<PAGE>

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

                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

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

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

                      FOR THE QUARTER ENDED MARCH 31, 2003

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

         For the Period From _________ to __________.

                        Commission File Number: 001-14593

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

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

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

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

Securities registered pursuant to Section 12(b) of the Act:
Common Stock, par value $0.01 per share
---------------------------------------

Securities registered pursuant to Section 12(g) of the Act: None
                                                           -----

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

                                 YES X   NO
                                    ---    ---

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

                                 YES X   NO
                                    ---    ---

     As of May 15, 2003, the number of outstanding shares of the Registrant's
Common Stock was 14,564,143.

================================================================================
<PAGE>


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


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

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

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS................................................14

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK...........21

ITEM 4.  CONTROLS AND PROCEDURES..............................................22

PART II  OTHER INFORMATION....................................................22

ITEM 1.  LEGAL PROCEEDINGS....................................................22

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.....................................23

SIGNATURES....................................................................24














                                                                               2

<PAGE>


                           FORWARD-LOOKING STATEMENTS


This Form 10-Q contains forward-looking statements that are based on the
Company's estimates and expectations concerning future events and anticipated
results and are subject to certain risks and uncertainties that could cause
actual results to differ materially from those reflected in the forward-looking
statements. These forward-looking statements are subject to uncertainties and
other factors that could cause actual results to differ materially from such
statements. In particular, the implementation of the Company's business plan is
subject to completion of financial analyses and other contingencies. 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 manage the run-off of its insurance business, the Company's
ability to settle claims effectively, the Company's ability to manage its
investment portfolio, the Company's ability to service MIIX Advantage under the
management contract and other arrangements, the Company's ability to sell
additional management and consulting services to additional providers of medical
malpractice insurance, the Company's ability to avoid rehabilitation or
liquidation, 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, general economic conditions, including changing
interest rates, rates of inflation and the performance of the financial markets,
judicial decisions and rulings, changes in domestic and foreign laws,
regulations and taxes, effects of acquisitions and divestitures, and various
other factors. The words "believe," "expect," "anticipate," "project" and
similar expressions identify forward-looking statements. The Company's
expectations regarding future earnings, growth initiatives, underwriting, cost
controls, adequacy of loss and loss adjustment expense reserves, and enhancing
shareholder value depend on a variety of factors, including economic,
competitive and market conditions which may be beyond the Company's control and
are thus difficult or impossible to predict. In light of the significant
uncertainties inherent in the forward-looking information herein, the inclusion
of such information should not be regarded as representation by the company or
any other person that the Company's objectives or plans will be realized.
Readers are cautioned not to place undue reliance in 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 March 31, 2003, and the related consolidated
statements of income for the three month period ended March 31, 2003 and 2002,
and the consolidated statements of cash flows for the three month period ended
March 31, 2003 and 2002 and the consolidated statement of stockholders' equity
for the three month period ended March 31, 2003. 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 as of March 31,
2003 and for the three-month period ended March 31, 2003 and 2002 for them to be
in conformity with accounting principles generally accepted in the United
States.

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


                                               ERNST & YOUNG LLP


New York, New York
May 15, 2003

                                                                               4
<PAGE>

<TABLE>
<CAPTION>
                                            THE MIIX GROUP, INCORPORATED
                                             CONSOLIDATED BALANCE SHEETS
                                        (IN THOUSANDS, EXCEPT SHARE AMOUNTS)

                                                                                     MARCH 31,          DECEMBER 31,
                                                                                  -------------------------------------
                                                                                        2003                 2002
                                                                                  ----------------     ----------------
                                     ASSETS                                         (Unaudited)
<S>                                                                                    <C>                  <C>
Securities available-for-sale:
   Fixed-maturity investments, at fair value (amortized cost: 2003 - $698,179;
     2002 - $771,414)                                                                  $  716,526           $  788,580
   Equity investments, at fair value (cost: 2003 - $4,804; 2002 - $4,804)                   5,172                5,187
   Short-term investments, at cost which approximates fair value.............             273,989              262,537
                                                                                       ----------           ----------
         Total investments...................................................             995,687            1,056,304
                                                                                       ----------           ----------

Cash.........................................................................               4,407                4,667
Accrued investment income....................................................               8,024                8,339
Premium receivable, net......................................................               2,761                7,602
Reinsurance recoverable on unpaid losses.....................................             405,480              457,005
Prepaid reinsurance premiums ................................................               3,176                3,053
Reinsurance recoverable on paid losses, net..................................              41,206               31,822
Deferred policy acquisition costs............................................                  20                1,016
Receivable for securities....................................................               1,743                    0
Other assets.................................................................              45,847               47,055
                                                                                       ----------           ----------
         Total assets........................................................          $1,508,351           $1,616,863
                                                                                       ==========           ==========

                      LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Unpaid losses and loss adjustment expenses...................................          $1,082,370           $1,151,635
Unearned premiums............................................................               9,873               25,262
Premium deposits.............................................................                   0                  209
Funds held under reinsurance treaties........................................             300,483              332,741
Payable for securities.......................................................               9,671                    0
Other liabilities............................................................              60,336               65,750
                                                                                       ----------           ----------
         Total liabilities...................................................           1,462,733            1,575,597
                                                                                       ----------           ----------
Stockholders' Equity
Preferred stock, $0.01 par value, 50,000,000 shares authorized, no shares
   issued and outstanding....................................................
                                                                                                0                    0
Common stock, $0.01 par value, 100,000,000 shares authorized, 16,538,005
   shares issued (2003 - 14,564,143 shares outstanding; 2002 - 13,382,173
   shares outstanding).......................................................                 166                  166
Additional paid-in capital...................................................              40,270               53,909
Retained earnings............................................................              18,563               13,323
Treasury stock, at cost (2003 - 1,973,862 shares; 2002 - 3,155,832 shares)...             (25,038)             (40,199)
Stock purchase loans and unearned stock compensation.........................              (5,294)              (3,662)
Accumulated other comprehensive income ......................................              16,951               17,729
                                                                                       ----------           ----------
         Total stockholders' equity..........................................              45,618               41,266
                                                                                       ----------           ----------
         Total liabilities and stockholders' equity..........................          $1,508,351           $1,616,863
                                                                                       ==========           ==========

