REALIZED INVESTMENT GAINS (LOSSES). Net realized investment gains increased
approximately $4.2 million, or 1,863.5%, to $4.4 million for the three months
ended June 30, 2003, compared to $0.2 million for the same period in 2002.
During the quarter ended June 30, 2003, the Company recorded realized gains of
approximately $6.0 million primarily due to sales of fixed maturity investments
as a result of modifications to the investment portfolio. During the same
period, the Company recognized approximately $1.6 million of realized losses.
The realized losses included $1.3 million related to other-than-temporary
declines in investment values associated with Conseco/Green Tree Financial
corporate bonds. In the second quarter of 2002, realized gains of approximately
$3.1 million were recognized due to sales of fixed maturity investments and
realized losses included $2.9 million of other-than-temporary declines in
investment values, primarily attributable to collateralized bond obligations.

OTHER REVENUE. Other revenue was $1.5 million for the three months ended June
30, 2003 and 2002. Other revenue for the second quarter of 2003 consisted
primarily of $0.6 million associated with management services and related
contracts with MIIX Advantage and $0.7 million in renewal rights revenue.

LOSS AND LOSS ADJUSTMENT EXPENSE (LAE). The provision for losses and LAE
decreased $49.9 million, or 91.6%, to $4.6 million for the three months ended
June 30, 2003 from $54.5 million for the three months ended June 30, 2002. The
provision for losses and LAE is net of ceded losses and LAE of $0.3 million and
$3.2 million for the three months ended June 30, 2003 and 2002, respectively.
The decrease in net loss and LAE for the three months ended June 30, 2003 was
composed of decreases in direct and ceded losses and LAE incurred of $52.9
million and $3.0 million, respectively. The net decrease largely resulted from
the reduction in net earned premium in the second quarter of 2003 compared to
2002.

UNDERWRITING EXPENSES. Underwriting expenses decreased $5.9 million, or 56.0%,
to $4.7 million for the three months ended June 30, 2003 from $10.6 million for
the three months ended June 30, 2002. The net decrease for the quarter ended
June 30, 2003 primarily results from the effects of discontinued insurance
operations, with reduced commissions, premium taxes and reductions in
compensation and benefit costs related to the restructuring and downsizing
actions which began in the first quarter of 2002. The ratio of underwriting
expenses to net premiums earned was 64.3% for the three months ended June 30,
2003, compared to 21.6% for the same period in 2002. The increase in 2003
reflects decreased earned premium in 2003 due to the Company's cessation of
writing or renewing policies during 2002.

FUNDS HELD CHARGES. Funds held charges related to the Company's aggregate
reinsurance contracts decreased $2.0 million, or 26.4%, to $5.5 million for the
three months ended June 30, 2003 from $7.5 million for the three months ended
June 30, 2002. The decrease in funds held charges was due to a decrease of $78.6
million in the funds held liability from June 30, 2002. The funds held liability
decrease was due to the commutation of the 1993 and 1994 aggregate reinsurance
treaties and ceded paid losses applied to the other treaty years.

                                                                              16

<PAGE>

Funds held charges are calculated based upon the beginning of quarter funds held
balances and are adjusted based upon changes to ceded premiums associated with
changes in ceded losses.

OTHER EXPENSES. Other expenses decreased $0.2 million, or 43.7%, to $0.2 million
for the three months ended June 30, 2003 from $0.4 million for the three months
ended June 30, 2002. This net decrease results primarily from the sale of
substantially all of the net assets of the Company's leasing operations,
effective April 30, 2002.

INCOME TAX PROVISION (BENEFIT). Income taxes decreased approximately $2.4
million to a tax benefit of $2.4 for the three months ended June 30, 2003,
resulting in a (34.7)% effective tax rate, compared to an income tax provision
of $5,000 and an effective tax rate of 0% for the same period in 2002. The
income tax benefit of $2.4 million in the second quarter of 2003 primarily
reflects the utilization of the Company's net operating loss carryforward.

NET INCOME (LOSS). Net income was $9.4 million for the three months ended June
30, 2003, an increase of $15.5 million, or 253.9%, from a net loss of $6.1
million for the three months ended June 30, 2002 for the reasons discussed
above.

SIX MONTHS ENDED JUNE 30, 2003 COMPARED TO THE SIX MONTHS ENDED JUNE 30, 2002

NET PREMIUMS EARNED. Net premiums earned were $27.1 million for the six months
ended June 30, 2003, a decrease of approximately $59.1 million, or 68.5%, from
$86.2 million for the six months ended June 30, 2002. This net decrease consists
of a decrease in direct premiums earned of $84.4 million, partially offset by a
decrease in ceded premiums earned of $25.3 million. The decrease in direct
premiums earned reflects the Company's cessation of writing or renewing policies
during 2002. The reduction in ceded premiums earned resulted from reduced direct
earned premiums during the period as well as additional ceded earned premiums of
$13.1 million in the first quarter of 2002 associated with adjustments made to
ceded loss and LAE reserves at that time.

