<PAGE>

                   U. S. Securities and Exchange Commission
                            Washington, D.C. 20549

                                  FORM 10-QSB


(Mark One)
[X] Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of
    1934

For the quarterly period ended September 30, 1999

[_] Transition Report Pursuant to Section 13 or 15(d) of the Securities
    Exchange Act of 1934

For the transition period from __________________to ____________________________

Commission File Number:  0-25505

                               NCRIC Group, Inc.
                               -----------------
       (Exact name of small business issuer as specified in its charter)

      District of Columbia                                  52-2134774
      ---------------------                                 ----------
 (State or other jurisdiction of                          (IRS Employer
  Incorporation or organization)                       Identification No.)

 1115 30/th/ Street, NW, Washington, D.C.                     20007
 ----------------------------------------                     -----
 (Address of principal executive offices)                  (Zip Code)

                                 202-969-1866
                                 ------------
               (Issuer's telephone number, including area code)

      Check 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
past 12 months (or for such shorter period that 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

     State the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

     As of November 5, 1999, there were 3,520,855 shares of NCRIC Group, Inc.
common stock outstanding.

                                       1
<PAGE>

Table of Contents

<TABLE>
Part I - Financial Information
<S>                                                                                                <C>
         Item 1.   Condensed Consolidated Financial Statements (unaudited)
                   NCRIC Group, Inc. and Subsidiaries:
                     Condensed Consolidated Balance Sheets.................................         3
                     Condensed Consolidated Statements of Operations.......................         4
                     Condensed Consolidated Statements of Comprehensive Income.............         5
                     Condensed Consolidated Statements of Cash Flows.......................         6
                     Notes to Condensed Consolidated Financial Statements..................         7

         Item 2.   Management's Discussion and Analysis....................................        12

Part II - Other Information

         Item 2.     Changes in Securities and Use of Proceeds.............................        24

         Item 6.     Exhibits and Reports on Form 8-K......................................        25

Signatures.................................................................................        26
</TABLE>

                                       2
<PAGE>

                                   PART I FINANCIAL INFORMATION

Item 1.  Financial Statements

NCRIC GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT FOR SHARE DATA)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                  September 30, 1999         December 31, 1998
                                                                     (unaudited)
ASSETS
<S>                                                               <C>                        <C>
INVESTMENTS:
   Securities available for sale, at fair value:
       Bonds and U.S. Treasury Notes                              $         93,031           $          91,135
       Preferred stocks                                                      4,658                       5,213
                                                                  ----------------           -----------------
           Total securities available for sale                              97,689                      96,348

OTHER ASSETS:
   Cash and cash equivalents                                                 7,782                       6,083
   Reinsurance recoverable                                                  27,622                      24,944
   Goodwill                                                                  4,993                           -
   Deferred federal income taxes                                             3,051                       2,742
   Other assets                                                              7,114                       4,209
                                                                  ----------------           -----------------
TOTAL ASSETS                                                      $        148,251           $         134,326
                                                                  ================           =================
LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES:
   Losses and loss adjustment expenses:
       Losses                                                     $         61,324           $          60,127
       Loss adjustment expenses                                             27,943                      27,573
                                                                  ----------------           -----------------
           Total losses and loss adjustment expenses                        89,267                      87,700

   Other liabilities:
           Retrospective premiums accrued under
                reinsurance treaties                                         8,229                       6,492
           Unearned premiums                                                 9,664                       3,348
           Other liabilities                                                 5,031                       5,775
                                                                  ----------------           -----------------
TOTAL LIABILITIES                                                          112,191                     103,315
                                                                  ----------------           -----------------

STOCKHOLDERS' EQUITY:
   Common stock $0.01 par value - 10,000,000 shares
      authorized as of September 30, 1999, 3,742,855
      shares issued and outstanding; as of December 31,
      1998, 1,000 shares issued and outstanding                                 37                           -
   Additional paid in capital                                                9,432                         798
   Unallocated common stock held by the ESOP                                (1,036)                          -
   Unallocated common stock held by the stock award plan                      (518)                          -
   Accumulated other comprehensive income (loss)                            (1,707)                      2,016
   Retained earnings                                                        29,852                      28,197
                                                                  ----------------           -----------------
TOTAL STOCKHOLDERS' EQUITY                                                  36,060                      31,011
                                                                  ----------------           -----------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                        $        148,251           $         134,326
                                                                  ================           =================
</TABLE>

See notes to condensed consolidated financial statements.