SEE ACCOMPANYING NOTES

                                                                                                                    5
</TABLE>
<PAGE>

<TABLE>
<CAPTION>

                                         THE MIIX GROUP, INCORPORATED

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

                                                                                            THREE MONTHS ENDED
                                                                                                 MARCH 31,
                                                                                         -----------------------
                                                                                           2003           2002
                                                                                         --------       --------
<S>                                                                                      <C>                <C>
REVENUES
Net premiums earned..................................................................    $ 9,860        $ 37,153
Net investment income................................................................      0,945          18,249
Realized investment losses...........................................................      2,004)         (1,503)
Other revenue........................................................................      1,638           2,816
                                                                                         -------        --------
     Total revenues..................................................................      0,439          56,715
                                                                                         -------        --------
EXPENSES
Losses and loss adjustment expenses..................................................      6,963          81,804
Underwriting expenses................................................................      5,743          10,740
Funds held charges...................................................................      4,135          14,759
Other expenses.......................................................................        246           1,274
Restructuring charge.................................................................          0           2,552
                                                                                         -------        --------
     Total expenses..................................................................      7,087         111,129
                                                                                         -------        --------

Income (loss) before income taxes....................................................      3,352         (54,414)
Income tax benefit...................................................................      1,888)        (11,421)
     Net income (loss) before cumulative effect of an accounting change..............      5,240         (42,993)
     Cumulative effect of an accounting change, net of tax...........................          0          (2,373)
                                                                                         -------        --------
     Net income (loss) ..............................................................    $ 5,240        $(45,366)
                                                                                         =======        ========

Basic earnings (loss) per share before cumulative effect of an accounting change.....      $0.39          $(3.20)
Cumulative effect of an accounting change............................................       0.00           (0.18)
                                                                                           -----          ------
Basic earnings (loss) per share......................................................      $0.39          $(3.38)
                                                                                           =====          ======

Diluted earnings (loss) per share before cumulative effect of an accounting change...      $0.38          $(3.20)
Cumulative effect of an accounting change............................................       0.00           (0.18)
                                                                                           -----          ------
Diluted earnings (loss) per share....................................................      $0.38          $(3.38)
                                                                                           =====          ======

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

SEE ACCOMPANYING NOTES
                                                                                                                       6
</TABLE>
<PAGE>

<TABLE>
<CAPTION>

                                                     THE MIIX GROUP, INCORPORATED

                                                   CONSOLIDATED STATEMENT OF EQUITY
                                               FOR THE THREE MONTHS ENDED MARCH 31, 2003
                                                  (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, 2003.....  13,382,173     $166       $53,909   $13,323  $(40,199)     $(3,662)        $17,729        $41,266
  Net income...................                                        5,240                                                 5,240

  Other comprehensive
    income (loss), net of tax:

   Net unrealized depreciation
    on securities available-
    for-sale, net of deferred
    taxes......................                                                                                (778)          (778)

   Stock purchase and loan
    agreement activities.......      (8,922)                                        (8)        (102)                          (110)

   Stock compensation and
     treasury stock activity...   1,190,892                (13,639)             15,169       (1,530)                             0
                                 ----------     ----       -------   -------  --------      -------         -------        -------

Balance at March 31, 2003......  14,564,143     $166       $40,270   $18,563  $(25,038)     $(5,294)        $16,951        $45,618
                                 ==========     ====       =======   =======  ========      =======         =======        =======


SEE ACCOMPANYING NOTES











                                                                                                                                7
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
                                              THE MIIX GROUP, INCORPORATED

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

                                                                                            THREE MONTHS ENDED
                                                                                                 MARCH 31,
                                                                                     --------------------------------
                                                                                          2003               2002
                                                                                     -------------       ------------
<S>                                                                                     <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)...............................................................        $   5,240         $ (45,366)
Adjustments to reconcile net income to net cash provided by operating activities:
Cumulative effect of an accounting change, net of tax...........................                0             2,373
Unpaid losses and loss adjustment expenses......................................          (69,265)           31,088
Unearned premiums...............................................................          (15,389)           42,170
Premium deposits................................................................             (209)          (18,928)
Premium receivable, net.........................................................            4,841           (24,597)
Reinsurance balances, net.......................................................            9,760            (2,881)
Deferred policy acquisition costs...............................................              996            (1,396)
Realized losses.................................................................            2,004             1,503
Depreciation, accretion and amortization........................................              711              (859)
Accrued investment income.......................................................              315               885
Net investment in direct financing leases.......................................                0               642
Other assets....................................................................             (880)           (3,622)
Other liabilities...............................................................           (5,380)          (12,060)
                                                                                        ---------         ---------
Net cash used in operating activities...........................................          (67,256)          (31,048)
                                                                                        ---------         ---------

CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from fixed-maturity investment sales...................................          174,879           176,389
Proceeds from fixed-maturity investments matured, called or prepaid.............           41,769            25,046
Proceeds from equity investment sales...........................................                0                 5
Cost of investments acquired....................................................         (146,128)         (160,631)
Change in short-term investments, net...........................................          (11,452)            8,690
Net receivable (payable) for securities.........................................            7,928           (11,522)
                                                                                        ---------         ---------
Net cash provided by investing activities.......................................           66,996            37,977
                                                                                        ---------         ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of notes payable and other borrowings.................................                0              (592)
                                                                                        ---------         ---------
Net cash used in financing activities...........................................                0              (592)
                                                                                        ---------         ---------
Net change in cash..............................................................             (260)            6,337
Cash, beginning of period.......................................................            4,667             2,029
                                                                                        ---------         ---------
Cash, end of period.............................................................        $   4,407         $   8,366
                                                                                        =========         =========

SEE ACCOMPANYING NOTES

                                                                                                                     8
</TABLE>
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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

The accompanying consolidated financial statements include the accounts and
operations of The MIIX Group, Incorporated (the "MIIX Group") and its
wholly-owned subsidiaries, MIIX Insurance Company ("MIIX"), Lawrenceville
Holdings, Inc. ("LHI"), Lawrenceville Property and Casualty Company ("LP&C"),
MIIX Insurance Company of New York ("MIIX New York") and New Jersey State
Medical Underwriters, Inc. and its wholly-owned subsidiaries ("Underwriters"),
collectively (the "Company"). The consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States for interim financial information, and in the opinion of
management, reflect all adjustments 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, 2002 which were filed with the Securities and
Exchange Commission on Form 10-K.

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

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

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

At December 31, 2002, MIIX's total adjusted capital was $18.7 million, which is
below the Mandatory Control Level. MIIX requested approval from the New Jersey
Department of Banking and Insurance ("New Jersey Department") to discount loss
and loss adjustment expense ("LAE") reserves and to merge LP&C into MIIX as of
December 31, 2002. Similarly, LP&C requested approval from the Virginia Bureau
of Insurance ("Virginia Bureau") to merge LP&C into MIIX. Pending a decision on
these requests, the New Jersey Department and the Virginia Bureau granted each
company extensions to file their respective annual statutory financial
statements. Although the merger request is currently being reviewed by both
departments, both statements have now been filed.

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

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

On May 1, 2003, MIIX entered into an Order with the New Jersey Department that
sets forth the framework for the regulatory monitoring of MIIX. The Order is
consistent with the February 19, 2003 letter agreement of the parties whereby
MIIX agreed to certain limitations on operations. The limitations, among other
things, require the approval of the New Jersey Department

                                                                               9

<PAGE>

prior to payment of dividends by the Company's insurance subsidiary, and for
lending arrangements, investments and inter-company arrangements outside of the
normal course of business, and require the Company to periodically provide
information relating to its operations and finances to the New Jersey
Department. See "Risks and Uncertainties."

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


3.  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 quarter of 2003, 1,190,982 restricted shares of The MIIX Group
common stock were granted, having a per share market value of $1.29 resulting in
an increase to unearned stock compensation of $1.5 million, a reduction to
treasury stock of $15.2 million, which was calculated using the average value
per share in treasury stock at the grant date (approximately $12.73), and a
reduction of additional paid-in capital for the difference of 13.7 million.
During the three months ended March 31, 2003, 21,549 options were cancelled, and
0 options were exercised. During the quarter ended March 31, 2003, a former
officer tendered 8,922 shares of The MIIX Group common stock and reduced the
stock purchase and loan balance to $0. All transactions were recorded at the
fair market value of The MIIX Group common stock on the effective date of the
transactions.

The following table illustrates the effect on net income and earnings per share
if the Company had applied the fair value recognition provisions of SFAS No.
123, "Accounting for Stock-Based Compensation to Stock-Based Employee
Compensation for the three months Ended March 31:

<TABLE>
<CAPTION>
                                                            2003          2002
                                                         ---------      ---------
(In thousands, except per share amounts)
----------------------------------------
<S>                                                        <C>          <C>
   Net income (loss), as reported                          $5,240       $(45,366)
   Total stock-based employee
     compensation expense determined
     under fair value based method
     for all awards, net of related
     tax effects                                              (27)           (75)
                                                           ------       --------
   Pro forma net gain (loss)                               $5,213       $(45,441)
                                                           ======       ========
   Basic earnings per share:
     As reported                                            $0.39         $(3.38)
     Pro forma                                               0.39          (3.38)
   Diluted earnings per share:
     As reported                                            $0.38         $(3.37)
     Pro forma                                               0.38          (3.37)

   Estimated weighted average of
     the fair value of options
     granted                                                $0.00          $0.00

</TABLE>

The per share weighted-average fair value of stock options was estimated at each
date of grant using a Black-Scholes option pricing model using the following
assumptions: Risk-free interest rates ranging from 1.9% to 6.8%; dividend yields
ranging from 0% to 2.7%; volatility factors of the expected market price of the
Company's common stock ranging from 38.7% to 40.6%; and a three-year weighted
average expected life of the options.

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

Basic and diluted earnings (loss) per share are computed using the
weighted-average number of common shares outstanding of 13,369,298 and
13,829,191, respectively, for the three month period ended March 31, 2003 and
13,424,695 and 13,476,709, respectively, for the three month period ended March
31, 2002.