Total premiums written were negative $0.9 million for the six months ended June
30, 2003, a decrease of $102.9 million, or 100.9%, from total premiums written
of $102.0 million for the six months ended June 30, 2002. The decrease in total
premiums written primarily reflects the Company's cessation of writing or
renewing policies during the second quarter of 2002. Activity for the six months
ended June 30, 2003 included New Jersey policy cancellations of $4.9 million,
somewhat offset by tail coverage premiums written in other states of $3.7
million and other net premiums written of $0.3 million.

NET INVESTMENT INCOME. Net investment income decreased approximately $14.5
million, or 42.3%, to $19.9 million for the six months ended June 30, 2003, from
$34.4 million for the same period in 2002. Average invested assets at amortized
cost decreased to approximately $959.1 million for the six months ended June 30,
2003, compared to approximately $1.21 billion for the same period in 2002. The
decrease in net investment income reflects the combined effects of a decline in
market yields, a decline in the total invested asset base and an increase in
average short-term investments held during the first half of 2003 compared to
the same period in 2002.

The average annualized pre-tax yield on the investment portfolio decreased to
4.04% for the six months ended June 30, 2003, from 5.71% for the same period in
2002. The decrease is primarily due to the reasons set forth above.

REALIZED INVESTMENT GAINS (LOSSES). Net realized investment gains (losses)
increased approximately $3.7 million, or 283.8%, to a gain of $2.4 million for
the six months ended June 30, 2003, compared to a net realized investment loss
of $1.3 million for the same period in 2002. During the six months ended June
30, 2003, the Company recorded realized gains of approximately $12.2 million,
primarily due to sales of fixed-maturity investments as a result of
modifications to the investment portfolio. During the same period, the Company
recognized approximately $9.8 million of realized losses. The realized losses
included $8.7 million related to other-than-temporary declines in investment
values, of which $7.7 million was associated with Conseco/Green Tree Financial
corporate bonds and $1.0 million was attributable to collateralized bond
obligations. In the second quarter of 2002, realized gains of approximately $4.9
million were recognized due to sales of fixed-maturity investments, offset by
$6.2 million of realized losses related to other-than-temporary declines in
investment values attributable to collateralized bond obligations.

                                                                              17

<PAGE>

OTHER REVENUE. Other revenue decreased approximately $1.2 million, or 27.0%, to
$3.1 million for the six months ended June 30, 2003, from $4.3 million for the
same period last year. This net decrease is primarily composed of a decrease of
approximately $1.4 million due to the sale of substantially all of the assets of
the Company's leasing subsidiary, Hamilton National Leasing Corporation
("Hamilton"), effective April 30, 2002, a decrease in finance charge income of
approximately $2.0 million resulting from the Company's premium financing
program and increases of $1.3 million associated with management services and
related contracts with MIIX Advantage and $1.4 million in renewal rights
revenue.

LOSS AND LOSS ADJUSTMENT EXPENSES (LAE). The provision for losses and LAE
decreased $114.7 million, or 84.2%, to $21.6 million for the six months ended
June 30, 2003, from $136.3 million for the six months ended June 30, 2002. The
provision for losses and LAE is net of ceded losses and LAE of ($11.4) million
and $32.8 million for the six months ended June 30, 2003 and 2002, respectively.
The decrease in net loss and LAE for the six months ended June 30, 2003 was
composed of decreases in direct, assumed and ceded losses and LAE incurred of
$154.3 million, $4.6 million and $44.2 million, respectively, compared to the
same period of 2002. The ratio of net losses and LAE to net premiums earned
decreased to 79.5% for the six months ended June 30, 2003 from 158.1% for the
same period in 2002.

UNDERWRITING EXPENSES. Underwriting expenses decreased $11.0 million, or 51.2%,
to $10.4 million for the six months ended June 30, 2003, from $21.4 million for
the six months ended June 30, 2002. The net decrease for the first six months of
2003 primarily resulted from the effects of discontinued insurance operations,
with reduced commissions, premium taxes and reductions in compensation and
benefit costs related to the restructuring and downsizing actions which began in
the first quarter of 2002. The ratio of underwriting expenses to net premiums
earned was 38.4% and 24.8% for the six months ended June 30, 2003 and 2002,
respectively. The increased expense ratio in 2003 reflects the Company's
cessation of writing or renewing policies during 2002.

FUNDS HELD CHARGES. Funds held charges decreased $12.6 million, or 56.6%, to
$9.7 million for the six months ended June 30, 2003, from $22.3 million for the
six months ended June 30, 2002. The decrease primarily relates to adjustments to
ceded loss and LAE reserves recorded in the first quarter of 2002 that resulted
in additional ceded premiums earned and produced $8.3 million of additional
funds held charges in that quarter. In addition, the funds held liability
decreased by $78.6 million from June 30, 2002, due to the commutation of the
1993 and 1994 aggregate reinsurance treaties, along with ceded paid loss amounts
applied to the other treaty years.