                                       3
<PAGE>

NCRIC GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
UNAUDITED (IN THOUSANDS EXCEPT PER SHARE DATA)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                    Three Months Ended September 30,       Nine Months Ended September 30,
                                                         1999               1998                 1999               1998
<S>                                                 <C>                   <C>              <C>                 <C>
REVENUES:
  Premium income:
        Premiums written                            $      3,992          $     1,124      $     20,846        $    18,753
        Premiums ceded                                      (788)               4,022            (2,620)             3,724
        Change in unearned premiums                          722                3,349            (7,029)            (6,547)
        Renewal credit dividends to
        policyholders                                       (512)                (546)           (1,208)            (1,417)
                                                    ------------          -----------       -----------        -----------

             Net premiums earned                           3,414                7,949             9,989             14,513


  Net investment income                                    1,567                1,378             4,481              4,465

  Net realized investment gains (losses)                      45                  122              (102)               128

  Practice management and related income                   1,137                    -             3,470                  -

  Other income                                                90                   10               261                323
                                                    ------------          -----------       -----------        -----------
             Total revenues                                6,253                9,459            18,099             19,429
                                                    ------------          -----------       -----------        -----------

EXPENSES:
  Losses and loss adjustment expenses                      2,981                3,762             9,070             11,821
  Underwriting expenses                                      603                  421             2,184              2,740
  Practice management and related expenses                 1,176                  106             3,465                268
  Other                                                      403                  678             1,170              1,109
                                                    ------------          -----------       -----------        -----------
             Total expenses                                5,163                4,967            15,889             15,938
                                                    ------------          -----------       -----------        -----------

INCOME BEFORE INCOME TAXES                                 1,090                4,492             2,210              3,491

INCOME TAX PROVISION                                         315                1,523               555                969
                                                    ------------          -----------      ------------        -----------
NET INCOME                                          $        775          $     2,969      $      1,655        $     2,522
                                                    ============          ===========      ============        ===========
Net income per common share:

Basic                                               $       0.25                 N/A       $       0.66                N/A
Diluted                                             $       0.25                 N/A       $       0.65                N/A
</TABLE>

See notes to condensed consolidated financial statements.

                                       4
<PAGE>

NCRIC GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
UNAUDITED (IN THOUSANDS)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                Three Months Ended September 30,    Nine Months Ended September 30,
                                                                   1999                 1998            1999               1998
<S>                                                             <C>                    <C>          <C>                   <C>
NET INCOME                                                      $    775               $  2,969        $  1,655           $  2,522

OTHER COMPREHENSIVE INCOME:
   Unrealized holding gains (losses) on investments during
       the period                                                 (1,044)                 2,232          (5,744)             2,964
   (Tax) benefit associated with unrealized holding
       (gains) losses                                                355                   (761)          1,953             (1,008)
   Less: reclassification adjustment for (gains) losses
       included in net income                                        (45)                  (122)            102               (128)
   (Tax) benefit associated with reclassification adjustment          15                     42             (34)                44
                                                                --------               --------        --------           --------

OTHER COMPREHENSIVE INCOME (LOSS)                                   (719)                 1,391          (3,723)             1,872
                                                                --------               --------        --------           --------

COMPREHENSIVE INCOME (LOSS)                                     $     56               $  4,360        $ (2,068)          $  4,394
                                                                ========               ========        ========           ========
</TABLE>

See notes to condensed consolidated financial statements.

                                       5
<PAGE>

NCRIC GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
UNAUDITED (IN THOUSANDS)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                             Three Months Ended September 30,       Nine Months Ended September 30,
                                                                1999               1998                1999                1998
<S>                                                          <C>              <C>                   <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income                                                $      775       $   2,969              $   1,655          $   2,522
   Adjustments to reconcile net income
       to net cash flows from operating activities:
            Net realized investment (gains) loss                    (45)           (122)                   102               (128)
            Amortization and depreciation                           234              57                    487                168
            Deferred federal income taxes                         1,471            (123)                 1,384               (799)
            Changes in assets and liabilities:
                 Reinsurance recoverable                           (782)          2,892                 (2,678)            (3,271)
                 Other assets                                       557             373                 (2,484)               198
                 Losses and loss adjustment expenses                151          (1,362)                 1,567              7,194
                 Retrospective premiums accrued under
                    reinsurance treaties                           (637)         (5,854)                 1,737             (6,041)
                 Unearned premiums                                 (266)         (2,288)                 6,316              6,547
                 Other liabilities                                 (803)          2,206                   (629)             2,003
                                                             ----------       ---------              ---------          ---------
                 Net cash flows from operating activities           655          (1,252)                 7,457              8,393
                                                             ----------       ---------              ---------          ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchases of investments                                     (29,149)        (10,854)               (67,796)           (53,801)
   Sales, maturities and redemptions of investments              28,510           9,676                 60,694             47,240
   Investment in purchased business                                   -               -                 (5,238)                 -
   Purchases of property and equipment                             (138)           (167)                  (235)              (738)
                                                             ----------       ---------              ---------          ---------

                 Net cash flows from investing activities          (777)         (1,345)               (12,575)            (7,299)
                                                             ----------       ---------              ---------          ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Net proceeds from the issuance of common stock                 6,817               -                  6,817                  -
   Proceeds from debt                                                 -               -                  2,200                  -
   Repayment of debt                                             (2,200)              -                 (2,200)                 -
                                                             ----------       ---------              ---------          ---------

