<PAGE>

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

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                            ------------------------

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

                       FOR THE QUARTER ENDED JUNE 30, 2002

   / /      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)

<TABLE>
<CAPTION>
<S>                                                     <C>
                    DELAWARE                                         22-3586492
(State or other jurisdiction of incorporation or        (I.R.S. employer identification number)
                  organization)
</TABLE>

               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
                                     ---    ---

        As of August 9, 2002, the number of outstanding shares of the
Registrant's Common Stock was 13,382,173.

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

<PAGE>

<TABLE>
<CAPTION>

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


<S>            <C>                                                                                               <C>
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.............14

ITEM 3.        QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK........................................23

PART II        OTHER INFORMATION.................................................................................24

ITEM 1.        LEGAL PROCEEDINGS.................................................................................24

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

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

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

SIGNATURES ......................................................................................................28
</TABLE>


                                                                               2
<PAGE>


The Private Securities Litigation Reform Act of 1995 provides a "safe harbor"
for forward-looking statements. This Form 10-Q, the Company's Annual Report to
Stockholders, any Form 10-K or any Form 8-K of the Company or any other written
or oral statements made by or on behalf of the Company may include
forward-looking statements which reflect the Company's current views with
respect to future events and financial performance. These forward-looking
statements are subject to uncertainties and other factors that could cause
actual results to differ materially from such statements. In particular, the
implementation of the Company's business plan is subject to completion of
financial analyses and other contingencies, regulatory approval and to the
Company's continuing ability to maintain sufficient risk-based capital to avoid
mandatory regulatory control. 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 Company's ability to achieve consistent
profitable growth, the Company's ability to diversify its product lines, 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, increased competitive pressure, the loss of significant customers,
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 values
expected or believed to be realized through the implementation of its current
business plan, including through the management of the run-off of its business
and possible business arrangements with MIIX Advantage, earnings, initiatives,
underwriting, cost controls, adequacy of loss and loss adjustment expense
reserves, and realizing shareholder value depend on a variety of factors,
including economic, competitive, market conditions, legal and regulatory 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 ACCOUNTANTS

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, 2002, and the related consolidated
statements of income for the three and six month periods ended June 30, 2002 and
2001, and the consolidated statements of cash flows for the six month periods
ended June 30, 2002 and 2001 and the consolidated statement of stockholders'
equity for the six month period ended June 30, 2002. These 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 referred to above
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, 2001 and 2000, and the
related consolidated statements of income, stockholders' equity, and cash flows
for each of the three years in the period ended December 31, 2001, not presented
herein, and in our report dated April 1, 2002, 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, 2001 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, 2001, is fairly stated, in all material respects, in relation to
the consolidated balance sheet from which it has been derived.


                                                     ERNST & YOUNG LLP


New York, New York
August 9, 2002

                                                                               4
<PAGE>
<TABLE>
<CAPTION>

                                          THE MIIX GROUP, INCORPORATED
                                           CONSOLIDATED BALANCE SHEETS
                                      (IN THOUSANDS, EXCEPT SHARE AMOUNTS)

                                                                                     JUNE 30,          DECEMBER 31,
                                                                                  ------------------------------------
                                                                                       2002                2001
                                                                                  ---------------    -----------------
                                     ASSETS                                        (Unaudited)
<S>                                                                               <C>                <C>
Securities available-for-sale:
   Fixed-maturity investments, at fair value (amortized cost: 2002 - $910,357;
     2001 - $1,061,499)                                                               $   907,911        $ 1,054,934
   Equity investments, at fair value (cost: 2002 - $7,641; 2001 - $7,081)                   6,681              6,623
   Short-term investments, at cost which approximates fair value.............             279,626            166,501
                                                                                      -----------        -----------
         Total investments...................................................           1,194,218          1,228,058
                                                                                      -----------        -----------

Cash.........................................................................                 650              2,029
Accrued investment income....................................................              11,377             13,261
Premium receivable, net......................................................              34,833             20,546
Reinsurance recoverable on unpaid losses.....................................             479,664            463,275
Prepaid reinsurance premiums ................................................               8,635             16,067
Reinsurance recoverable on paid losses, net..................................               8,027             51,632
Deferred policy acquisition costs............................................               3,276              4,416
Receivable for securities....................................................               6,349                  0
Net investment in direct financing leases....................................                   0             32,101
Other assets.................................................................              45,590             64,478
                                                                                      -----------        -----------
         Total assets........................................................         $ 1,792,619        $ 1,895,863
                                                                                      ===========        ===========

                      LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Unpaid losses and loss adjustment expenses...................................          $1,208,086        $ 1,196,998
Unearned premiums............................................................              84,676             88,598
Premium deposits.............................................................                   0             18,928
Funds held under reinsurance treaties........................................             344,796            374,156
Payable for securities.......................................................              17,354                  0
Notes payable and other borrowings...........................................                   0             10,699
Other liabilities............................................................              53,111             74,998
                                                                                      -----------        -----------
         Total liabilities...................................................           1,708,023          1,764,377
                                                                                      -----------        -----------

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 (2002 - 13,382,173 shares outstanding; 2001 - 13,479,760
   shares outstanding).......................................................                 166                166
Additional paid-in capital...................................................              53,909             53,927
Retained earnings............................................................              77,821            129,307
Treasury stock, at cost (2002 - 3,155,832 shares; 2001 - 3,058,245 shares)...             (40,199)           (39,631)
Stock purchase loans and unearned stock compensation.........................              (3,876)            (5,444)
Accumulated other comprehensive (loss).......................................              (3,225)            (6,839)
                                                                                      -----------        -----------
         Total stockholders' equity..........................................              84,596            131,486
                                                                                      -----------        -----------
         Total liabilities and stockholders' equity..........................         $ 1,792,619        $ 1,895,863
                                                                                      ===========        ===========
</TABLE>

SEE ACCOMPANYING NOTES
                                                                               5
<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,
                                                     -------------------------------    ---------------------------------
                                                         2002             2001               2002              2001
                                                     -------------    --------------    --------------    ---------------
<S>                                                     <C>              <C>              <C>               <C>
REVENUES
Net premiums earned..............................      $   49,083        $  46,468        $   86,236        $   91,102
Net investment income............................          16,158           20,906            34,407            42,216
Realized investment gains (losses)...............             222            4,552            (1,281)            7,571
Other revenue....................................           1,467            2,918             4,283             5,013
                                                       ----------        ---------        ----------        ----------
     Total revenues..............................          66,930           74,844           123,645           145,902
                                                       ----------        ---------        ----------        ----------

EXPENSES
Losses and loss adjustment expenses..............          54,497           46,438           136,301            92,042
Underwriting expenses............................          10,624           11,140            21,364            20,984
Funds held charges...............................           7,528            6,019            22,287            11,705
Other expenses...................................             396              829             1,670             1,806
Restructuring charge.............................               0                0             2,552                 0
                                                       ----------        ---------        ----------        ----------
     Total expenses..............................          73,045           64,426           184,174           126,537
                                                       ----------        ---------        ----------        ----------

Income (loss) before income taxes................          (6,115)          10,418           (60,529)           19,365
Income tax provision (benefit)...................               5            3,308           (11,416)            5,754
                                                       ----------        ---------        ----------        ----------
     Net income (loss) before cumulative effect
        of an accounting change..................          (6,120)           7,110           (49,113)           13,611
     Cumulative effect of an accounting change,
        net of tax...............................               0           (5,283)           (2,373)           (5,283)
                                                       ----------        ---------        ----------        ----------
     Net income (loss) ..........................      $   (6,120)       $   1,827        $  (51,486)       $    8,328
                                                       ==========        =========        ==========        ==========