OTHER EXPENSES. Other expenses decreased $1.2 million, or 71.9%, to $0.5 million
for the six months ended June 30, 2003, from $1.7 million for the same period in
2002. The net decrease is primarily due to the sale of substantially all of the
assets of Hamilton, the Company's leasing subsidiary, effective April 30, 2002.

RESTRUCTURING CHARGE. The Company announced, in March, 2002, its intention to
place all operations of LP&C into runoff and recorded a restructuring charge of
$2.6 million during the first quarter of 2002 relating to the reduction of
regional and home office staff and the closing of regional offices in Dallas and
Indianapolis. No similar event occurred in the six months ended June 30, 2003.

INCOME TAX PROVISION (BENEFIT). Income taxes increased approximately $7.1
million to a tax benefit of $4.3 million for the six months ended June 30, 2003,
resulting in an effective tax rate of (41.7)%, compared to a tax benefit of
$11.4 million, and an effective tax rate of (18.8)% for the same period in 2002.
The income tax benefit of $4.3 million for the first six months of 2003 reflects
the utilization of the Company's net operating loss carryforward.

CUMULATIVE EFFECT OF AN ACCOUNTING CHANGE, NET OF TAX. On January 1, 2002, the
Company adopted SFAS No. 142, "Goodwill and Other Intangible Assets," which
requires that goodwill no longer be amortized as an expense, but instead
reviewed and tested for impairment under a fair value approach. The cumulative
effect of adopting SFAS No. 142 was a charge of $2.4 million on January 1, 2002.

NET INCOME (LOSS). Net income was $14.7 million for the six months ended June
30, 2003, an increase of $66.2 million from a net loss of $51.5 million for the
six months ended June 30, 2002 for the reasons discussed above.

                                                                              18

<PAGE>

FINANCIAL CONDITION

CASH AND INVESTED ASSETS. Aggregate invested assets at fair value, including
cash and short-term investments, were $912.3 million at June 30, 2003 and
$1,061.0 million at December 31, 2002. The net decrease of $148.7 million
largely resulted from the sale of fixed-maturity investments to meet
accelerating claims settlements.

Fixed-maturity investments available for sale at fair value, including
short-term investments, were $898.2 million, or 99.6% of the investment
portfolio of the Company as of June 30, 2003. At that date, the average credit
quality of the fixed income portfolio was "AA," as defined by independent rating
agencies, while the portfolio effective duration was 2.64 years.

UNPAID LOSSES AND LAE, REINSURANCE RECOVERABLE ON UNPAID LOSSES AND LAE AND
FUNDS HELD UNDER REINSURANCE TREATIES. Gross unpaid losses and LAE were $1,010.7
million at June 30, 2003 and $1,151.6 million at December 31, 2002. The net
decrease in unpaid losses and LAE reserves was primarily attributable to claims
paid activity. Reinsurance recoverable on unpaid losses and LAE was $378.0
million at June 30, 2003 and $457.0 million at December 31, 2002. The net
decrease in reinsurance recoverable is primarily attributable to increases in
ceded loss and LAE collection from reinsurers and a decrease in ceded loss and
LAE reserves. Substantially all of the reinsurance recoverables at June 30, 2003
are collateralized by the funds held under reinsurance treaties and letters of
credit.

STOCKHOLDERS' EQUITY. Total stockholders' equity was $55.5 million at June 30,
2003 and $41.3 million at December 31, 2002. The net increase of $14.2 million
consisted of net income of $14.7 million, a change in unrealized net
depreciation of investments of $0.3 million and $0.2 million resulting from
treasury stock activity associated with net stock purchase and loan and unearned
stock compensation.

LIQUIDITY AND CAPITAL RESOURCES

The MIIX Group is a holding company whose assets primarily consist of all of the
capital stock of its subsidiaries. Its principal sources of funds are dividends
and other permissible payments from its subsidiaries and revenues from
non-insurance operations. MIIX is restricted by state regulation as to any
dividends it can declare without the consent of the New Jersey Department in
accordance with the letter agreement of February 19, 2003 and the Order of May
1, 2003. The Company's other insurance subsidiaries are subject to similar
provisions and restrictions. Both The MIIX Group and the Company's non-insurance
subsidiary are also restricted from paying dividends until all amounts owed to
the insurance subsidiary are paid. No significant amounts are currently
available for payment of dividends by the Company's other insurance subsidiaries
without prior approval of the applicable insurance department. During the first
quarter of 2002, the New Jersey Department approved a $2.1 million dividend
payment from MIIX to The MIIX Group. However, The MIIX Group does not expect
that MIIX will have the ability to declare and pay dividends to The MIIX Group
to meet its operating needs, except to the extent that the New Jersey Department
specifically approves dividend payments in the future. However, the agreement of
February 19, 2003 and the Order of May 1, 2003 do permit the subsidiaries to
remit funds to the holding company to facilitate payment of the holding
company's routine operating expenses.