                 Net cash flows from financing activities         4,617               -                  6,817                  -
                                                             ----------       ---------              ---------          ---------

NET CHANGE IN CASH AND CASH EQUIVALENTS                           4,495          (2,597)                 1,699              1,094
                                                             ----------       ---------              ---------          ---------

CASH AND CASH EQUIVALENTS,
   BEGINNING OF PERIOD                                            3,287           7,756                  6,083              4,065
                                                             ----------       ---------              ---------          ---------

CASH AND CASH EQUIVALENTS,
   END OF PERIOD                                             $    7,782       $   5,159              $   7,782          $   5,159
                                                             ==========       =========              =========          =========

SUPPLEMENTARY INFORMATION:
   Interest paid                                             $       28       $       -              $     120          $       -
                                                             ==========       =========              =========          =========
</TABLE>

See notes to condensed consolidated financial statements.

                                       6
<PAGE>

NCRIC GROUP, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements - unaudited

1.   Basis of Preparation

     The accompanying unaudited consolidated financial statements were prepared
     in accordance with instructions to Form 10-QSB and therefore do not include
     all disclosures necessary for a complete presentation under generally
     accepted accounting principles. In the opinion of management, all
     adjustments, consisting of normal recurring adjustments, considered
     necessary for a fair presentation have been included.

     Operating results for the nine-month period ended September 30, 1999 are
     not necessarily indicative of the results that may be expected for the year
     ending December 31, 1999. These consolidated financial statements and notes
     should be read in conjunction with the financial statements and notes
     included in the audited consolidated financial statements of NCRIC Group,
     Inc. (NCRIC Group) for the year ended December 31, 1998, which were filed
     with the Securities and Exchange Commission on Form SB-2.

2.   Acquisition

     On January 4, 1999, NCRIC Group acquired all of the outstanding shares of
     HealthCare Consulting, Inc., all of the outstanding interests of HCI
     Ventures, LLC, and all the assets of Employee Benefits Services, Inc. for
     $5.1 million in cash and mandatorily convertible notes in the aggregate
     principal amount of $300,000. The notes were converted to 42,855 shares of
     common stock upon completion of the initial public offering described in
     Note 3. Under terms of the purchase agreement, an additional $3.1 million
     could be paid in cash if the acquired companies achieve earnings targets in
     2000, 2001 and 2002. These companies provide practice management, employee
     benefit services and financial services to physicians throughout the
     Mid-Atlantic region.

     The acquisition has been accounted for using the purchase method. Goodwill
     is amortized over 20 years on a straight-line basis. The contingent payment
     would be an addition to goodwill and would be amortized over 20 years.

     In connection with the acquisition, NCRIC Group borrowed $2.2 million from
     Sequoia National Bank to finance a portion of the purchase price. The loan
     was repaid in full on July 29, 1999 from proceeds of the stock offering.
     The term of the loan was 7.5 years and the interest rate was prime plus
     0.75% per annum, with an additional one-half point paid at closing. Monthly
     payments were interest only for the first six months and blended payments
     of interest and principal thereafter. Security for the loan consisted of an
     assignment of the capital stock of NCRIC MSO, Inc., a subsidiary of NCRIC
     Group, and a blanket lien of all of the receivables of HealthCare
     Consulting and Employee Benefits Services. There was no penalty for
     prepayment of the loan. The President of Sequoia National Bank serves on
     NCRIC Group's Board of Directors.

                                       7
<PAGE>

     The following pro forma information presents the results of operations for
     the nine months ended September 30, 1998 as though the acquisition had
     occurred at January 1, 1998 (in thousands):

<TABLE>
<CAPTION>
                                           NCRIC    Acquired   Pro forma
                                           Group    Companies  Combined
                                           -------  ---------  ---------
           <S>                             <C>      <C>        <C>
             Revenue..................     $19,429  $3,511     $22,940
             Net income ..............       2,522     215       2,737
</TABLE>

3.   Initial Public Offering

     The Form SB-2 Registration Statement for NCRIC Group common stock was
     declared effective by the Securities and Exchange Commission on May 10,
     1999. Sales of the stock concluded on July 19, 1999 and the offering closed
     on July 29, 1999 for a total offering of 1,480,000 shares with net proceeds
     of $8.4 million. The reconciliation of gross to net proceeds is as follows
     (in thousands):

<TABLE>
           <S>                                         <C>
           Gross offering proceeds                     $10,360
           Less offering expenses                       (1,989)
                                                       -------
              Net proceeds                               8,371
           Less: ESOP loan                              (1,036)
                 Stock Award Plan loan                    (518)
                                                       -------
           Net proceeds, as adjusted                   $ 6,817
                                                       =======

           The composition of outstanding shares is as follows (in thousands):

           Issued in initial public offering             1,480
           Issued to NCRIC Holdings                      2,220
                                                       -------
                                                         3,700
           Issued for exchange of convertible notes         43
                                                       -------
              Total shares issued July 29, 1999          3,743

           ESOP loan shares                               (148)
           Stock Award Plan loan shares                    (74)
                                                       -------
              Net shares outstanding                     3,521
                                                       =======
</TABLE>

4.   Reportable Segment Information

     NCRIC Group has two reportable segments: Insurance and practice management
     and financial services. The insurance segment provides medical professional
     liability and other insurance. The practice management and financial
     services segment provides practice management and financial services
     primarily to physicians. NCRIC Group evaluates performance based on profit
     or loss from operations before income taxes. The reportable segments are
     strategic business units that offer different products and services and
     therefore are managed separately.