Basic and diluted earnings (loss) per share
  before cumulative effect of an accounting
  change.........................................          $(0.45)          $ 0.52            $(3.67)           $ 1.00
Cumulative effect of an accounting change........            0.00            (0.39)            (0.18)            (0.39)
                                                           ------           ------            ------            ------
Basic and diluted earnings (loss) per share of
  common stock...................................          $(0.45)          $ 0.13            $(3.85)           $ 0.61
                                                           ======           ======            ======            ======

Dividend per share of common stock...............          $ 0.00           $ 0.05            $ 0.00            $ 0.10
                                                           ======           ======            ======            ======

SEE ACCOMPANYING NOTES
</TABLE>

                                                                               6
<PAGE>
<TABLE>
<CAPTION>

                                                       THE MIIX GROUP, INCORPORATED

                                                     CONSOLIDATED STATEMENT OF EQUITY
                                                  FOR THE SIX MONTHS ENDED JUNE 30, 2002
                                                   (IN THOUSANDS, EXCEPT SHARE AMOUNTS)
                                                                (UNAUDITED)

                                                                                            STOCK
                                                                                          PURCHASE
                                                                                          LOANS AND     ACCUMULATED
                                 NUMBER OF    COMMON  ADDITIONAL                          UNEARNED         OTHER           TOTAL
                                  SHARES       STOCK   PAID-IN    RETAINED   TREASURY       STOCK       COMPREHENSIVE  STOCKHOLDERS'
                                OUTSTANDING   ISSUED   CAPITAL    EARNINGS    STOCK     COMPENSATION    INCOME (LOSS)     EQUITY
                                -----------  -------- ---------- ---------- ---------- --------------- --------------- -------------
<S>                              <C>            <C>     <C>       <C>       <C>           <C>             <C>            <C>
Balance at January 1, 2002.....  13,479,760     $166    $53,927   $129,307  $(39,631)     $(5,444)        $(6,839)      $ 131,486
 Net loss......................                                    (51,486)                                               (51,486)

 Other comprehensive
     income (loss), net of tax:

   Net unrealized appreciation
     on securities available-
     for-sale, net of deferred                                                                              3,614           3,614
     taxes.....................

   Stock purchase and loan
     agreement activities......    (110,061)                                    (729)       1,568                             839

   Stock compensation and
     treasury stock activity         12,474                 (18)                 161                                          143
                                 ----------     ----    -------   --------  --------      -------         -------       ---------
Balance at June 30, 2002.......  13,382,173     $166    $53,909   $ 77,821  $(40,199)     $(3,876)        $(3,225)      $  84,596
                                 ==========     ====    =======   ========  ========      =======         =======       =========
</TABLE>

SEE ACCOMPANYING NOTES

                                                                               7
<PAGE>
<TABLE>
<CAPTION>

                                          THE MIIX GROUP, INCORPORATED

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

                                                                                             SIX MONTHS ENDED
                                                                                                 JUNE 30,
                                                                                     ----------------------------------
                                                                                          2002               2001
                                                                                     ---------------     --------------
<S>                                                                                  <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)................................................................       $  (51,486)         $    8,328
Adjustments to reconcile net income to net cash provided by operating activities:
Cumulative effect of an accounting change, net of tax............................            2,373               5,283
Unpaid losses and loss adjustment expenses.......................................           11,088             (13,171)
Unearned premiums................................................................           (3,922)             23,443
Premium deposits.................................................................          (18,928)            (15,618)
Premium receivable, net..........................................................          (14,287)            (19,237)
Reinsurance balances, net........................................................            5,288               6,259
Deferred policy acquisition costs................................................            1,140              (1,617)
Realized (gains) losses..........................................................            1,281              (7,571)
Depreciation, accretion and amortization.........................................           (1,371)             (1,752)
Accrued investment income........................................................            1,884               1,665
Net investment in direct financing leases........................................           32,101              (2,997)
Other assets.....................................................................           16,515               6,767
Other liabilities................................................................          (20,909)              2,870
                                                                                        ----------          ----------
Net cash used in operating activities............................................          (39,233)             (7,348)
                                                                                        ----------          ----------

CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from fixed-maturity investment sales....................................          522,757             279,467
Proceeds from fixed-maturity investments matured, called or prepaid..............           66,010              62,679
Proceeds from equity investment sales............................................                5                   0
Cost of investments acquired.....................................................         (438,099)           (195,268)
Change in short-term investments, net............................................         (113,125)           (137,689)
Net payable for securities.......................................................           11,005                   0
                                                                                        ----------          ----------
Net cash provided by investing activities........................................           48,553               9,189
                                                                                        ----------          ----------

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes payable and other borrowings.................................                0               1,041
Repayment of notes payable and other borrowings..................................          (10,699)             (2,532)
Cash dividends to stockholders...................................................                0              (1,356)
Subordinated loan certificates redeemed..........................................                0                (151)
                                                                                        ----------          ----------
Net cash used in financing activities............................................          (10,699)             (2,998)
                                                                                        ----------          ----------

Net change in cash...............................................................           (1,379)             (1,157)
Cash, beginning of period........................................................            2,029               2,191
                                                                                        ----------          ----------
Cash, end of period..............................................................       $      650          $    1,034
                                                                                        ----------          ----------
</TABLE>

SEE ACCOMPANYING NOTES
                                                                               8
<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 (the
"Underwriter"), 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 considered necessary for a fair
presentation. Such adjustments are of a normal recurring nature. 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, 2001 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 during fiscal
2002 as a result of unexpected and unprecedented increases in loss severity
during fiscal 2001. These increases required the Company to record an increase
in its net loss reserves of approximately $29.5 million; in consequence, the
Company was also required to take a valuation allowance against a deferred tax
asset approximately of $9.5 million during 2002. As a result of these
adjustments, the Company has, among other things:

o    Closed its operations in Dallas and Indianapolis;
o    Implemented a workforce reduction program;
o    Ceased writing insurance in the states of Virginia, Texas, Ohio,
     Pennsylvania and other states;
o    Submitted a risk-based capital plan to the New Jersey Department of
     Insurance and Banking;
o    Placed its New Jersey insurance operations into voluntary solvent runoff;
o    Engaged investment bankers to seek offers for any or all of the Company's
     assets and properties;
o    Withdrawn from the A.M. Best Rating System;
o    Announced that it will cease writing new insurance business in the State of
     New Jersey effective September 1, 2002;
o    Been advised by the New York Stock Exchange that it no longer satisfies two
     of the applicable listing criteria and that its common stock may be
     delisted;
o    Received a "going concern qualification" from the Company's independent
     accountants in its report accompanying the Company's Annual Report on Form
     10-K for the fiscal year ended December 31, 2001.

The Company anticipates that its subsidiary, MIIX Insurance Company, will cease
doing business as an operating insurance company on September 1, 2002.
Thereafter, the Company's business will consist principally of managing the
runoff of existing claims and managing the operations of a newly formed New
Jersey insurance company, MIIX Advantage Insurance Company of New Jersey. Thus,
the Company does not anticipate near term significant revenues from continuing
operations. Because the subsidiary, MIIX Insurance Company, will no longer be
writing insurance policies after August 31, 2002, our revenues and expenses will
decline significantly, and our historical financial statements cannot be relied
upon as indicative of future performance.