                                                                              10

<PAGE>

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

<TABLE>
<CAPTION>
                                                                                             THREE MONTHS ENDED
                                                                                                  MARCH 31,
                                                                                          --------------------------
                                                                                             2003            2002
                                                                                          ----------      ----------
                                                                                               (in thousands)
<S>                                                                                        <C>            <C>
Numerator for basic and diluted earnings (loss) per share of common stock:
     Net income (loss) before cumulative effect of an accounting change..............       $5,240         $(42,993)

     Cumulative effect of an accounting change, net of tax...........................            0           (2,373)
                                                                                            ------         --------

     Net income (loss) ..............................................................       $5,240         $(45,366)
                                                                                            ======         ========

Denominator:
     Denominator for basic earnings (loss) per share of common stock -
          weighted-average shares outstanding........................................       13,369           13,425
Effect of dilutive securities:
     Stock options and nonvested restricted stock....................................          460               52
                                                                                            ------         --------

     Denominator for diluted earnings (loss) per share of common stock -
          adjusted-weighted average shares outstanding...............................       13,829           13,477
                                                                                            ======         ========
Basic earnings (loss) per share of common stock before cumulative effect of an
     accounting change...............................................................        $0.39           $(3.20)
Cumulative effect of an accounting change............................................         0.00            (0.18)
                                                                                             -----           ------
Basic earnings (loss) per share of common stock......................................        $0.39           $(3.38)
                                                                                             =====           ======

Diluted earnings (loss) per share of common stock before cumulative effect of an
     accounting change...............................................................        $0.38           $(3.20)
Cumulative effect of an accounting change............................................         0.00            (0.18)
                                                                                             -----           ------
Diluted earnings (loss) per share of common stock....................................        $0.38           $(3.38)
                                                                                             =====           ======
</TABLE>

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

The Company has classified its entire investment portfolio as
available-for-sale. Unrealized gains (losses) at March 31, 2003 and December 31,
2002, except those determined to be other-than temporary, are reflected as
accumulated other comprehensive income in the Consolidated Statement of Equity
and Consolidated Balance Sheets.






                                                                              11
<PAGE>

The components of comprehensive income (loss), net of related tax, for the
periods ended March 31, 2003 and 2002 are as follows:

<TABLE>
<CAPTION>
                                                                                         THREE MONTHS ENDED
                                                                                              MARCH 31,
                                                                                     ----------------------------
                                                                                        2003            2002
                                                                                     ------------    ------------
                                                                                            (in thousands)
<S>                                                                                    <C>             <C>
Net income (loss) ..............................................................       $  5,240        $ (45,366)

Other comprehensive income (loss):
  Unrealized holding depreciation arising during period (net of tax of $0 and $0,
     respectively)..............................................................         (2,782)         (12,882)

  Reclassification adjustment for losses realized in net income  (net of tax of
     $0 and $0, respectively)...................................................          2,004            1,503
                                                                                       --------        ---------

Net unrealized depreciation arising during the period ended March 31 (net of tax
  of $0 and $0, respectively)...................................................           (778)         (11,379)
                                                                                       --------        ---------

Comprehensive income (loss).....................................................       $  4,462        $ (56,745)
                                                                                       ========        =========
</TABLE>

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

The following represents the components of deferred policy acquisition costs and
the amounts that were charged to expense for the three months ended March 31,
2003 and 2002.

<TABLE>
<CAPTION>
                                                                                      THREE MONTHS ENDED
                                                                                           MARCH 31,
                                                                              ----------------------------------
                                                                                   2003                2002
                                                                              ----------------    --------------
                                                                                        (in thousands)
<S>                                                                               <C>                 <C>
Balance, beginning of period..............................................        $ 1,016             $  4,416
Cost deferred during the period...........................................             50                4,680
Amortization expense......................................................         (1,046)              (3,284)
                                                                                  -------             --------
Balance, end of period....................................................        $    20             $  5,812
                                                                                  =======             ========
</TABLE>

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

The first quarter of 2002 included a charge of approximately $2.6 million
composed primarily of severance and the write-off of remaining lease commitments
associated with the closure of the Company's offices in Dallas and Indianapolis,
and the decision to put MIIX and LP&C into runoff. No similar event occurred
during the current period ended March 31, 2003.



                                                                              12
<PAGE>

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

A reconciliation of income taxes computed based on the expected annual effective
federal statutory tax rate to total income tax expense (benefit) before the
cumulative effect of an accounting change for the periods ended March 31, 2003
and 2002 are as follows:

<TABLE>
<CAPTION>
                                                              THREE MONTHS ENDED MARCH 31,
                                       ----------------------------------------------------------------------------
                                                       2003                                   2002
                                       -------------------------------------  -------------------------------------
                                                            % OF INCOME                            % OF INCOME
                                                               BEFORE                                 BEFORE
                                          INCOME TAXES      INCOME TAXES         INCOME TAXES      INCOME TAXES
                                       ------------------- -----------------  ------------------  -----------------
                                          (in thousands)                        (in thousands)
<S>                                            <C>                <C>                <C>                <C>
Expected annual effective federal
    income tax expense (benefit)
    at 35%...........................          $ 1,173            35.0 %             $(19,045)          (35.0)%
Increase (decrease) in taxes
    resulting from:
    Valuation allowance..............           (3,015)          (89.9)%                8,334            15.3 %
    Tax-exempt interest..............                0             0.0 %                 (391)           (0.7)%
    Other............................              (46)           (1.4)%                 (319)           (0.6)%
                                               -------           -----               --------           -----
Total income tax benefit.............          $(1,888)          (56.3)%             $(11,421)          (21.0)%
                                               =======           =====               ========           =====
</TABLE>

The income tax benefit of $1.9 million for the three months ended March 31, 2003
resulted primarily from utilization of the Company's net operating loss
carryforward and a change in the valuation allowance.

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

In July, 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated
with Exit or Disposal Activities," which requires companies to recognize costs
associated with exit or disposal activities when they are incurred rather than
the current practice of recognizing those costs at the date of a commitment to
exit or disposal plan. The provisions of SFAS No. 146 are to be applied
prospectively to exit or disposal activities initiated after December 31, 2002.
Adoption of SFAS No. 146 is not expected to have a material impact on the
Company's financial condition or results of operations.