                                       8
<PAGE>

     Selected financial data is presented below for each business segment for
     the three-month and nine-month periods ended September 30, 1999 and 1998
     (in thousands):

<TABLE>
<CAPTION>
                                                                   For the                       At or For the
                                                      Three Months Ended September 30,   Nine Months Ended September 30,
                                                      --------------------------------   -------------------------------
                                                        1999                 1998           1999                  1998
                                                      -------               -------      ----------             -------
     <S>                                              <C>                   <C>          <C>                    <C>
     Insurance:
     Revenues from external customers                 $ 3,243               $ 7,958      $    9,989             $ 14,824
     Net investment income                              1,552                 1,378           4,566                4,465
     Net realized investment gains (losses)                45                   122            (102)                 128
     Depreciation and amortization                         83                    57             167                  158
     Segment profit before taxes                        1,440                 4,460           3,198                3,730
     Expenditures for segment assets                      136                    16             186                  540
     Segment assets                                                                         141,276              135,757
     Segment liabilities                                                                    111,385              103,748

     Practice Management and Financial Services:
     Revenues from external customers                 $ 1,139               $     1      $    3,474             $     12
     Net investment income                                 11                     -              32                    -
     Net realized investment gains                          -                     -               -                    -
     Depreciation and amortization                        151                     -             320                   10
     Segment profit (loss) before taxes                  (183)                   32            (494)                (239)
     Expenditures for segment assets                        2                   151              49                  198
     Segment assets                                                                           6,654                  289
     Segment liabilities                                                                      1,294                  418

     Total:
     Revenues from external customers                 $ 4,382               $ 7,959      $   13,463             $ 14,836
     Net investment income                              1,563                 1,378           4,598                4,465
     Net realized investment gains (losses)                45                   122            (102)                 128
     Depreciation and amortization                        234                    57             487                  168
     Segment profit before taxes                        1,257                 4,492           2,704                3,491
     Expenditures for segment assets                      138                   167             235                  738
     Segment assets                                                                         147,930              136,046
     Segment liabilities                                                                    112,679              104,166
</TABLE>

     The following are reconciliations of reportable segment assets, liabilities
     and profit to NCRIC Group's consolidated totals:

<TABLE>
<CAPTION>
                                                                                    September 30,
                                                                           ---------------------------
                                                                           1999                   1998
                                                                           ----                   ----
                                                                                 (in thousands)
     <S>                                                                   <C>               <C>
     Assets:
        Total assets for reportable segments                               $147,930          $ 136,046
        Elimination of intersegment receivables                                (771)              (196)
        Elimination of affiliate receivables                                   (659)                 -
        Other unallocated amounts                                             1,751                  -
                                                                           --------          ---------
        Consolidated total                                                 $148,251          $ 135,850
                                                                           ========          =========
</TABLE>

                                       9
<PAGE>

<TABLE>
     <S>                                                                      <C>                <C>
     Liabilities:
          Total liabilities for reportable segments                           $112,679           $104,166
          Elimination of intersegment payables                                    (771)              (196)
          Other liabilities                                                        283                  -
                                                                              --------           --------
          Consolidated total                                                  $112,191           $103,970
                                                                              ========           ========
</TABLE>

<TABLE>
<CAPTION>

                                                         Three Months Ended September 30,  Nine Months Ended September 30,
                                                         --------------------------------  -------------------------------
                                                                1999            1998           1999               1998
                                                                ----            ----           ----               ----
     <S>                                                    <C>              <C>            <C>                <C>
     Profit before taxes:
     Total profit for reportable segments                   $  1,257         $  4,492       $  2,704           $  3,491
          Other expenses                                        (147)              -            (353)                -
          Elimination of intersegment interest income          (  20)              -            (141)                -
                                                            --------         --------       --------           --------
          Consolidated total                                $  1,090         $  4,492       $  2,210           $  3,491
                                                            ========         ========       ========           ========
</TABLE>

5.   Earnings per Share

     The following table sets forth the computation of basic and diluted
     earnings per share for the periods ended September 30, 1999. Earnings per
     share data is not presented for 1998 because there were no shares
     outstanding (in thousands except per share data):

<TABLE>
<CAPTION>
                                           For the periods ending September 30, 1999
                                           -----------------------------------------
                                           Three months                  Nine months
                                           ------------                  -----------
       <S>                                 <C>                           <C>
       Net income                          $     775                      $    1,655
                                           =========                      ==========