3.   BORROWING ARRANGEMENTS

On May 24, 2000, the Company obtained a $20.0 million revolving credit facility
with Amboy National Bank to meet certain non-operating cash needs as they may
arise. The credit facility, which terminated May 17, 2002, had a fixed interest
rate of 8.0% per annum. The Company had pledged 100% of The MIIX Insurance
Company stock as collateral under the credit facility. As of May 17, 2002, the
Company had borrowed approximately $9.1

                                                                               9
<PAGE>

million against the credit facility, which is included in notes payable and
other borrowings on the consolidated balance sheet, and incurred interest
expense on the loan of approximately $286,000 during 2002. As of May 17, 2002,
the Company had fixed-maturity investments in Amboy National Bank of
approximately $9.1 million earning a fixed interest rate of 6% per annum. A
former CEO of the Company is a brother of the Senior Vice President and CFO of
Amboy National Bank. The Company believes that the terms of the credit facility
described above were as fair to the Company as could have been obtained from an
unaffiliated third party. The Company, on May 23, 2002, repaid the $9.1 million
loan balance largely with the proceeds from the sale of substantially all the
net assets of Hamilton National Leasing Corporation and the credit facility was
closed. The Company's $9.1 million fixed-maturity investments in Amboy National
Bank matured and the funds were reinvested in short-term securities.

4.   LIABILITY FOR UNPAID LOSSES AND LOSS ADJUSTMENT EXPENSES

During the first quarter ended March 31, 2002, the Company increased net prior
year reserves of $29.5 million, which is net of $25.0 million of ceded loss and
loss adjustment expenses ("LAE") under the Company's aggregate reinsurance
contracts relating to these prior years. The increase in losses and LAE expenses
for the three months ended March 31, 2002 reflects primarily the reserve
strengthening action associated with management's best estimate based on updated
actuarial information available as of March 31, 2002. There were no significant
adjustments made to net loss and LAE reserves held on prior accident years
during the three months ended June 30, 2002.

5.   STOCK BASED COMPENSATION

The Company accounts for its stock-based compensation in accordance with APB
Opinion No. 25, Accounting for Stock Issued to Employees (APB 25) and related
interpretations. The Company's policy regarding stock options is to issue
options with an exercise price equal to the market price on the date of grant.
Under APB 25, no compensation expense is recognized given the Company's policy.
During the first six months of 2002, 10,000 restricted shares of The MIIX Group
common stock were granted, having a per share market value of $2.88, and 201,746
options to purchase shares of The MIIX Group common stock at exercise prices
ranging from $1.26 to $2.88 were granted, of which 74,246 shares were
immediately exercisable. During the six months ended June 30, 2002, 206,090
options and 10,000 shares of non-vested restricted stock were cancelled, and
12,474 options were exercised with exercise prices ranging from $7.45 to $11.91.
During the six months ended June 30, 2002, certain current and former officers
tendered 110,061 shares of The MIIX Group common stock and exercised 101,591
stock appreciation rights, which are designated as phantom stock options in the
respective agreement, and reduced the stock purchase and loan balances by
approximately $1.4 million. All transactions were recorded at the fair market
value of The MIIX Group common stock on the effective date of the related
transactions.

6.   EARNINGS PER SHARE

Earnings (loss) per share are computed using the weighted-average number of
common shares outstanding of 13,469,760, and 13,398,289 for the three and six
month periods ended June 30, 2002, respectively, and 13,555,378 for the three
and six month periods ended June 30, 2001.

                                                                              10
<PAGE>

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,
                                                        --------------------------------   ------------------------------
                                                             2002             2001             2002            2001
                                                        ---------------  ---------------   -------------  ---------------
                                                                 (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..........................      $ (6,120)        $  7,110         $(49,113)      $  13,611
     Cumulative effect of an accounting change,
        net of tax....................................             0           (5,283)          (2,373)         (5,283)
                                                            --------         --------         --------       ---------
     Net income (loss) ...............................      $ (6,120)        $  1,827         $(51,486)      $   8,328
                                                            ========         ========         ========       =========

Denominator:
     Denominator for basic earnings (loss) per share
        of common stock - weighted-average shares
        outstanding...................................        13,470           13,555           13,398          13,555
Effect of dilutive securities:
     Stock options and nonvested restricted stock.....             9               30               80              22
                                                            --------         --------         --------       ---------

     Denominator for diluted earnings (loss) per share
        of common stock - adjusted weighted-average
        shares outstanding............................        13,479           13,585           13,478          13,577
                                                            ========         ========         ========       =========

Basic and diluted earnings (loss) per share of common
   stock before cumulative effect of an accounting
   change.............................................      $  (0.45)        $   0.52         $  (3.67)      $    1.00
Cumulative effect of an accounting change.............          0.00            (0.39)           (0.18)          (0.39)
                                                            --------         --------         --------       ---------
Basic and diluted earnings (loss) per share of common
   stock..............................................      $  (0.45)        $   0.13         $  (3.85)      $    0.61
                                                            ========         ========         ========       =========
</TABLE>

7.   COMPREHENSIVE INCOME

The Company has classified its entire investment portfolio as
available-for-sale. Unrealized gain (loss) at June 30, 2002 and December 31,
2001 is reflected as accumulated other comprehensive income in the Consolidated
Statement of Equity and Consolidated Balance Sheets.

                                                                              11

<PAGE>

The components of comprehensive income, net of related tax, for the periods
ended June 30, 2002 and 2001 are as follows:

<TABLE>
<CAPTION>
                                                           THREE MONTHS ENDED                SIX MONTHS ENDED
                                                                JUNE 30,                         JUNE 30,
                                                      -----------------------------    ------------------------------
                                                         2002             2001            2002             2001
                                                      ------------     ------------    ------------    --------------
                                                             (in thousands)                   (in thousands)

<S>                                                      <C>               <C>           <C>                <C>
Net income (loss) ................................       $ (6,120)         $ 1,827       $(51,486)          $8,328

Other comprehensive income (loss):
  Unrealized holding appreciation (depreciation)
     arising during period (net of tax of $0,
     $(4,290), $0 and $309, respectively).........         15,215           (8,426)         2,333              607

  Reclassification adjustment for (gains) losses
     realized in net income (loss) (net of tax of
     $0, $1,252, $0 and $195, respectively).......           (222)           2,324          1,281              362
                                                         --------         --------       --------           ------

Net unrealized appreciation (depreciation) arising
  during the period ended June 30 (net of tax of
  $0, $(3,039), $0 and $504, respectively)........         14,993           (6,102)         3,614              969
                                                         --------         --------       --------           ------

Comprehensive income (loss).......................       $  8,873          $(4,275)      $(47,872)          $9,297
                                                         ========          =======       ========           ======
</TABLE>

8.   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, 2002
and 2001.

<TABLE>
<CAPTION>
                                                                                   SIX MONTHS ENDED JUNE 30,
                                                                              ------------------------------------
                                                                                   2002                2001
                                                                              ----------------    ----------------
                                                                                        (in thousands)
<S>                                                                            <C>                  <C>
Balance at beginning of period............................................        $ 4,416             $ 3,026
Cost deferred during the period...........................................          4,991               7,102
Amortization expense......................................................         (6,131)             (5,485)
                                                                                  -------             -------
Balance, end of period....................................................        $ 3,276             $ 4,643
                                                                                  =======             =======
</TABLE>

9.   RESTRUCTURING CHARGE

The first quarter of 2002 includes 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 Lawrenceville Property and Casualty Company into runoff.
The communication of these initiatives was made during the first quarter of
2002.