In December 2002, FASB issued SFAS No. 148, "Accounting for Stock-Based
Compensation - Transition and Disclosure." This Statement, which amends
Statement No. 123, "Accounting for Stock-Based Compensation," provides
alternative methods of transition for a voluntary change to the fair value based
method of accounting for stock-based employee compensation. In addition, it
requires more prominent and more frequent disclosures in financial statements
about the effects of stock-based compensation.

In April 2003, FASB issued SFAS No. 149, "Amendment of Statement 133 on
Derivative Instruments and Hedging Activities." This Statement amends and
clarifies financial accounting and reporting for derivative instruments and
hedging activities. The provisions of this Statement are generally effective
July 1, 2003. Adoption of SFAS No. 149 is not expected to have a material impact
on the Company's financial condition or results of operations.

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

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

                                                                              13
<PAGE>

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 carryforward. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date. A valuation allowance against deferred tax assets is recorded if
it is more likely than not, that all or some portion of the benefits related to
the deferred tax assets will not be realized. Valuation allowances are based on
estimates of taxable income and the period over which deferred tax assets will
be recoverable. In the event that actual results differ from these estimates or
these estimates are adjusted in future periods, the Company may need to
establish a valuation allowance, which would 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 March 31, 2003.

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

                                                                              14
<PAGE>

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.

RECENT DEVELOPMENTS

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

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

At December 31, 2002, MIIX's total adjusted capital was $18.7 million, which is
below the Mandatory Control Level. MIIX requested approval from the New Jersey
Department to discount loss and LAE reserves and to merge LP&C into MIIX as of
December 31, 2002. Similarly, LP&C requested approval from the Virginia Bureau
to merge LP&C into MIIX. Pending a decision on these requests, the New Jersey
Department and the Virginia Bureau granted each company extensions to file their
respective annual statutory financial statements. Although the merger request is
currently being reviewed by both departments, both statements have now been
filed.

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

                                                                              15
<PAGE>

loss and LAE reserves on a comparable economic basis. The discounting of MIIX's
reserves resulted in an increase to MIIX's statutory surplus, bringing total
surplus to $72.3 million as of December 31, 2002.

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

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

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

RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2003 COMPARED TO THE THREE MONTHS ENDED MARCH 31,
2002

NET PREMIUMS EARNED. Net premiums earned were $19.9 million for the three months
ended March 31, 2003, a decrease of approximately $17.3 million, or 46.5%, from
$37.2 million for the three months ended March 31, 2002. This net decrease
consists of a decrease in direct premiums earned of $39.1 million, partially
offset by a decrease in ceded premiums earned of $21.8 million. The decrease in
direct premiums earned reflects the Company's cessation of writing or renewing
policies during 2002. The reduction in ceded premiums earned resulted from
reduced direct earned premiums during the period as well as additional ceded
earned premiums of $13.1 million in the first quarter of 2002 associated with
adjustments made to ceded loss and LAE reserves at that time.

Total premiums written were negative $1.1 million for the three months ended
March 31, 2003, a decrease of $96.7 million, or 101.2%, from total premiums
written of $95.5 million for the three months ended March 31, 2002. The decrease
in total premiums written primarily reflects the Company's cessation of writing
or renewing policies during the second quarter of 2002. Activity in the first
quarter of 2003 included New Jersey policy cancellations of $4.5 million,
somewhat offset by tail coverage premiums written in other states of $3.2
million and other net premiums written of $0.2 million.

NET INVESTMENT INCOME. Net investment income decreased approximately $7.3
million, or 40.0%, to $10.9 million for the three months ended March 31, 2003
from $18.2 million for the same period in 2002. Average invested assets at
amortized cost decreased to approximately $1.01 billion for the three months
ended March 31, 2003 compared to approximately $1.21 billion for the same period
last year. The decrease in net investment income reflects the combined effects
of a decline in market yields, a decline in the total invested asset base and an
increase in average short-term investments held during the first quarter of 2003
as compared to first quarter 2002.

The average annualized pre-tax yield on the investment portfolio decreased to
5.6% for the three months ended March 31, 2003 from 6.03% for the same period in
2002. The decrease is primarily due to the reasons set forth above.

REALIZED INVESTMENT LOSSES. Net realized investment losses were $2.0 million for
the three months ended March 31, 2003, an increase in investment losses of
approximately $0.5 million, or 33.3%, compared to net realized investment losses
of $1.5 million for the same period in 2002. During the quarter ended March 31,
2003, the Company recorded realized gains of approximately $6.2 million
primarily due to sales of fixed maturity investments as a result of

                                                                              16
<PAGE>

modifications to the investment portfolio. During the same period, the Company
recognized approximately $8.2 million of realized losses. The realized losses
included $7.4 million related to other-than-temporary declines in investment
values of which $1.0 million was attributable to collateralized bond obligations
and $6.4 million was associated with Conseco/Green Tree Financial corporate
bonds. In the first quarter of 2002, realized gains of approximately $1.8
million were recognized due to sales of fixed maturity investments and realized
losses included $3.3 million of other-than-temporary declines in investment
values, primarily attributable to collateralized bond obligations.

OTHER REVENUE. Other revenue decreased approximately $1.2 million, or 41.8%, to
$1.6 million for the three months ended March 31, 2003 from $2.8 million for the
same period last year. This net decrease is primarily composed of a decrease of
approximately $1.0 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 in finance charge income of approximately
$1.2 million resulting from the Company's premium financing program and
increases of $0.6 million associated with management services and related
contracts with MIIX Advantage and $0.7 million in renewal rights revenue.