       Weighted average common
         shares outstanding - basic            3,125                           2,525
       Dilutive effect of stock options            7                               2
                                           ---------                      ----------

       Weighted average common
         shares outstanding - diluted          3,132                           2,527
                                           =========                      ==========

       Net income per common share:

       Basic                               $    0.25                      $     0.66
                                           =========                      ==========

       Diluted                             $    0.25                      $     0.65
                                           =========                      ==========
</TABLE>

     Earnings per share is calculated by dividing the net income by the weighted
     average shares outstanding for the period. The calculation of weighted
     average shares outstanding includes 2,220,000 shares for the period from
     January 1, 1999 through July 28, 1999 and the total of 3,520,855
     outstanding shares, as described in Note 3 above, for the period from July
     29, 1999 through September 30, 1999. Had the calculation been made using
     3,520,855 as the weighted average outstanding shares for both periods, that
     is as if the stock offered in the initial public offering had been
     outstanding on January 1, 1999, basic earnings per share would have been
     $0.22 and $0.47 for the quarter and nine months ended September 30, 1999,
     respectively.

                                      10
<PAGE>

6.   Stock option plan

     NCRIC Group has a stock option plan for directors and officers of NCRIC, A
     Mutual Holding Company and its subsidiaries. Options for common stock in an
     aggregate amount of 74,000 shares were granted at July 29, 1999. The
     options have terms of 10 years and an exercise price of $7 per share, the
     fair market value of the common stock at the date of grant. The options
     will become first exercisable at a rate of 33-1/3% at the end of each 12
     months of service with NCRIC Group or its subsidiaries after the date of
     grant.

     For options awarded to employees, NCRIC Group accounts for compensation
     cost using the intrinsic value based method prescribed by APB Opinion No.
     25, "Accounting for Stock Issued to Employees". Accordingly, no
     compensation expense was recognized since the stock options granted to
     employees were at an exercise price equal to the fair market value of the
     common stock on the date the options were granted.

     For options awarded to non-employee directors, NCRIC Group accounts for
     compensation cost using the fair value method of accounting for stock
     options defined in SFAS No. 123.

7.   Employee stock ownership plan

     NCRIC Group has an ESOP for eligible employees. As part of the stock
     offering, the ESOP borrowed $1.0 million from NCRIC Group to purchase
     148,000 shares which are held in a trust account for allocation among
     participants as the loan is repaid. For shares allocated to the accounts of
     the ESOP participants as the result of payments made to reduce the ESOP
     loan, the compensation charge is based upon the then-current fair value of
     the shares. The first loan repayment is scheduled to be made December 31,
     1999.

8.   Stock award plan

     NCRIC Group has a stock award plan under which directors, officers and
     employees of NCRIC, A Mutual Holding Company and its subsidiaries would be
     awarded common stock. As a part of the stock offering, the stock award plan
     borrowed $518,000 from NCRIC Group to purchase 74,000 shares which are held
     in a trust account for allocation among participants as the loan is repaid.
     For shares awarded, compensation cost is measured based upon the fair value
     of the shares on the date of the award. The first loan repayment is
     scheduled to be made December 31, 1999.

                                      11
<PAGE>

Item 2. Management's Discussion and Analysis of Results of Operations and
Financial Condition

     The following analysis of the consolidated results of operations and
financial condition of NCRIC Group should be read in conjunction with the
consolidated financial statements and related notes included in this Form 10-
QSB. References to "NCRIC" mean NCRIC Group and its subsidiaries, including
their predecessors.

                                    General

     The financial statements have been prepared in accordance with generally
accepted accounting principles, GAAP, unless otherwise noted. GAAP differs from
statutory accounting practices used by regulatory authorities in their oversight
responsibilities of insurance companies.

     On January 4, 1999 NCRIC Group acquired all the outstanding shares of
HealthCare Consulting, Inc., the interests of HCI Ventures, LLC and the assets
of Employee Benefits Services, Inc. The acquisition was recorded as a purchase.
The results of operations for the nine months ended September 30, 1999 include
the results of the acquired businesses for that period.

          Consolidated net income and comprehensive income results -
 Three months ended September 30, 1999 compared to three months ended September
                                  30, 1998 and
nine months ended September 30, 1999 compared to nine months ended September 30,
                                      1998


Three months ended September 30, 1999 compared to three months ended September
30, 1998

     Net income of $775,000 for the three months ended September 30, 1999 is
down $2.2 million from $3.0 million for the three months ended September 30,
1998. The primary contributor to the decreased earnings was an increase in
reinsurance costs due to a $4.9 million reduction in 1999 compared to 1998
favorable prior years development on reinsured losses. Excluding this
reinsurance premium change, net underwriting results for the three months were
improved and partially offset by legal fees incurred for litigation brought by
the NCRIC Physicians Organization, continuing start-up costs for the NCRIC MSO
District of Columbia operations and interest expense on acquisition debt.