                                                                              12

<PAGE>

10.   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, 2002
and 2001 are as follows:

<TABLE>
<CAPTION>
                                                                SIX MONTHS ENDED JUNE 30,
                                       ----------------------------------------------------------------------------
                                                       2002                                   2001
                                       -------------------------------------  -------------------------------------
                                                             % 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%.........................           $(21,185)          (35.0)%               $6,778           35.0 %
Increase (decrease) in taxes
    resulting from:
    Valuation allowance............             10,835            17.9 %                    0            0.0 %
    Tax-exempt interest............               (444)           (0.7)%                 (892)          (4.6)%
    Other..........................               (622)           (1.0)%                 (132)          (0.7)%
                                              --------           ------                ------           ----
Total income tax expense (benefit).           $(11,416)          (18.8)%               $5,754           29.7 %
                                              ========           =====                 ======           ====
</TABLE>

The income tax benefit of $11.4 million resulted from the recognition of a net
operating loss carryback due to a tax law change enacted during the first
quarter of 2002.

11.   RECENT ACCOUNTING PRONOUNCEMENTS

On January 1, 2002, the Company adopted SFAS No. 141, "Business Combinations."
SFAS No. 141 requires that all business combinations be accounted for using the
purchase method. The purchase method of accounting requires that net assets
acquired that constitute a business be recorded at their fair value with any
excess cost over the net assets acquired be recorded as goodwill. SFAS No. 141
also requires that certain intangible assets acquired in a business combination
be recognized apart from goodwill. The provisions of SFAS No. 141 apply to all
business combinations initiated after June 30, 2001. Adoption of SFAS No. 141
did not have a material impact on the Company's financial condition or results
of operations.

On January 1, 2002, the Company adopted SFAS No. 142, "Goodwill and Other
Intangible Assets." Under SFAS No. 142, goodwill is no longer amortized as an
expense, but instead is reviewed and tested for impairment under a fair value
approach. SFAS 142 requires that goodwill be tested for impairment at least
annually, or more frequently as a result of an event or change in circumstances
that would indicate impairment may be necessary. On January 1, 2002, the Company
recorded a $2.4 million impairment related to goodwill, net of $0 tax ($0.18 per
diluted share). The cumulative effect of this change in accounting principle
eliminated goodwill amortization of approximately $111,000, net of tax ($0.01
per diluted share) for the quarter ended June 30, 2001 and approximately
$222,000, net of tax ($0.02 per diluted share) for the six months ended June 30,
2001.

In June 2001, The Financial Accounting Standards Board (FASB) issued SFAS 143,
"Accounting for Asset Retirement Obligations." SFAS 143 provides financial
accounting and reporting guidance for obligations associated with the retirement
of tangible long-lived assets and related asset retirement costs. SFAS 143 is
effective for financial statements issued for fiscal years beginning after June
15, 2002. Adoption of SFAS 143 is not expected to have a material impact on the
Company's financial condition or results of operations.

On January 1, 2002, the Company adopted SFAS 144, "Accounting for the Impairment
or Disposal of Long-Lived Assets." This standard provides a unified model for
all assets to be disposed of, including disposal of segments of a business
currently accounted for under APB Opinion No. 30. SFAS 144 also addresses
implementation issues related to disposal of assets raised by SFAS 121, and
supersedes SFAS 121 while

                                                                              13
<PAGE>

retaining the recognition and measurement provisions of SFAS 121 of long-lived
assets to be held and used and to be disposed of by sale. Adoption of SFAS 144
did not have a material impact on the Company's financial condition or results
of operations.

12.  RECLASSIFICATION

Certain amounts have been reclassified for the prior years to be comparable to
the 2002 presentation.

13.  SUBSEQUENT EVENTS

The Company was a reinsurer on a large excess of loss reinsurance contract
providing medical professional liability coverage on an institutional account
from January 1, 1999 to December 31, 2000. Effective July 1, 2002, the Company
commuted this treaty and recorded assumed paid losses of approximately $31.1
million and reduced assumed loss and loss adjustment expense reserves of
approximately of $31.1 million to $0. The commutation of this treaty had no
impact on the Company's financial condition or results of operations.


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 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 Financial
Accounting Standards ("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 carry forwards. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the

                                                                              14
<PAGE>

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 adversely impact our financial
position and results of operations. A valuation allowance has been established
for approximately the full value of the deferred tax assets at June 30, 2002.

PREMIUMS. Premiums are recorded as earned over the period the policies to which
they apply are in force. Premium deposits represent amounts received prior to
the effective date of the new or renewal policy period. The reserve for unearned
premiums is determined on a monthly pro-rata basis. Gross premiums include both
direct and assumed premiums earned.

LOSS AND LOSS ADJUSTMENT EXPENSES. The Company estimates its liability for loss
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. As such, all investments are carried at their fair values.
The Company has no securities classified as "trading" or "held-to-maturity."
Investments are recorded at the trade date.

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.

Premiums and discounts on investments (other than loan-backed and asset-backed
bonds) are amortized/accreted to investment income using the interest method
over the contractual lives of the investments. Realized investment gains and
losses are included as a component of revenues based on a specific
identification of the investment sold.

Short-term investments include investments maturing within one-year and other
cash and cash equivalent balances earning interest.

                                                                              15
<PAGE>

RECENT DEVELOPMENTS

The Company has been subjected to a number of adverse developments during fiscal
2002 as a result of unexpected and unprecedented increases in loss severity
during fiscal 2001. These increases required the Company to record an increase
in its net loss reserves of approximately $29.5 million; in consequence, the
Company was also required to take a valuation allowance against a deferred tax
asset approximately of $9.5 million during 2002. As a result of these
adjustments, the Company has, among other things:

o    Closed its operations in Dallas and Indianapolis;
o    Implemented a workforce reduction program;
o    Ceased writing insurance in the states of Virginia, Texas, Ohio,
     Pennsylvania and other states;
o    Submitted a risk-based capital plan to the New Jersey Department of
     Insurance and Banking;
o    Placed its New Jersey insurance operations into voluntary solvent runoff;
o    Engaged investment bankers to seek offers for any or all of the Company's
     assets and properties;
o    Withdrawn from the A.M. Best Rating System;
o    Announced that it will cease writing new insurance business in the State of
     New Jersey effective September 1, 2002;
o    Been advised by the New York Stock Exchange that it no longer satisfies two
     of the applicable listing criteria and that its common stock may be
     delisted;
o    Received a "going concern qualification" from the Company's independent
     accountants in its report accompanying the Company's Annual Report on Form
     10-K for the fiscal year ended December 31, 2001.

The Company anticipates that its subsidiary, MIIX Insurance Company, will cease
doing business as an operating insurance company on September 1, 2002.
Thereafter, the Company's business will consist principally of managing the
runoff of existing claims and managing the operations of a newly formed New
Jersey insurance company, MIIX Advantage Insurance Company of New Jersey. Thus,
the Company does not anticipate near term significant revenues from continuing
operations. Because the subsidiary, MIIX Insurance Company, will no longer be
writing insurance policies after August 31, 2002, our revenues and expenses will
decline significantly, and our historical financial statements cannot be relied
upon as indicative of future performance.