LOSS AND LOSS ADJUSTMENT EXPENSE (LAE). The provision for losses and LAE
decreased $64.8 million, or 79.3%, to $17.0 million for the three months ended
March 31, 2003 from $81.8 million for the three months ended March 31, 2002. The
provision for losses and LAE is net of ceded losses and LAE of $11.6 million and
$29.6 million for the three months ended March 31, 2003 and 2002, respectively.
The decrease in net loss and LAE for the three months ended March 31, 2003 was
composed of decreases in direct, assumed and ceded losses and LAE incurred of
$101.5 million, $4.5 million and $41.2 million, respectively.

UNDERWRITING EXPENSES. Underwriting expenses decreased $5.0 million, or 46.5%,
to $5.7 million for the three months ended March 31, 2003, from $10.7 million
for the three months ended March 31, 2002. The net decrease for the quarter
ended March 31, 2003 primarily results from the effects of discontinued
insurance operations, with reduced commissions, premium taxes and reductions in
compensation and benefit costs related to the restructuring and downsizing
actions which began in the first quarter of 2002. The ratio of underwriting
expenses to net premiums earned was 28.9% for the three months ended March 31,
2003 and March 31, 2002.

FUNDS HELD CHARGES. Funds held charges related to the Company's aggregate
reinsurance contracts decreased $10.7 million, or 72.0%, to $4.1 million for the
three months ended March 31, 2003 from $14.8 million for the three months ended
March 31, 2002. The decrease primarily relates to adjustments to ceded loss and
LAE reserves recorded in the first quarter of 2002 that resulted in additional
ceded premiums earned and produced $8.3 million of additional funds held charges
in that quarter. The additional decrease in the first quarter of 2003 was an
adjustment to the interest charge on the 1998 Aggregate Contract Year as
compared to first quarter 2002 due to a decrease in ceded losses.

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 $1.1 million, or 80.7%, to $0.2 million
for the three months ended March 31, 2003, from $1.3 million for the three
months ended March 31, 2002. This net decrease is primarily due to the sale of
substantially all of the assets of the Company's leasing subsidiary, Hamilton
National Leasing Corporation, effective April 30, 2002.

INCOME TAX PROVISION (BENEFIT). The income tax benefit decreased approximately
$9.5 million to a tax benefit of $1.9 million for the three months ended March
31, 2003, resulting in a (56.3)% effective tax rate, compared to an income tax
benefit of $11.4 million and an effective tax rate of (21.0)% for the same
period in 2002. The income tax benefit of $1.9 million in the first quarter of
2003 primarily reflects the utilization of the Company's net operating loss
carryforward and the change in the valuation allowance. The income tax benefit
recorded in the first quarter of 2002 occurred from recognition of a net
operating loss carryback resulting from a tax law change passed in the first
quarter of 2002.

                                                                              17
<PAGE>

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.

NET INCOME (LOSS). Net income was $5.2 million for the three months ended March
31, 2003, an increase of $50.6 million, or 111.6%, from a net loss of $45.4
million for the three months ended March 31, 2002 for the reasons discussed
above.

FINANCIAL CONDITION

CASH AND INVESTED ASSETS. Aggregate invested assets at fair value, including
cash and short-term investments, were $1,000.1 million at March 31, 2003 and
$1,061.0 million at December 31, 2002. The net decrease of $60.9 million largely
resulted from the sale of fixed-maturity investments to meet accelerating claims
settlements and was partly offset by a net increase in investment market values.

Fixed-maturity investments available for sale at fair value, including
short-term investments, were $990.5 million, or 99.5% of the investment
portfolio of the Company, as of March 31, 2003. At that date, the average credit
quality of the fixed income portfolio was "AA," as defined by an independent
rating agency, while the total portfolio effective duration (excluding
short-term investments) was 3.40 years.

UNPAID LOSSES AND LAE, REINSURANCE RECOVERABLE ON UNPAID LOSSES AND LAE AND
FUNDS HELD UNDER REINSURANCE TREATIES. Gross unpaid losses and LAE were $1,082.4
million at March 31, 2003 and $1,151.6 million at December 31, 2002. The net
decrease in unpaid losses and LAE reserves is primarily attributable to claims
paid activity. Reinsurance recoverable on unpaid losses and LAE was $405.5
million at March 31, 2003 and $457.0 million at December 31, 2002. The net
decrease in reinsurance recoverable is primarily attributable to increases in
ceded loss and LAE collection from reinsurers and a decrease in ceded loss and
LAE reserves. Substantially all of the reinsurance recoverables at March 31,
2003 are collateralized by the funds held under reinsurance treaties and letters
of credit.

EQUITY. Total equity was $45.6 million at March 31, 2003 and $41.3 million at
December 31, 2002. The net increase of $4.3 million consisted of net income of
$5.2 million, change in unrealized net depreciation of investments of $0.8
million and $0.1 million resulting in treasury stock activity associated with
net stock purchase and loan and unearned stock compensation.

LIQUIDITY AND CAPITAL RESOURCES

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

On May 3, 2002 and on May 10, 2002, the Company's business plan, which provides
for MIIX and LP&C to be placed in solvent run-off, was approved by the New
Jersey Department and the Virginia Bureau, respectively. MIIX and LP&C ceased
writing business in all states in accordance with each state's specific
withdrawal requirements. As a result, the Company expects that cash flow from
operations in the future will continue

                                                                              18
<PAGE>

to be negative, as payments of outstanding claims and expenses exceed its
revenues, primarily that are attributable to investment income. The Company also
withdrew MIIX and LP&C from the interactive rating process with A.M. Best. At
the time of the withdrawal, the companies were rated C+. The Company received
approval from the New Jersey Department for the formation and capitalization of
a 100% physician-owned insurance company, MIIX Advantage, that focuses on
insuring New Jersey physicians. MIIX Advantage began writing insurance policies
on September 1, 2002. The Company entered into a management contract and other
financial arrangements with the new company. The revenues from these agreements
and investment income will be the Company's only source of revenues in the
foreseeable future as it seeks to grow its related consulting business by
providing similar services to self-funded entities and other health care
provider owned insurers.