     Comprehensive income was $56,000 for the three months ended September 30,
1999 compared to $4.4 million for the three months ended September 30, 1998. In
addition to the decrease in net income, the decrease in comprehensive income
results from the decline in unrealized investment gains, net of deferred income
taxes.

Nine months ended September 30, 1999 compared to nine months ended September 30,
1998

     Net income totaled $1.7 million for the nine months ended September 30,
1999, down $867,000 from $2.5 million for the nine months ended September 30,
1998. The primary cause of the decreased earnings was the $6.5 million increase
in reinsurance costs due to the reduction in 1999 compared to 1998 favorable
prior year loss development under the swing rated treaty.

                                      12
<PAGE>

Excluding this reinsurance premium change, net underwriting results improved and
were partially offset by continuing start-up costs for the NCRIC MSO District of
Columbia operations, interest expense on acquisition debt and legal fees
incurred for litigation brought by the NCRIC Physicians Organization. This
litigation was settled in August with terms including a guarantee of a minimum
payment to the NCRIC Physicians Organization of $6,000 per month for 60 months.

     Comprehensive income was a loss of $2.1 million for the nine months ended
September 30, 1999 compared to a gain of $4.4 million for the nine months ended
September 30, 1998.  The decrease in comprehensive income primarily results from
the decline in unrealized investment gains, net of deferred income taxes.

                              Net Premiums Earned

Following is a summary of NCRIC's net premiums earned:

<TABLE>
<CAPTION>
                                        Three Months Ended September 30,       Nine Months Ended September 30,
                                        ---------------------------------      --------------------------------
                                          1999                     1998          1999                     1998
                                          ----                     ----          ----                     ----
                                                  (in thousands)                         (in thousands)
<S>                                     <C>                       <C>          <C>                      <C>
Gross premiums written................    $3,992                  $1,124        $20,846                 $18,753
Change in unearned premiums...........       722                   3,349         (7,029)                 (6,547)
                                          ------                  ------        -------
Gross premiums earned before
  renewal credits.....................     4,714                   4,473         13,817                  12,206
Reinsurance premiums ceded............     ( 788)                  4,022         (2,620)                  3,724
                                          ------                  ------        -------                 -------
Net premiums earned before
  renewal credits.....................     3,926                   8,495         11,197                  15,930
Renewal credits.......................      (512)                   (546)        (1,208)                 (1,417)
                                          ------                  ------        -------                 -------
Net premiums earned...................    $3,414                  $7,949        $ 9,989                 $14,513
                                          ======                  ======        =======                 =======
</TABLE>

Three months ended September 30, 1999 compared to three months ended September
30, 1998

     Gross premiums written increased by $2.9 million to $4.0 million for the
three months ended September 30, 1999 from $1.1 million for the three months
ended September 30, 1998. Premiums written increased approximately $1.5 million
for the three months ended September 30, 1999 due to the staggering of premium
writing dates in 1999, plus approximately $1.4 million for net new business
written.

     The change in unearned premiums for the period decreased by $2.6 million to
$0.7 million from $3.3 million.  This decrease resulted from a $3.0 million
change in the unearned portion of the policy premiums due to the staggering of
renewal dates and new business written, offset by a $380,000 decrease in
retrospectively determined policyholder refunds for 1999 due to higher loss
experience in the experience-rated programs.

     Gross premiums earned before renewal credits increased $241,000, or 5%, to
$4.7 million for the three months ended September 30, 1999 from $4.5 million for
the three months ended September 30, 1998.  The increase was primarily due to
additional premiums earned under experience-rated programs.

                                      13
<PAGE>

     Reinsurance premiums ceded increased by $4.8 million to $0.8 million for
the three months ended September 30, 1999 from a credit of $4.0 million for the
three months ended September 30, 1998.  The increase was primarily attributable
to reinsurance premiums related to prior years under the swing rated treaty
which were reduced by $0.9 million in the three months ended September 30, 1999
and $5.8 million in the three months ended September 30, 1998 due to favorable
loss development of reinsured losses compared to prior estimates by NCRIC,
partially offset by increased current year reinsurance expense.

     Renewal credits decreased $34,000 to $512,000 for the three months ended
September 30, 1999 from $546,000 for the three months ended September 30, 1998
reflecting a decrease in the credit rate on eligible policies to 10% from 12.5%.

     Net premiums earned before renewal credits decreased by $4.6 million to
$3.9 million for the three months ended September 30, 1999 from $8.5 million for
the three months ended September 30, 1998. Net premiums earned after renewal
credits decreased similarly by $4.5 million to $3.4 million for the three months
ended September 30, 1999 from $7.9 million for the three months ended September
30, 1998. The decreases reflect the lower reinsurance ceded favorable prior year
development in the third quarter of 1999 compared to the third quarter of 1998,
partially offset by the increase in gross earned premiums.