RESULTS OF OPERATIONS

THREE MONTHS ENDED JUNE 30, 2002 COMPARED TO THE THREE MONTHS ENDED JUNE 30,
2001

NET PREMIUMS EARNED. Net premiums earned were $49.1 million for the three months
ended June 30, 2002, an increase of approximately $2.6 million, or 5.6%, from
$46.5 million for the three months ended June 30, 2001. This net increase
consists of an increase of direct premiums earned of $1.0 million and decreased
ceded premiums earned of $1.6 million in the three months ended June 30, 2002.
The increase in direct earned premiums largely resulted from higher written
premiums during the last six months of 2001 as compared to same period of 2000.
The decrease in ceded premiums earned was primarily the result of increased
ceded premiums of $0.9 million associated with adjustments made to loss and LAE
reserves in second quarter 2001.

Total premiums written were $6.5 million for the three months ended June 30,
2002, a decrease of $17.0 million, or 72.4%, from total premiums written of
$23.5 million for the three months ended June 30, 2001. The net decrease in
total premiums written primarily reflects the Company's cessation of writing or
renewing policies in all states, in accordance with each state's specific
non-renewal requirements, except New Jersey, where the Company will renew
policies through August 31, 2002. Because MIIX Insurance Company will cease
writing insurance policies after August 31, 2002, the Company will not receive
premiums other than on insurance policies that it has been permitted to renew
before that date.

NET INVESTMENT INCOME. Net investment income decreased approximately $4.7
million, or 22.7%, to $16.2 million for the three months ended June 30, 2002
from $20.9 million for the same period in 2001. The decrease resulted from the
combined effects of lower market yields, a lower invested assets base and an
increase in average short-term investments held during 2002. MIIX Insurance
Company of New Jersey will be put in a

                                                                              16
<PAGE>

voluntary solvent run-off as of August 31, 2002 unless the New Jersey Department
of Banking and Insurance extends this date. As a result of this decision, the
Company determined that it would be prudent to restructure the Company's
investment portfolio to manage an expected increase in accelerated claims and a
lower invested asset base. The restructuring involves selling the portfolio's
longer-term securities and using the proceeds to acquire short-term securities.
The Company is attempting to restructure the portfolio, however, at a time when
the market is extremely volatile. Accordingly, the Company has experienced, and
most likely will continue to experience, losses in the sales of some of these
longer-term securities.

Average invested assets at amortized cost decreased to approximately $1.19
billion for the three months ended June 30, 2002 compared to approximately $1.27
billion for the same period last year. The average annualized pre-tax yield on
the investment portfolio decreased to 5.43% for the three months ended June 30,
2002 from 6.58% for the same period in 2001. The decrease is primarily due to
lower market yields and a higher proportion of investments held in short-term
securities for the reasons set forth above.

REALIZED INVESTMENT GAINS (LOSSES). Net realized investment gains (losses)
decreased approximately $4.4 million to $0.2 million for the three months ended
June 30, 2002 compared to net realized investment gains of $4.6 million for the
same period in 2001. Realized gains of approximately $3.1 million were recorded
during the three months ended June 30, 2002 due to sales of fixed-maturity
investments as a result of the restructuring of the investment portfolio, offset
by the recognition of $2.9 million of loss related to other-than-temporary
declines in investment values primarily attributable to collateralized bond
obligations. In 2001, the realized gains of $8.0 million were taken primarily
due to sales of fixed income securities in response to the changing yield curve,
somewhat offset by the recognition of $3.4 million of losses related to
other-than-temporary declines in investments values.

OTHER REVENUE. Other revenue decreased approximately $1.4 million to $1.5
million for the three months ended June 30, 2002 from $2.9 million for the same
period last year. This net decrease is composed of $0.6 million due to the sale
of substantially all of the assets of the Company's leasing subsidiary, Hamilton
National Leasing Corporation, effective April 30, 2002, finance charge income of
approximately $0.3 million resulting from the Company's premium financing
program, and a decrease of $0.5 million from other non-insurance operations. The
Company sold substantially all of the assets of its leasing operations at
approximately a net book value of $5.5 million.

LOSS AND LOSS ADJUSTMENT EXPENSE (LAE). The provision for losses and LAE
increased $8.1 million, or 17.4%, to $54.5 million for the three months ended
June 30, 2002 from $46.4 million for the three months ended June 30, 2001. The
provision for losses and LAE is net of ceded losses and LAE of $3.2 million and
$12.3 million for the three months ended June 30, 2002 and 2001, respectively.
The ratio of net losses and LAE to net premiums earned increased to 111.0% for
the three months ended June 30, 2002 from 99.9% for the same period in 2001.
This increase primarily results from using conservative loss ratios, which are
in line with the Insurance Departments' recommendations, on remaining current
year earned premiums. For the three months ended June 30, 2001, gross and ceded
loss and LAE reserves held on prior accident years were adjusted by
approximately $5.2 million and $3.2 million, respectively.

There were no net adjustments made to loss and LAE reserves held on prior
accident years during the three months ended June 30, 2002, although adjustments
were made to individual components of the reserves during the second quarter of
2002.

UNDERWRITING EXPENSES. Underwriting expenses decreased $0.5 million, or 4.6%, to
$10.6 million for the three months ended June 30, 2002 from $11.1 million for
the three months ended June 30, 2001. The net decrease for the quarter ended
June 30, 2002 primarily results from reductions in compensation and benefit
costs related to the restructuring plan, commission costs and public relations
costs largely offset by increased information systems depreciation and
maintenance costs and legal costs. The ratio of underwriting expenses to net
premiums earned improved to 21.6% for the three months ended June 30, 2002 from
24.0% for the same period in 2001 primarily due to higher net earned premiums
during the second quarter of 2002 and reduced expenses.

FUNDS HELD CHARGES. Funds held charges relate to the Company's aggregate
reinsurance contracts and increased $1.5 million to $7.5 million for the three
months ended June 30, 2002 from $6.0 million for the three months

                                                                              17
<PAGE>

ended June 30, 2001. This increase primarily resulted from adjustments made to
loss and LAE reserves held on prior years and related ceded premiums recorded
during the first quarter of 2002. Funds held charges are calculated based upon
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 $0.4 million or 52.2% to $0.4 million
for the three months ended June 30, 2002 from $0.8 million for the three months
ended June 30, 2001 and primarily consist of the costs associated with the
leasing and other businesses owned by the Company. 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 $3.3
million to a tax provision of $5,000 for the three months ended June 30, 2002,
resulting in a 0% effective tax rate compared to income tax provision of $3.3
million and an effective tax rate of 31.8% for the same period in 2001. The
decrease in the effective tax rate for the quarter ended June 30, 2002 results
primarily from the pre-tax loss during the second quarter of 2002 compared to
pre-tax income for the same period in 2001. The Company's cumulative net loss
position in recent years precludes recognition of the tax effects relating to
the pre-tax loss during the second quarter of 2002.

NET INCOME (LOSS). Net loss was $6.1 million for the three months ended June 30,
2002, a decrease of $7.9 million from a net income of $1.8 million for the three
months ended June 30, 2001 for the reasons discussed above.

SIX MONTHS ENDED JUNE 30, 2002 COMPARED TO THE SIX MONTHS ENDED JUNE 30, 2001

NET PREMIUMS EARNED. Net premiums earned were $86.2 million for the six months
ended June 30, 2002, a decrease of approximately $4.9 million, or 5.3%, from
$91.1 million for the six months ended June 30, 2001. This net decrease consists
of increased direct and ceded premiums earned of $5.4 million and $10.0 million,
respectively, and a decrease in assumed premiums of $0.3 million. The increase
in direct earned premiums is primarily attributable to increases in direct
premiums written in the last six months of 2001 as compared to the same period
in 2000. The increase in ceded earned premiums largely resulted from additional
ceded premiums of $13.1 million associated with the aggregate reinsurance
contracts resulting from the reserve strengthening recorded in the first quarter
of 2002. During the six months ended June 30, 2001 ceded earned premiums were
increased by $0.9 million due to adjustments made to prior year loss and LAE
reserves. The decrease in assumed premiums primarily relates to the non-renewal
of a large excess of loss reinsurance contract effective January 1, 2001.