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 $67.3
million and $31.0 million for the three months ended March 31, 2003 and 2002,
respectively, and $180.6 million for the year ended 2002. The decrease in cash
flow during this period was primarily the result of increased loss payments,
reflecting both the maturation of the Company's expansion book of business,
acceleration of claims settlements in New Jersey and Pennsylvania, the
settlement of a few higher severity cases, lower investment income and a
decrease in premium collection reflecting the decrease in written premium.
Because of the inherent unpredictability related to the timing of the payment of
claims, it is not unusual for cash flow from operations for a medical
malpractice insurance company to vary, perhaps substantially, from year to year.
Because the Company ceased writing insurance policies, cash flow is expected to
decrease substantially. See "Risks and Uncertainties." As noted elsewhere in
this Report, the sufficiency of the Company's cash flows to sustain its
operations is dependent on a number of uncertain factors; investment income and
claims experience are among the most important of these factors.

The Company investments consist primarily of fixed-maturity securities. The
Company's current investment strategy seeks to maximize after-tax income through
a high quality, diversified, duration-sensitive, taxable bond portfolio, while
maintaining an adequate level of liquidity. The Company plans to continue this
strategy. At March 31, 2003, the portfolio has an average credit quality of "AA"
an average duration of 3.4 years, and an annualized yield of 5.6%.

The Company held collateral of $300.5 million and $332.7 million at March 31,
2003 and December 31, 2002, respectively, in the form of funds held and $161.2
million and $159.5 million at March 31, 2003 and December 31, 2002,
respectively, in the form of letters of credit, for recoverable amounts on ceded
unpaid losses and LAE under certain reinsurance contracts. Under the contracts,
and as a result of the downgrade of the Company's A.M. Best rating to below B+
during the first quarter of 2002, reinsurers requested that assets supporting
the funds withheld account be placed in trust. The Company has established the
required trust accounts in accordance with contract provisions. Under the terms
of the reinsurance contracts, the funds held are credited with interest at
contractual rates ranging from 6.0% to 8.6%, which is recorded as an expense in
the period incurred.

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

During the first quarter of 2003, 1,190,982 restricted shares of The MIIX Group
common stock were granted, having a per share market value of $1.29. During the
three months ended March 31, 2003, 21,549 options were cancelled, and 0 options
were exercised. During the quarter ended March 31, 2003, a former officer
tendered 8,922 shares of The MIIX Group common stock and reduced the stock
purchase and loan balance to $0. All transactions were recorded at the fair
market value of The MIIX Group common stock on the effective date of the
transactions.

                                                                              19
<PAGE>

RISKS AND UNCERTAINTIES

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

RISK OF INCREASED SUPERVISION. The Company recorded an adjustment of $20.5
million to net loss and LAE reserves at December 31, 2002. While the Company
remained stable during the first quarter of 2003, the effect of the December 31,
2002 reserve adjustment was to further erode MIIX's total adjusted capital to
$18.7 million, which is substantially below the Mandatory Control Level
specified in the New Jersey statutes. At the Mandatory Control Level, the
Insurance Commissioner of the New Jersey Department is authorized to place MIIX
in supervision, rehabilitation or liquidation. The New Jersey Department has
already established limitations on the operations of MIIX in a letter agreement
of February 19, 2003, as well as in an Order of May 1, 2003. The Department has
not yet indicated what, if any, additional regulating action may be taken. If
additional regulatory action is taken, it could have a material adverse efect on
the Company.

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


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

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

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

                                                                              20
<PAGE>

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.

The Company's investment portfolio at March 31, 2003 is primarily composed of
fixed-maturity securities, consisting of 72.0% of total investments at market
value. U.S. government and tax-exempt bonds represent 12.5%, corporate bonds
represent 26.1% and mortgage backed and asset backed securities represent 33.4%
of fixed-maturity investments. Short-term investments represent 27.5% of total
investments at market value and equity investments, primarily common stock,
accounts for the remaining 0.5%.

At March 31, 2003, the Company had net after-tax unrealized gains on its
fixed-maturity investment portfolio of $16.6 million. The deferred tax liability
on this amount is $1.9 million. The net after-tax unrealized gains of $16.6
million on the fixed-maturity portfolio represented 57.9% of total stockholders'
equity gross of net after-tax unrealized losses on investments. At December 31,
2002, the Company had net after-tax unrealized gains on its fixed-maturity
investment portfolio of $17.2 million.

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

In addition to interest rate risk, fixed-maturity securities like those
comprising the Company's investment portfolio involve other risks such as
default or credit risk. The Company manages this risk by limiting the amount of
higher risk 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 number of equity investments. The value of the common
stock investments is dependent upon general conditions in the securities markets
and the business and financial performance of the individual companies in the
equity portfolio. At March 31, 2003 and December 31, 2002, the cost and fair
value of equity investments was $4.8 million and $5.2 million, respectively. The
net after-tax unrealized gain of $0.4 million on the equity portfolio
represented 1.3% 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, 2002.

                                                                              21
<PAGE>

ITEM 4.  CONTROLS AND PROCEDURES

Within 90 days prior to the date of this report, and with the participation of
management, The MIIX Group's Chief Executive Officer and Chief Financial Officer
carried out an evaluation of the effectiveness of the design and operation of
The MIIX Group's disclosure controls and procedures (as defined in Securities
Exchange Act Rule 15d-14).

Based upon that evaluation, the Chief Executive Officer and Chief Financial
Officer have concluded that The MIIX Group's disclosure controls and procedures
are effective in providing them with timely material information that is
required to be disclosed in reports The MIIX Group files under Section 15(d) of
the Securities Exchange Act.