On May 3, 2002 and on May 10, 2002, the Company's business plan, which provides
for MIIX and LP&C to be placed in solvent runoff, was approved by the New Jersey
Department and the Virginia Bureau, respectively. MIIX and LP&C ceased writing
business in all states in accordance with each state's specific withdrawal
requirements. As a result, the Company expects that cash flow from operations in
the future will continue to be negative, as payments of outstanding claims and
expenses exceed revenues, primarily that are attributable to investment income.
The Company also withdrew MIIX and LP&C from the interactive rating process with
A.M. Best. At the time of the withdrawal, the companies were rated C+. The
Company received approval from the New Jersey Department for the formation and
capitalization of a 100% physician-owned insurance company, MIIX Advantage, that
focuses on insuring New Jersey physicians. MIIX Advantage began writing
insurance policies on September 1, 2002. The Company entered into a management
contract and other financial arrangements with the new company. The revenues
from these agreements and investment income will be the Company's only source of
revenues in the foreseeable future as it seeks to grow its related consulting
business by providing similar services to self-funded entities and other health
care provider owned insurers.

                                                                              19

<PAGE>

The primary sources of the Company's liquidity are net investment income,
proceeds from the maturity or sale of invested assets, recoveries from
reinsurance and revenues from non-insurance operations. Funds are used to pay
losses and LAE, operating expenses, reinsurance premiums and taxes. The
Company's net cash flow used by operating activities were approximately $133.2
million and $39.2 million for the six months ended June 30, 2003 and 2002,
respectively, and $180.6 million for the year ended 2002. The decrease in cash
flow during this period was primarily the result of increased loss payments,
reflecting both the maturation of the Company's expansion book of business,
acceleration of claims settlements in New Jersey and Pennsylvania, the
settlement of a few higher severity cases, lower investment income and a
decrease in premium collection reflecting the decrease in written premium.
Because of the inherent unpredictability related to the timing of the payment of
claims, it is not unusual for cash flow from operations for a medical
malpractice insurance company to vary, perhaps substantially, from year to year.
Because the Company ceased writing insurance policies, cash flow is expected to
decrease substantially. See "Risks and Uncertainties." As noted elsewhere in
this Report, the sufficiency of the Company's cash flows to sustain its
operations is dependent on a number of uncertain factors; investment income and
claims experience are among the most important of these factors.

The Company's investments consist primarily of fixed-maturity securities. The
Company's current investment strategy seeks to maximize after-tax income through
a high quality, diversified, duration-sensitive, taxable bond portfolio, while
maintaining an adequate level of liquidity. The Company plans to continue this
strategy. At June 30, 2003, the portfolio has an average credit quality of "AA,"
an average duration of 2.64 years and an annualized yield of 4.04%.

The Company held collateral of $266.2 million and $332.7 million at June 30,
2003 and December 31, 2002, respectively, in the form of funds held and $159.5
million at June 30, 2003 and December 31, 2002 in the form of letters of credit,
for recoverable amounts on ceded unpaid losses and LAE under certain reinsurance
contracts. Under the contracts, and as a result of the downgrade of the
Company's A.M. Best rating to below B+ during the first quarter of 2002,
reinsurers requested that assets supporting the funds withheld account be placed
in trust. The Company has established the required trust accounts in accordance
with contract provisions. Under the terms of the reinsurance contracts, the
funds held are credited with interest at contractual rates ranging from 6.0% to
8.6%, which is recorded as an expense in the period incurred.

During 2002, The MIIX Group Board of Directors suspended the payments of
dividends to shareholders. Future payments and amounts of cash dividends will
depend upon, among other factors, the Company's operating results, overall
financial condition, capital requirements, ability to receive dividends from its
insurance company subsidiaries, which are subject to regulatory approval and
general business conditions. Payment of dividends is also subject to approval by
the Board of Directors. The Company does not expect to pay dividends for the
foreseeable future.

During the six month period ended June 30, 2003, 1,190,982 restricted shares of
The MIIX Group common stock were granted, having a per share market value of
$1.29. During the six months ended June 30, 2003, 24,306 options were cancelled
and 0 options were exercised. During the six months ended June 30, 2003, a
former officer tendered 8,922 shares of The MIIX Group common stock and reduced
the stock purchase and loan balance to $0. All transactions were recorded at the
fair value of The MIIX Group common stock on the effective dates of the
transactions.