Total premiums written were $102.0 million for the six months ended June 30,
2002, a decrease of $22.2 million, or 17.9%, from total premiums written of
$124.3 million for the six months ended June 30, 2001. The net decrease in total
premiums written primarily reflects the Company's cessation of writing or
renewing policies in all states, in accordance with each state's specific
non-renewal requirements, except New Jersey, where the Company will renew
policies through August 31, 2002. Because MIIX Insurance Company will cease
writing insurance policies after August 31, 2002, the Company will not receive
premiums other than on insurance policies that it has been permitted to renew
before that date.

NET INVESTMENT INCOME. Net investment income decreased approximately $7.8
million, or 18.5%, to $34.4 million for the six months ended June 30, 2002 from
$42.2 million for the same period in 2001. The decrease resulted from the
combined effects of lower market yields, a lower invested asset base and an
increase in average short-term investments held during the six months ended June
30, 2002. MIIX Insurance Company of New Jersey will be put in a voluntary
solvent run-off as of August 31, 2002 unless the New Jersey Department of
Banking and Insurance extends this date. As a result of this decision, the
Company determined that it would be prudent to restructure the Company's
investment portfolio to manage an expected increase in accelerated claims and a
lower invested asset base. The restructuring involves selling the portfolio's
longer-term securities and using the proceeds to acquire short-term securities.
The Company is attempting to restructure the portfolio, however, at a time when
the market is extremely volatile. Accordingly, the Company has experienced, and
most likely will continue to experience, losses in the sales of some of these
longer-term securities.

                                                                              18
<PAGE>

Average invested assets at amortized cost were approximately $1.21 billion
during the six months ended June 30, 2002 from $1.27 billion for the same period
in 2001. The average annualized pre-tax yield on the investment portfolio
decreased to 5.71% for the six months ended June 30, 2002 from 6.64% for the
same period in 2001 primarily as the result of declining market yields and
increase in short-term investments held during 2002 for the reasons set forth
above.

REALIZED INVESTMENT GAINS (LOSSES). Net realized investment gains (losses)
decreased approximately $8.9 million to a loss of $1.3 million for the six
months ended June 30, 2002 compared to net realized investment gains of $7.6
million for the same period in 2001. During the six months ended June 30, 2002
realized net gains of approximately $4.9 million were recognized due to sales of
fixed-maturity investments as a result of restructuring of the investment
portfolio, offset by $6.2 million of loss related to other-than-temporary
declines in investment values attributable to collateralized bond obligations.
In 2001, realized gains of $12.2 million were taken to reposition the portfolio
to the changing yield curve, somewhat offset by $4.6 million of loss related to
other-than-temporary declines in investment values attributable to declines for
interests in securitized assets.

OTHER REVENUE. Other revenue decreased approximately $0.7 million to $4.3
million for the six months ended June 30, 2002 from $5.0 million for the same
period last year. This net decrease is composed of $0.5 million due to the sale
of substantially all of the assets of the Company's leasing subsidiary, Hamilton
National Leasing Corporation, effective April 30, 2002, a decrease of $0.3
million from other non-insurance operations, and an increase in finance charge
income of approximately $0.1 million resulting from the Company's premium
financing program. The Company sold substantially all of the assets of its
leasing operations at approximately net book value of $5.5 million.

LOSSES AND LOSS ADJUSTMENT EXPENSES (LAE). The provision for losses and LAE
increased $44.3 million, or 48.1%, to $136.3 million for the six months ended
June 30, 2002 from $92.0 million for the six months ended June 30, 2001. The
provision for losses and LAE is net of ceded losses and LAE of $32.8 million and
$21.4 million for the six months ended June 30, 2002 and 2001, respectively. The
ratio of net losses and LAE to net premiums earned increased to 158.1% for the
six months ended June 30, 2002 from 101.0% for the same period in 2001.

The significant increase in losses and LAE expenses for six months ended June
30, 2002 reflects primarily the loss reserve strengthening recorded during the
first quarter of 2002 associated with management's best estimate based on
updated actuarial information available as of March 31, 2002. The Company
recorded a $29.5 net adjustment to loss and LAE expenses as of March 31, 2002.
Prior year gross and ceded loss and LAE reserves were increased by $54.5 million
and $25.0 million, respectively. The strengthening in prior year gross loss and
LAE reserves consists of $31.3 million attributable to physician business
written by LP&C for the coverage years of 1998-2001, $31.3 million related to
New Jersey physicians primarily for business earned during 1994-1996, and other
increases of $8.0 million relating primarily to Pennsylvania institutional
business for the 1999-2001 coverage years, written by MIIX. These increases were
partly offset by reductions in prior year gross loss and LAE reserves of $9.5
million related to Pennsylvania physician business earned primarily during 1998
and 1999 and $6.6 million related to New Jersey physician business earned during
2001, reflecting the Company's recent improvements in underwriting, risk
selection, and pricing disciplines.

For the six months ended June 30, 2001, gross loss and LAE reserves held on
prior accident years were adjusted by approximately $5.2 million and $3.2
million, respectively.

UNDERWRITING EXPENSES. Underwriting expenses increased $0.4 million or 1.8% to
$21.4 million for the six months ended June 30, 2002, from $21.0 million for the
six months ended June 30, 2001. This increase is primarily due to increased
information systems depreciation and maintenance costs and legal costs offset,
in part, by decreased public relations costs, commission costs, and compensation
and benefit costs related to the restructuring plan. The ratio of underwriting
expenses to net premiums earned increased to 24.8% for the six months ended June
30, 2002 from 23.0% for the same period in 2001. This increase primarily
resulted from additional ceded premiums of $13.1 million associated with the
loss reserve strengthening at March 31, 2002. The ratio of underwriting expenses
to net premiums earned excluding the impact of the additional ceded premiums
associated with the loss reserve strengthening was 21.5% for the six months
ended June 30, 2002.

                                                                              19
<PAGE>

FUNDS HELD CHARGES. Funds held charges increased $10.6 million to $22.3 million
for the six months ended June 30, 2002, from $11.7 million for the six months
ended June 30, 2001. This increase is primarily attributable to adjustments made
to loss and loss adjustment expense reserves held on prior years recorded during
the first quarter of 2002. During the six months ended June 30, 2001, funds held
charges decreased $0.4 million associated with prior year loss and LAE reserve
adjustments. 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 $0.1 million, or 7.5%, to $1.7 million
for the six months ended June 30, 2002, from $1.8 million for the same period
last year and primarily consist of the costs associated with the leasing and
other businesses owned by the Company. Effective April 30, 2002, the Company
sold substantially all of the assets of its leasing subsidiary, Hamilton
National Leasing Corporation, at approximately net book value of $5.5 million.

RESTRUCTURING CHARGE. The Company announced, in March, 2002, its intention to
place all operations of Lawrenceville Property and Casualty Company into run-off
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.