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

PART II  OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

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

Two subsequent actions by other Plan participants, one styled as a class action
on behalf of all Plan participants, were filed in the Superior Court of New
Jersey against the Company on November 7, 2000 and December 11, 2001. These
actions were stayed pending the outcome of the appeal in the first action and
the Company believes their disposition will be affected by the appellate
decision.

GLASSER V. THE MIIX GROUP, INC., ET AL. On February 5, 2003, a shareholder of
the Company instituted a putative class action in the United States District
Court for the District of New Jersey against the Company, its directors and
officers, Medical Society of New Jersey and Fox-Pitt, Kelton, Inc., which acted
as financial advisor to the Company. The complaint alleges that the Company and
its directors and officers engaged in securities fraud, breaches of fiduciary
duty and violations of New Jersey antitrust laws in connection with the MIIX
Advantage transaction and alleged misrepresentations and omissions of material
fact in various SEC filings by the Company. The complaint demands unspecified
compensatory damages, treble damages, rescission of the sale of shares in the
Company's initial public offering, attorney fees and other relief. The Company
and external counsel believe the Company has valid defenses to the plaintiff's
claims. The Company intends to vigorously defend the action.

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

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

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

                                                                              22
<PAGE>

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

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

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

          a.       Exhibits

                   Exhibit                       Exhibit
                    Number                     Description


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

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

                      15*      Acknowledgement of Independent Accountant.

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

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


                    *  Filed herewith.

In accordance with SEC Release No. 33-8212, Exhibits 99.1 and 99.2 are to be
treated as "accompanying" this report rather than "filed" as part of the report.







                                                                              23
<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:   May 15, 2003








                                                                              24
<PAGE>

                              CERTIFICATION OF THE
                             CHIEF EXECUTIVE OFFICER


I, Patricia A. Costante, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of The MIIX Group,
     Incorporated;

2.   Based on my knowledge, this quarterly report does not contain any untrue
     statement of a material fact or omit to state a material fact necessary to
     make the statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my knowledge, the financial statements, and other financial
     information included in this quarterly report, fairly present in all
     material respects the financial condition, results of operations and cash
     flows of the registrant as of, and for, the periods presented in this
     quarterly report;

4.   The registrant's other certifying officer and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a)   Designed such disclosure controls and procedures to ensure that
          material information relating to the registrant, including its
          consolidated subsidiaries, is made known to us by others within those
          entities, particularly during the period in which this quarterly
          report is being prepared;

     b)   Evaluated the effectiveness of the registrant's disclosure controls
          and procedures as of a date within 90 days prior to the filing date of
          this quarterly report (the "Evaluation Date"); and

     c)   Presented in this quarterly report our conclusions about the
          effectiveness of the disclosure controls and procedures based on our
          evaluation as of the Evaluation Date.

5.   The registrant's other certifying officer and I have disclosed, based on
     our most recent evaluation, to the registrant's auditors and the audit
     committee of the registrant's board of directors (or persons performing the
     equivalent function):

     a)   All significant deficiencies in the design or operation of internal
          controls which could adversely affect the registrant's ability to
          record, process, summarize and report financial data and have
          identified for the registrant's auditors any
         material weaknesses in internal controls; and

     b)   Any fraud, whether or not material, that involves management or other
          employees who have a significant role in the
         registrant's internal controls; and

6.   The registrant's other certifying officer and I have indicated in this
     quarterly report whether or not there were significant changes in internal
     controls or in other factors that could significantly affect internal
     controls subsequent to the date of our most recent evaluation, including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.


                                        /s/ Patricia A. Costante
                                        ----------------------------------------
                                        Chairman and Chief Executive Officer

Date: May 15, 2003

                                                                              25
<PAGE>

                              CERTIFICATION OF THE
                             CHIEF FINANCIAL OFFICER


I, Allen G. Sugerman, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of The MIIX Group,
     Incorporated;

2.   Based on my knowledge, this quarterly report does not contain any untrue
     statement of a material fact or omit to state a material fact necessary to
     make the statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my knowledge, the financial statements, and other financial
     information included in this quarterly report, fairly present in all
     material respects the financial condition, results of operations and cash
     flows of the registrant as of, and for, the periods presented in this
     quarterly report;

4.   The registrant's other certifying officer and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a)   Designed such disclosure controls and procedures to ensure that
          material information relating to the registrant, including its
          consolidated subsidiaries, is made known to us by others within those
          entities, particularly during the period in which this quarterly
          report is being prepared;

     b)   Evaluated the effectiveness of the registrant's disclosure controls
          and procedures as of a date within 90 days prior to the filing date of
          this quarterly report (the "Evaluation Date"); and

     c)   Presented in this quarterly report our conclusions about the
          effectiveness of the disclosure controls and procedures based on our
          evaluation as of the Evaluation Date.

5.   The registrant's other certifying officer and I have disclosed, based on
     our most recent evaluation, to the registrant's auditors and the audit
     committee of the registrant's board of directors (or persons performing the
     equivalent function):

     a)   All significant deficiencies in the design or operation of internal
          controls which could adversely affect the registrant's ability to
          record, process, summarize and report financial data and have
          identified for the registrant's auditors any material weaknesses in
          internal controls; and

     b)   Any fraud, whether or not material, that involves management or other
          employees who have a significant role in the registrant's internal
          controls; and

6.   The registrant's other certifying officer and I have indicated in this
     quarterly report whether or not there were significant changes in internal
     controls or in other factors that could significantly affect internal
     controls subsequent to the date of our most recent evaluation, including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

                                             /s/ Allen G. Sugerman
                                             -----------------------------------
                                             Interim Chief Financial Officer

Date: May 15, 2003

                                                                              26