Nine months ended September 30, 1999 compared to nine months ended September 30,
1998

     Gross premiums written increased by $2.0 million to $20.8 million for the
nine months ended September 30, 1999 from $18.8 million for the nine months
ended September 30, 1998. Starting in the fourth quarter of 1997 and continuing
into 1999, NCRIC began to stagger policy renewal dates. Premiums written
increased $1.6 million for the nine months ended September 30, 1999 and
increased $1.2 million for the nine months ended September 30, 1998 due to the
staggering of premium writing dates. There is a one-time effect when the policy
renewal is staggered which increases premiums written in the period of the new
renewal date and reduces premiums written in the subsequent period corresponding
to the original renewal date; premiums written will, all else being equal,
return to the previous level in the subsequent calendar year. While the
staggering of the renewal dates affects premiums written, earned premiums are
not affected. The gross premiums written include premiums for experience-rated
programs of $635,000 for the nine months ended September 30, 1999 and $701,000
for the nine months ended September 30, 1998.

     Gross premiums written adjusted for the staggering of renewal dates and
experience-rated premiums increased $1.7 million, to $18.6 million for the nine
months ended September 30, 1999 from $16.9 million for the nine months ended
September 30, 1998.  The increase results from net new business written. The
number of policyholders increased to 1,452 at September 30, 1999, up from 1,302
at September 30, 1998, offset by a change in the mix of business in new policies
written.

     The change in unearned premiums for the period increased by $0.5 million to
$7.0 million for the nine months ended September 30, 1999 from $6.5 million for
the nine months ended September 30, 1998. This increase resulted from a $2.2
million change due the staggering of renewal dates and new business written
offset by a $1.7 million decrease in retrospectively

                                       14
<PAGE>

determined policyholder refunds for 1999 due to higher loss experience in the
experience-rated programs.

     Gross premiums earned before renewal credits increased $1.6 million, or
13%, to $13.8 million for the nine months ended September 30, 1999 from $12.2
million for the nine months ended September 30, 1998. The increase was primarily
due to $1.7 million of additional premiums earned under experience-rated
programs.

     Reinsurance premiums ceded increased by $6.3 million to $2.6 million for
the nine months ended September 30, 1999 from a credit of $3.7 million for the
nine months ended September 30, 1998. Reinsurance premiums are affected by
current year premiums payable to the reinsurers as well as retrospective
adjustments to accruals for prior years premiums. The increase was the result of
a decrease in the credit from prior years premiums under the swing rated
reinsurance treaty due to favorable loss experience.

     Reinsurance premiums related to prior years under the swing rated treaty
were reduced by $1.9 million in the nine months ended September 30, 1999 and
$8.4 million in the nine months ended September 30, 1998 due to favorable loss
development of reinsured losses compared to prior estimates by NCRIC.  The 1999
change is primarily reflective of the favorable loss development for the 1992
through 1996 loss years. The 1998 change is primarily reflective of the
favorable loss development for the 1993 through 1995 loss years.

     Renewal credits decreased $209,000 to $1.2 million for the nine months
ended September 30, 1999 from $1.4 million for the nine months ended September
30, 1998 reflecting a decrease in the credit rate on eligible policies to 10%
from 12.5%.

     Net premiums earned before renewal credits decreased by $4.7 million to
$11.2 million for the nine months ended September 30, 1999 from $15.9 million
for the nine months ended September 30, 1998.  Net premiums earned after renewal
credits decreased by $4.5 million to $10.0 million for the nine months ended
September 30, 1999 compared to $14.5 million for the nine months ended September
30, 1998. The decreases primarily reflect the increase in reinsurance ceded
premiums related to favorable prior years development.



                             Net investment income

Three months ended September 30, 1999 compared to three months ended September
30, 1998

     Net investment income increased by $189,000 for the three months ended
September 30, 1999  compared to the third quarter of the prior year due to an
increase in yields partially offset by a decrease in invested funds. The average
effective yield was approximately 5.94% for the three months ended September 30,
1999 and 5.11% for the three months ended September 30, 1998.  The tax
equivalent yield was approximately 6.37% for the third quarter of 1999 and 5.47%
for the third quarter of 1998. The increase in investment yields reflects the
market increase in interest rates in the third quarter of 1999 compared to the
third quarter of 1998.

                                       15
<PAGE>

Nine months ended September 30, 1999 compared to nine months ended September 30,
1998

     Net investment income at $4.5 million was essentially unchanged for the
nine months ended September 30, 1999 compared to the first nine months of the
prior year due to the level of investment yields. Average invested assets, which
include cash equivalents, were maintained at essentially the same level in both
periods. Maturing investments were primarily invested in corporate bonds and
asset-backed securities. $2.9 million of funds were used in the January 4, 1999
acquisition of the businesses of HealthCare Consulting, HCI Ventures and
Employee Benefit Services. The average effective yield was approximately 5.65%
for the nine months ended September 30, 1999 and 5.61% for the nine months ended
September 30, 1998. The tax equivalent yield was approximately 6.15% for the
nine months ended September 30, 1999 and 6.18% for the nine months ended
September 30, 1998. The change in investment yields is reflective of the market
change in interest rates in 1999 compared to 1998.