RISKS AND UNCERTAINTIES

As a result of the events described above under the caption "Recent
Developments," the Company is subject to a number of risks and uncertainties.
Some of the most obvious are the following:

RISK OF INCREASED SUPERVISION. The Company recorded an adjustment of $20.5
million to net loss and LAE reserves at December 31, 2002. While the Company's
reserves were not adjusted in the first or second quarters of 2003, the effect
of the December 31, 2002 reserve adjustment was to further erode MIIX's total
adjusted capital to $18.7 million, which is substantially below the Mandatory
Control Level specified in the New Jersey statutes. At the Mandatory Control
Level, the Insurance Commissioner of the New Jersey Department is authorized to
place MIIX in

                                                                              20

<PAGE>

supervision, rehabilitation or liquidation, which could cause the Commissioner
to require payment of any monies owed to MIIX by its affiliates and, depending
on the circumstances of the affiliate at the time, could possibly result in the
insolvency of an affiliate. The New Jersey Department has already established
limitations on the operations of MIIX in a letter agreement of February 19,
2003, as well as in an Order of May 1, 2003. The Department has not yet
indicated what, if any, additional regulatory action may be taken. If additional
regulatory action is taken, it could have a material adverse effect on the
Company.

RISKS IN CLAIMS EXPERIENCE. The Company currently anticipates that its assets
will be sufficient to discharge its liabilities. While this anticipation is
based upon actuarial projections, loss and LAE reserves are estimates of future
events whose outcomes are unknown at the current time. The inherent uncertainty
associated with estimating loss and LAE reserves may lead to actual results that
differ, perhaps materially, from our projections. Should the Company experience
worse than anticipated losses, it is highly likely that MIIX would be subjected
to additional regulatory action, including possibly rehabilitation or
liquidation. The Company continues to see some acceleration of claims in
connection with the runoff of MIIX. Should this acceleration become substantial,
even favorable settlements could result in short-term negative adjustments to
the Company's loss and LAE reserves, which would further increase the risk of
additional regulatory action. The Company has also seen significant recent
increases in the severity of claims, particularly in its New Jersey book of
business. Even a single, sizeable adverse judgment could materially and
adversely affect the Company.

LIMITED INCOME FROM OPERATIONS. MIIX ceased writing insurance on September 1,
2002, except where required by law. Because of the resultant decrease in premium
income, the Company's revenues will be limited. While the Company intends to
seek management contracts with other insurance entities and/or to establish
itself as a third-party administrator of professional liability contracts, no
assurances can be given that it will be able to do so. In consequence, the
Company's revenues will be largely limited to investment income and income from
various contractual arrangements with MIIX Advantage. No assurances can be given
that these revenues will be adequate to support the Company's operations or to
permit it to avoid additional regulatory action.

INVESTMENT RISK. A significant portion of the Company's assets are invested in
fixed-maturity investments. The Company manages its portfolio through two
independent investment advisors and has a relationship with an investment
consulting firm. The Company is exposed to all of the risks of the capital
markets, which have been substantial in recent periods because of the general
deterioration of those markets as well as increasing volatility in particular
sectors. In response to these developments, the Company has modified its
investment portfolio to reduce the level of risk to which it is exposed. In the
process of this modification, the Company may liquidate securities, sometimes at
a loss. Additionally, in past quarters the Company has had to record investment
write-downs on certain corporate and structured investments. While the Company
continues to monitor these investments, there is a risk additional losses may be
incurred. Furthermore, the movement of the Company's investments from
instruments believed to be more risky to those believed to be less risky may
result in a reduction of the Company's return on investments, and because of the
acceleration of claims and increasing claims severity, the Company is retaining
an increasing percentage of its investment portfolio in short-term securities,
which are generally yielding less than longer maturities. Even if the Company is
able to manage its claims portfolio successfully, deterioration in the Company's
investment portfolio or losses incurred in liquidating the portfolio not offset
by gains, could result in the Company being subjected to additional regulatory
action.

LACK OF MARKET LIQUIDITY. Following delisting from the NYSE, the Company's stock
began to trade on the OTC Bulletin Board and in the "pink sheets" maintained by
the National Quotation Bureau, Inc. These markets are generally considered to be
less efficient and not as liquid as the NYSE. Trading in these markets will
likely decrease the liquidity of the Company's common stock, which could reduce
the trading price and increase the transaction costs of trading shares of the
Company's common stock.

LACK OF CASH FLOW AND LIQUIDITY. The Company's cash flow has declined
significantly over the past two years as a result of increased losses and loss
of premium revenue. The Company expects that its cash flow will continue to
decline substantially. In addition, given that MIIX's RBC is substantially below
the Mandatory Control Level, the New Jersey Insurance Commissioner could take
further regulatory action that would have the effect of reducing the Company's
cash flow. The Company currently does not have any sources of liquidity other
than the revenues from MIIX Advantage, net investment income, proceeds from the
sales of securities and reinsurance recoverables. It does

                                                                              21

<PAGE>

not maintain any credit facilities and it is unlikely that it could access the
capital markets in the foreseeable future. Any further significant reduction in
the Company's cash flow would have a material adverse effect on the Company's
financial condition, and could result in bankruptcy or insolvency of the
Company.