INCOME TAX PROVISION (BENEFIT). Income taxes decreased approximately $17.2
million to a tax benefit of $11.4 million for the six months ended June 30,
2002, resulting in an effective tax rate of (18.9)%, compared to a tax expense
of $5.8 million, and an effective tax rate of 29.7% for the same period in 2001.
The tax benefit resulted from the recognition of a net operating loss carryback
due to a tax law change enacted during 2002. The Company had previously
recognized a valuation allowance on its net deferred tax asset at December 31,
2001.

CUMULATIVE EFFECT OF AN ACCOUNTING CHANGE, NET OF TAX. On January 1, 2002, the
Company adopted SFAS 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 142 was a charge of $2.4 million on January 1, 2002. On April 1,
2001, the Company adopted EITF 99-20, "Recognition of Interest Income and
Impairment on Purchased and Retained Beneficial Interests in Securitized
Financial Assets," which establishes new guidelines for recognition of income
and other-than-temporary declines for interests in securitized assets. The
cumulative effect of adopting EITF 99-20 was a $5.3 million loss, net of $2.8
million tax, on April 1, 2001.

NET INCOME (LOSS). Net loss was $51.5 million for the six months ended June 30,
2002, a decrease of $59.8 million from a net income of $8.3 million for the six
months ended June 30, 2001 for the reasons discussed above. Excluding the
cumulative effect of the accounting change associated with adoption of SFAS 142,
net loss was $49.1 million for the six months ended June 30, 2002.

FINANCIAL CONDITION

CASH AND INVESTED ASSETS. Aggregate invested assets at fair value, including
cash and short-term investments, were $1,194.9 million at June 30, 2002 and
$1,231.1 million at December 31, 2001. The net decrease of $35.2 million largely
resulted from the net decline in market values and sales of fixed-maturity
investments.

Fixed-maturity investments available for sale at fair value, including
investments, were $1,187.5 million, or 99.4% of the investment portfolio of the
Company, as of June 30, 2002. At that date, the average credit quality of the
fixed income portfolio was "AA," as defined by Standard & Poor's, while the
total portfolio effective duration (excluding short-term investments) was 4.59
years.

UNPAID LOSSES AND LAE, REINSURANCE RECOVERABLE ON UNPAID LOSSES AND LAE AND
FUNDS HELD UNDER REINSURANCE TREATIES. Gross unpaid losses and LAE were $1,208.1
million at June 30, 2002 and $1,197.0 million at December 31, 2001. Reinsurance
recoverable on unpaid losses and LAE was $479.7 million at June 30, 2002 and
$463.3 million at December 31, 2001. Substantially all of the reinsurance
recoverables at June 30, 2002 are collateralized by the funds held under
reinsurance treaties and letters of credit.

                                                                              20
<PAGE>

EQUITY. Total equity was $84.6 million at June 30, 2002 and $131.5 million at
December 31, 2001. The net decrease of $46.9 million consisted of a net loss of
$51.5 million, change in unrealized net appreciation of investments of $3.6
million and $1.0 million resulting in treasury stock activity associated with
net stock purchase and loan, of which $143,000 related to exercising of stock
options and $839,000 resulted from the tendering of shares of The MIIX Group
common stock and a reduction in the stock purchase and loan balance.

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 the issuance of debt
and equity securities. The insurance company subsidiaries are restricted by
state regulation in the amount of dividends they can pay in relation to surplus
and net income without the consent of the applicable state regulatory authority,
principally the New Jersey Department of Banking and Insurance. New Jersey
regulations permit the payment of any dividend or distribution only out of
statutory earned (unassigned) surplus. The Department may limit or disallow the
payment of any dividend or distribution if an insurer's statutory surplus
following the payment of any dividend or other distribution is not deemed
adequate in relation to its outstanding liabilities and adequate to meet its
financial needs, or the insurer is determined to be in a hazardous financial
condition. The Company's other insurance subsidiaries are subject to similar
provisions and restrictions. 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 of Banking and Insurance approved a $2.1 million
dividend payment from MIIX Insurance to The MIIX Group. However, The MIIX Group
does not expect that MIIX Insurance Company 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 of Banking and Insurance specifically
approves dividend payments in the future.

On May 3, 2002, the Company's business plan, which provides for the MIIX
Insurance Company to be placed in voluntary solvent run-off was approved by the
New Jersey Department of Banking and Insurance. MIIX Insurance Company will
continue to renew New Jersey physician business until August 31, 2002 unless the
New Jersey Department of Banking and Insurance extends that date and has ceased
writing business in all states other than New Jersey 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 its revenues, primarily
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 has received tentative approval for the formation and
capitalization of a physician-supported insurance company, MIIX Advantage
Insurance Company of New Jersey, that focuses on MIIX Insurance Company's
historically strongest business segment, New Jersey physicians. It is
anticipated that the Company will enter into a management contract and other
financial arrangements with the new company. The revenues from these two
agreements will be the Company's only source of revenues in the foreseeable
future.

On May 23, 2002, the Company repaid the $9.1 million loan balance under a credit
facility with Amboy National Bank largely with the proceeds from the sale of
substantially all the net assets of Hamilton National Leasing Corporation.
Thereafter, the credit facility closed. The Company's $9.1 million
fixed-maturity investments in Amboy National Bank matured and the funds were
reinvested in short-term securities. The Company currently does not have any
bank financing.

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 $39.2
million and $7.3 million for the six months ended June 30, 2002 and 2001,
respectively, and $23.6 million for the year ended 2001. 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 and
the settlement of a few higher severity cases, lower investment income and a
decrease in premium collection reflecting the decrease in written premium
offset, in part, by a federal income tax refund. 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
                                                                              21
<PAGE>

year to year. Because the Company will not write, or renew existing, insurance
policies after August 30, 2002, cash flow is expected to decrease substantially
after this date. The Company's cash flow could be further impacted adversely if
it becomes subject to mandatory control. See "Risks and Uncertainties."

The Company 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 currently plans to
continue this strategy. At June 30, 2002, the portfolio has an average credit
quality of "AA," an average duration of 3.5 years, and an annualized yield of
5.7%.

At June 30, 2002, the Company held collateral of $344.8 million and $374.2
million at December 31, 2001, in the form of funds held and $166.5 million at
June 30, 2002 and December 31, 2001 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 four of the six required trust accounts
and is in the process of finalizing the remaining two 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 7.5% 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 our
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 August 1999, the Company approved a stock repurchase program authorizing
the purchase of up to 1,000,000 shares of its common stock in the open market.
During November 1999, the program was amended, authorizing the purchase of up to
an additional 2,000,000 shares. Through December 31, 2000, 3,000,000 shares had
been repurchased at a total cost of $39.3 million and 25,933 shares have been
issued from treasury at a value of $0.4 million. No stock was repurchased under
the stock repurchase program during 2001 or during the six months ended June 30,
2002. We do not expect to repurchase any additional common stock under this
program.

During 2001, The MIIX Group repurchased 84,178 shares at a value of
approximately $0.7 million related to a former officer of the Company. During
the six-month period ended June 30, 2002, certain current and former officers
tendered 110,061 shares in the aggregate of The MIIX Group common stock and
exercised 101,591 stock appreciation rights, which are designated as phantom
stock options in the respective agreements. These tenders reduced the stock
purchase and loan balances of the officers by approximately $1.4 million in the
aggregate. All transactions were recorded at the fair market value of The MIIX
Group common stock on the effective date of the respective 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 MANDATORY CONTROL. If the Company's capital or surplus amounts fall
below the thresholds established under New Jersey insurance laws, MIIX Insurance
Company may be unable to avoid mandatory control. We have previously announced
that the risk-based capital level of MIIX Insurance Company is below the
authorized control level but above the mandatory control level. Any of the
following events could result in MIIX Insurance Company being placed under
mandatory control, including net losses and LAE reserve adjustments and a
deterioration in the Company's investment portfolio.