SIGNIFICANT LITIGATION. The Company is subject to litigation that could have a
material adverse effect on its financial condition.

POTENTIAL IMPACT OF REINSURANCE. The Company has entered into a number of
aggregate reinsurance contracts. The contracts in effect provide reinsurance for
policies written during 1995 through September 1, 2002 and contain certain
provisions related to funds held balances or surplus level that obligate the
Company to accept additional reinsurance coverage if the stipulated levels are
not maintained. Continued operating losses could result in the Company falling
below the stipulated levels and require the Company to accept additional
reinsurance coverage. Additional loss and loss reserve adjustments could exceed
maximum losses that can be ceded under the terms of the contract in a particular
calendar year. The Company would be liable for the full amount of losses and
ALAE above the maximum covered by the aggregate reinsurance contracts.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk represents the potential for loss due to adverse changes in the fair
value of financial instruments. The market risk associated with the financial
instruments of the Company relates to the investment portfolio, which exposes
the Company to risks related to unforeseen changes in interest rates, credit
quality, prepayments and valuations. Analytical tools and monitoring systems are
in place to continually assess and react to each of these elements of market
risk.

Interest rate risk is considered by management to be the most significant market
risk element currently facing the Company. Interest rate risk is the price
sensitivity of a fixed-maturity security to changes in interest rates. The
Company views these potential changes in price within the overall context of
asset and liability management. To reduce the Company's interest rate risk,
duration targets are set for the fixed income portfolio after consideration of
the duration of associated liabilities, primarily losses and LAE reserves, and
other factors.

The Company's investment portfolio at June 30, 2003 is primarily composed of
fixed-maturity securities, consisting of 75.5% of total investments at market
value. U.S. government and tax-exempt bonds represent 16.5%, corporate bonds
represent 26.1% and mortgage-backed and asset-backed securities represent 32.9%
of fixed-maturity investments. Short-term investments represent 24.1% of total
investments at market value and equity investments, primarily common stock,
accounts for the remaining 0.4%.

At June 30, 2003, the Company had net after-tax unrealized gains on its
fixed-maturity investment portfolio of $17.1 million. The net after-tax
unrealized gains of $17.1 million on the fixed-maturity portfolio represented
44.8% of total stockholders' equity gross of net after-tax unrealized gains on
investments. At December 31, 2002, the Company had net after-tax unrealized
gains on its fixed-maturity investment portfolio of $17.3 million.

Asset and liability matching is an important part of the Company's portfolio
management process. The Company utilizes financial modeling and scenario
analysis to closely monitor the effective modified duration of both assets and
liabilities in order to minimize any mismatching. The goal of effective asset
liability management is to allow payment of claims and operating expenses from
operating funds without disrupting the Company's long-term investment strategy.

In addition to interest rate risk, fixed-maturity securities like those
comprising the Company's investment portfolio involve other risks such as
default or credit risk. The Company manages this risk by limiting the amount of
higher risk obligations (determined by credit rating assigned by private rating
agencies) in which it invests.

Mortgage-backed and asset-backed securities involve similar risks associated
with fixed-maturity investments: interest rate risk, reinvestment rate risk and
default or credit risk. In addition, mortgage-backed and asset-backed securities
also possess prepayment risk, which is the risk that a security's originally
scheduled interest and principal payments will differ considerably due to
changes in the level of interest rates. The Company has directed its

                                                                              22

<PAGE>

investment advisors to purchase mortgage-backed and asset-backed securities
structured to enhance credit quality and/or provide prepayment stability.

Short-term investments are composed of highly rated money market instruments,
which are subject to an element of interest rate risk, although to a lesser
extent than those instruments discussed above due to a shorter maturity.

The Company also holds a number of equity investments. The value of the common
stock investments is dependent upon general conditions in the securities markets
and the business and financial performance of the individual companies in the
equity portfolio.

There have been no material changes to the Company's financial market risks
since December 31, 2002.

ITEM 4.  CONTROLS AND PROCEDURES

Within 90 days prior to the date of this report, and with the participation of
management, The MIIX Group's Chief Executive Officer and Chief Financial Officer
carried out an evaluation of the effectiveness of the design and operation of
The MIIX Group's disclosure controls and procedures.

Based upon that evaluation, the Chief Executive Officer and Chief Financial
Officer have concluded that The MIIX Group's disclosure controls and procedures
are effective.

There were no significant changes in The MIIX Group's internal controls or in
other factors that could significantly affect these controls subsequent to the
date of the evaluation.