Should MIIX Insurance Company be subjected to mandatory control, the New Jersey
Department of Banking and Insurance would have the authority to, among other
things: replace the Company's management with Department

                                                                              22
<PAGE>
appointees; liquidate MIIX Insurance Company; sell MIIX Insurance Company;
and/or restructure the Company's internal operations. The impact of any such
decisions by the Department of Banking and Insurance cannot be predicted. If
MIIX Insurance Company's assets are sold or liquidated by the Department,
shareholders would likely receive little if any value from the sale or
liquidation.

RISKS IN CLAIMS EXPERIENCE. The Company currently anticipates that its assets
will be sufficient to discharge its liabilities. However, this projection is
based upon actuarial projections, which may or may not prove to have been
accurate. Should the Company experience worse than anticipated losses, it is
highly likely that MIIX Insurance Company would become subject to mandatory
control. Although the loss experience during the prior quarter was in line with
estimates, the Company is unsure whether this short-term experience indicates a
stabilization of its loss experience or a random variation. Future adjustments
to LAE reserves required by worse than anticipated loss experience may cause the
Company to become subject to mandatory control. Furthermore, it is possible that
the Company will see some acceleration of claims in connection with the run-off
of MIIX Insurance Company. Should this acceleration become substantial, even
favorable settlements could result in short-term adjustments to the Company's
LAE reserves, which would cause it to fall under mandatory control.

LIMITED INCOME FROM OPERATIONS. MIIX Insurance Company will discontinue writing
insurance on September 1, 2002. 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 health care 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 mandatory control.

INVESTMENT RISK. A significant portion of the Company's assets are invested in
fixed-maturity investments. Thus, 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 is seeking to
restructure its investment portfolio so as to reduce the level of risk to which
it is exposed. In the process of restructuring, the Company may liquidate
securities, sometimes at a loss. 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.
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 mandatory control.

DELISTING OF COMMON STOCK. The New York Stock Exchange ("NYSE") may delist the
Company's common stock. On July 19, 2002, the NYSE notified the Company that its
stock price and market capitalization were below NYSE listing standards, and
asked the Company to respond within 45 days with a business plan that
demonstrates compliance with continued listing standards within 18 months. While
the Company has informed the NYSE of its intent to submit the required business
plan, there can be no assurance that the NYSE will approve the plan, or that the
Company's common stock will continue to be listed on the NYSE. If the Company's
stock is delisted, it will become more difficult for shareholders to sell their
stock.

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
assets 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.
                                                                              23
<PAGE>

The Company's investment portfolio at June 30, 2002 is primarily composed of
fixed-maturity securities, consisting of 76.0% of total investments at market
value. U.S. government and tax-exempt bonds represent 9.6%, corporate bonds
represent 30.6% and mortgage backed and asset backed securities represent 35.8%
of fixed-maturity investments. Short-term investments represent 23.4% of total
investments at market value and equity investments, primarily common stock,
accounts for the remaining 0.6%.

At June 30, 2002, the Company had net after-tax unrealized losses on its
fixed-maturity investment portfolio of $2.3 million. The deferred tax benefit on
this amount of $0.8 million is fully offset by a deferred tax valuation
allowance. The net after-tax unrealized losses of $2.3 million on the
fixed-maturity portfolio represented 2.6% of total stockholders' equity gross of
net after-tax unrealized losses on investments. At December 31, 2001, the
Company had net after-tax unrealized losses on its fixed-maturity investment
portfolio of $6.6 million, which included a deferred tax valuation allowance of
$2.3 million.

Management does not expect that significant unrealized losses will be realized
on the fixed-maturity portfolio given the credit quality of the portfolio at
June 30, 2002 and the Company's policy of matching asset and liability
maturities. 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 corporate 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 purchases 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 portfolio 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. At June 30, 2002, the cost and fair value of equity
investments was $7.6 million and $6.7 million, respectively, compared to $7.1
million and $6.6 million at December 31, 2001, respectively. The net after-tax
unrealized losses of $1.0 million on the equity portfolio represented 1.1% of
total stockholders' equity gross of net after-tax unrealized losses on
investments.

There have been no material changes to the Company's financial market risks
since December 31, 2001.

PART II  OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

DEATH BENEFIT PLAN

In October 1999, a former Underwriter Board member filed an action against the
Exchange, Underwriter, The MIIX Group and Daniel Goldberg, seeking damages
arising out of the unanimous decision of the Exchange and Underwriter Boards in
July 1998 to terminate a Death Benefit Plan that was adopted in December 1991 to

                                                                              24
<PAGE>

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 is
appealing this decision. Two subsequent actions by other Plan participants, one
styled as a class action on behalf of all Plan participants, have been filed
against the Company. These actions have been stayed pending the outcome of the
appeal in the first action. The Company and external counsel believe that the
Company will be successful on appeal.

The Company may be a party to litigation from time to time in the ordinary
course of business. Management believes that the Company is not currently a
party to any litigation which may have a material adverse effect on the Company.

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

The MIIX Group's annual meeting of shareholders was held on May 9, 2002, at
which time the following directors were elected by the shareholders of The MIIX
Group, to serve as the Class of directors for a term expiring at the Annual
Meeting of shareholders to be held in 2005: Patricia Anne Costante (affirmative:
7,367,480; withheld: 267,042), Carl Restivo Jr., MD (affirmative: 6,835,576;
withheld 789,946) and Angelo S. Agro, MD (affirmative: 6,839,037; withheld
795,485). The terms of the following directors continued after such meeting:
Harry M. Carnes, MD, Paul J. Hirsch, MD, Vincent A. Maressa, Esq., A. Richard
Miskoff, DO, Eileen M. Moynihan, MD, Martin L. Sorger, MD and Bessie M.
Sullivan, MD.


                                                                              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, 2001, filed on April 1, 2001.)

                10.71*+  Severance Agreement between The MIIX Group,
                         Incorporated, New Jersey State Medical Underwriters,
                         Inc. and Stewart J. Gerson dated July 3, 2002.

                    15*  Acknowledgement of Independent Accountant.

                *   Filed herewith.
                +   Represents a management contract or compensatory plan or
                    arrangement.

         b.   Reports on Form 8-K

              A current report on Form 8-K was filed by the Company on June 13,
              2002 announcing the departure of Stewart J. Gerson, Chief
              Financial Officer for The MIIX Group, Inc., and the assumption of
              his duties by Tom Redman, the Company's former Chief Financial
              Officer.

              A current report on Form 8-K was filed by the Company on July 25,
              2002 announcing the appointment of Allen G. Sugerman as Interim
              Chief Financial Officer for The MIIX Group, Inc.

              A current report on Form 8-K was filed by the Company on August
              14, 2002 providing the certifications of the Chief Executive
              Officer and the Chief Financial Officer and pursuant to Section
              906 of Sarbanes-Oxley Act of 2002.

                                                                              26
<PAGE>

                                   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
                                       -----------------------------------------
                                         Interim Chief Financial Officer
                                         (principal financial and accounting
                                         officer)


                                    Dated:   August 13, 2002


                                                                              27
<PAGE>

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


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


                                Dated:   August 13, 2002

                                                                              28