PART II  OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

DEATH BENEFIT PLAN. In October 1999, a former Underwriters Board member filed an
action in the Superior Court of New Jersey against the Medical Inter-Insurance
Exchange of New Jersey (the "Exchange"), Underwriters, The MIIX Group and Daniel
Goldberg, former CEO of the Company, seeking damages arising out of the
unanimous decision of the Exchange and Underwriters Boards in July 1998 to
terminate a Death Benefit Plan that was adopted in December 1991 to provide
members of the Boards and their committees with a $1 million death benefit. In
October 2001, the court determined that judgment should be entered in favor of
plaintiff in the amount of $490,585, representing the cash balance of the life
insurance policy insuring plaintiff's life, which was held by the Exchange to
secure the payment of benefits under the Death Benefit Plan. The judgment
provides that this sum is payable in ten equal annual installments following
plaintiff's death, in accordance with the Plan's terms. The Company appealed
this decision. By Order dated March 18, 2003, the Superior Court of New Jersey,
Appellate Division, ruled on the SLOBODIEN V. MEDICAL INTER-INSURANCE EXCHANGE
case. The court overturned the Law Division ruling and held that, under the
terms of the agreement, the Death Benefit Plan could be terminated by the Board
of Directors at any time, and that plaintiff had no right to the cash value of
the insurance policy. The court, therefore, reversed and remanded the matter to
the lower court for entry of judgment in favor of the defendants. Plaintiff has
filed a petition for certification to the Supreme Court of New Jersey to review
the Appellate Division decision. On July 1, 2003, the Supreme Court denied the
Petition for Certification.

Two subsequent actions by other Plan participants, one styled as a class action
on behalf of all Plan participants, were filed in the Superior Court of New
Jersey against the Company on November 7, 2000 and December 11, 2001. These
actions were stayed pending the outcome of the appeal in the first action.
Pursuant to the terms of those orders, upon the Supreme Court's denial of the
Petition for Certification in the Slobodien Action, those cases were dismissed
with prejudice.

                                                                              23
<PAGE>

GLASSER V. THE MIIX GROUP, INC., ET AL. On February 5, 2003, a shareholder of
the Company instituted a putative class action in the United States District
Court for the District of New Jersey against the Company, its directors and
officers, Medical Society of New Jersey and Fox-Pitt Kelton, Inc., which acted
as financial advisor to the Company. The complaint alleges that the Company and
its directors and officers engaged in securities fraud, breaches of fiduciary
duty and violations of New Jersey antitrust laws in connection with the MIIX
Advantage contracts and alleged misrepresentations and omissions of material
fact in various SEC filings by the Company. The complaint demands unspecified
compensatory damages, treble damages, rescission of the sale of shares in the
Company's initial public offering, attorney fees and other relief. On May 13,
2003, another shareholder of the Company instituted a separate putative class
action in the United States District Court for the District of New Jersey
(Wasserstrum v. The MIIX Group, Inc., et al.) against the Company and certain of
its officers alleging securities fraud. The law firms representing plaintiffs in
two actions agreed to consolidate the claims against the Company. In furtherance
of this agreement, plaintiffs' counsel entered into a Stipulation and Order
providing that a consolidated amended complaint would be filed after entry of
the Stipulation and Order by the court. The Company intends to vigorously defend
the consolidated action.

The outcome of the Glasser and/or Wasserstrum suits could have a material
adverse effect on the Company's financial condition and results of operations.

FOX-PITT KELTON V. THE MIIX GROUP, INC. On February 10, 2003, Fox-Pitt Kelton
("FPK"), which had been engaged as financial advisor to the Company, instituted
suit against the Company in the Supreme Court of New York to recover fees
allegedly due from the Company as a result of the investment banking services it
rendered in connection with the Company's efforts to dispose of assets or obtain
capital and the agreements entered into between the Company and MIIX Advantage.
FPK has filed a motion for summary judgment in its favor which is now pending
before the court.

The Company and external counsel believe the Company has valid defenses to FPK's
claims. The Company intends to vigorously defend the action.

WEISFELD V. THE MIIX GROUP, INC., ET AL. On November 20, 2002, a former
executive of the Medical Society of New Jersey (MSNJ) filed suit in Superior
Court of New Jersey against MSNJ and certain of its officers, including MSNJ
officers who were also MIIX Group board members, alleging wrongful discharge and
defamation. The plaintiff seeks reinstatement, back pay and other damages. On
March 19, 2003, plaintiff filed pleadings amending the Complaint to include The
MIIX Group as a defendant, alleging that The MIIX Group tortiously interfered
with his employment relationship and that its alleged influence over MSNJ was a
causative factor in his discharge. Motion to dismiss plaintiffs' amended
complaint have been filed and are pending before the court. The Company and
external counsel believe plaintiff's claims lack merit and the Company intends
to vigorously defend the action.

The Company may be a party to litigation from time to time in the ordinary
course of business.


                                                                              24

<PAGE>

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

The MIIX Group's Annual Meeting of stockholders was held on May 8, 2003, at
which time the following directors were elected by the stockholders of The MIIX
Group to serve as the class of directors for a term expiring at the Annual
Meeting of stockholders to be held in 2006: Harry M. Carnes, M.D., Dominick
D'Agosta, Bessie M. Sullivan, M.D. The terms of the following directors
continued after such meeting: Angelo S. Agro, M.D., Patricia A. Costante, Paul
J. Hirsch, M.D., A. Richard Miskoff, D.O., Carl Restivo Jr., M.D. and Martin L.
Sorger, M.D.

MATTERS SUBMITTED TO A VOTE
---------------------------

To elect directors for a term expiring at the Annual Meeting of stockholders to
be held in 2006:

                                AFFIRMATIVE        WITHHELD       NOT VOTED
                                -----------        --------       ---------

   Harry M. Carnes, M.D.         7,573,662        2,801,573       4,188,908
   Dominick D'Agosta             7,579,991        2,795,244       4,188,908
   Bessie M. Sullivan, M.D.      7,561,481        2,813,754       4,188,908

To approve an amendment to the Company's restated Certificate of Incorporation
decreasing the minimum number of directors to five:

        AFFIRMATIVE             NEGATIVE           ABSTAIN        NOT VOTED
        -----------             --------           -------        ---------

         7,885,657              2,390,273          99,305         4,188,908










                                                                              25

<PAGE>

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

          a.   Exhibits


              Exhibit                                             Exhibit
              Number                                            Description

               3.1     Restated Certificate of Incorporation (incorporated by
                       reference to Exhibit 3.1 filed with the Company's
                       registration statement on Form S-1 filed on October 28,
                       1998).

               3.2     Bylaws of The MIIX Group as amended and restated
                       (incorporated by reference to Exhibit 3.2 filed with the
                       Company's Annual Report on Form 10-K for the year ended
                       December 31, 2002, filed on April 1, 2003).

              10.1     Employment Agreement of Allen G. Sugerman dated July 17,
                       2003 (incorporated by reference to the Company's Current
                       Report on Form 8-K filed on July 22, 2003).

               15*     Acknowledgement of Independent Auditors.

              31.1*    Certification of Chief Executive Officer under Section
                       302 of the Sarbanes-Oxley Act of 2002.

              31.2*    Certification of Chief Financial Officer under Section
                       302 of the Sarbanes-Oxley Act of 2002.

              32.1*    Certification of Chief Executive Officer under Section
                       906 of the Sarbanes-Oxley Act of 2002.

              32.2*    Certification of Chief Financial Officer under Section
                       906 of the Sarbanes-Oxley Act of 2002.

          *    Filed herewith.

          In accordance with SEC Release No. 33-8238, Exhibits 32.1 and 32.2 are
          to be treated as "accompanying" this report rather than "filed" as
          part of the report.

          b.   Reports on Form 8-K

               1.   The Company filed a Current Report under Item 9 on Form 8-K
                    on April 4, 2003, furnishing supplemental financial
                    information, including management's pro forma calculation of
                    the runoff value of the Company.

               2.   The Company filed a Current Report under Item 5 on Form 8-K
                    on April 24, 2003 and amended on April 25, 2003, furnishing
                    a press release that announced the notification by the New
                    York Stock Exchange that the trading of the Company's common
                    stock, traded under the symbol MHU, will be suspended at the
                    opening of business on April 28, 2003.

               3.   The Company filed a Current Report under Item 5 on Form 8-K
                    on May 6, 2003, furnishing a press release that announced
                    its agreement to an Order with the New Jersey Department of
                    Banking and Insurance that sets forth the framework for the
                    regulatory monitoring of MIIX Insurance Company as it
                    continues to non-renew and runoff its remaining business.

                                                                              26

<PAGE>

               4.   The Company filed a Current Report under Items 7 and 9 on
                    May 8, 2003, furnishing a press release that announced its
                    financial results for the three months ended March 31, 2003.

               5.   The Company filed a Current Report under Item 9 on Form 8-K
                    on May 21, 2003, furnishing supplemental financial
                    information, including management's pro forma calculation of
                    the runoff value of the Company.

               6.   The Company filed a Current Report under Items 5 and 7 on
                    Form 8-K on July 22, 2003, furnishing a press release that
                    announced the renewal of Allen G. Sugerman's employment
                    agreement as the Company's Chief Financial Officer and
                    Treasurer and the Employment Agreement of Allen G. Sugerman,
                    dated July 17, 2003.

               7.   The Company filed a Current Report under Items 7 and 12 on
                    Form 8-K on July 31, 2003, furnishing a press release that
                    announced its financial results for the three and six months
                    ended June 30, 2003.


                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                                           THE MIIX GROUP, INCORPORATED


                                    By:      /s/ Patricia A. Costante
                                       -----------------------------------------
                                         Chairman and Chief Executive Officer
                                         (principal executive officer)


                                    By:      /s/ Allen G. Sugerman
                                       -----------------------------------------
                                         Chief Financial Officer and Treasurer
                                         (principal financial and accounting
                                         officer)


                                    Dated:   August 14, 2003

                                                                              27