                    Practice management and related revenue

     Practice management and related revenue of $1.1 million for the three
months ended September 30, 1999 and $3.5 million for the nine months ended
September 30, 1999 consisted of fees generated by NCRIC MSO through the
businesses acquired on January 4, 1999, HealthCare Consulting and Employee
Benefits Services.  These fees through September 30, 1999 are for practice
management services (38%), accounting services (30%), tax and personal
financial planning (11%), retirement plan accounting and administration (13%),
and other services (8%).


                    Net realized investment gains (losses)

     Net realized investment gains were $45,000 for the three months ended
September 30, 1999 compared to $122,000 for the three months ended September 30,
1998.  For the nine months ended September 30, 1999 net realized losses were
$102,000 compared to net realized gains of $128,000 for the nine months ended
September 30, 1998.  Realized gains and losses in 1999 were primarily from the
sale of mortgaged-backed and tax exempt securities.  1998 realized gains and
losses were primarily from the sale of corporate bonds.

         Loss and loss adjustment expenses and combined ratio results

     The expense for incurred losses and LAE net of reinsurance is summarized as
follows:

<TABLE>
<CAPTION>
                                                      Three Months Ended September 30,    Nine Months Ended September 30,
                                                     --------------------------------    -------------------------------
                                                         1999              1998               1999             1998
                                                         ----              ----               ----             ----
                                                             (in thousands)                      (in thousands)
<S>                                                  <C>                  <C>            <C>                  <C>
Incurred loss and LAE related to:
     Current year - losses ........................     $ 4,407           $ 3,158           $15,143           $12,653
     Prior years - development.....................      (1,426)              604            (6,073)             (832)
                                                        -------           -------           -------           -------
Total incurred for the period......................     $ 2,981           $ 3,762           $ 9,070           $11,821
 </TABLE>

                                       16
<PAGE>

     Following is a summary of the ratios of losses and underwriting expenses
compared to net premiums:

                                                 Nine Months Ended September 30,
                                                 -------------------------------
                                                       1999        1998
                                                       ----        ----
GAAP Underwriting ratios:
     Loss and LAE ratio                                 90.8%      81.5%
     Underwriting expense ratio                         21.9%      18.9%
     Combined ratio after renewal credits              112.7%     100.4%
     Combined ratio before renewal credits             100.5%      89.5%

Statutory data:
     Loss and LAE ratio                                 81.0%      81.7%
     Underwriting expense ratio                         12.0%      10.9%
     Combined ratio                                     93.0%      92.6%


Three months ended September 30, 1999 compared to three months ended September
30, 1998

     Total incurred loss and LAE expense of $ 3.0 million for the third quarter
of 1999 is down $0.8 million from the $3.8 million incurred for the third
quarter of 1998.

     Current year losses in the three months ended September 30, 1999 totaled
$4.4 million, up $1.2 million compared to the three months ended September 30,
1998. The number of claims reported in the third quarter of 1999 were higher
than in the third quarter of 1998.  NCRIC experienced favorable development on
estimated losses for prior years' claims in the third quarter of 1999 compared
to adverse development experienced in the third quarter of 1998.  The loss
development related to prior years claims was a credit of $1.4 million in the
third quarter of 1999 and a charge of $0.6 million in the third quarter of 1998.
Prior year development results from the re-estimation and settlement of
individual losses not covered by reinsurance, which are generally losses under
$500,000.


Nine months ended September 30, 1999 compared to nine months ended September 30,
1998

     Total incurred loss and LAE for the first nine months of 1999 of $9.1
million is down $2.7 million from $11.8 million for the first nine months of
1998.

     Current year losses in the nine months ended September 30, 1999 totaled
$15.1 million, up $2.4 million from $12.7 million for the nine months ended
September 30, 1998. More new claims were reported in the first nine months of
1999 than in the first nine months of 1998 but less than the level reported for
the first nine months of 1997. NCRIC experienced favorable development on
estimated losses for prior years in the first nine months of both years. The
favorable loss development related to prior years claims was $6.1 million in the
first three quarters of 1999 and $0.8 million in the first three quarters of
1998.

                                       17
<PAGE>

     The GAAP combined ratio before renewal credits increased to 100.5% for the
nine months ended September 30, 1999 from 89.5% for the nine months ended
September 30, 1998.  The reinsurance ceded development related to prior years
claims resulted in the increase in the loss and LAE ratio and underwriting
expense ratio.

     The GAAP combined ratio after renewal credits for the nine months ended
September 30, 1999 of 112.7% increased from the combined ratio for the nine
months ended September 30, 1998 of 100.4% due to the change in reinsurance ceded
prior year development described above.


                             Underwriting expenses

Three months ended September 30, 1999 compared to three months ended September
30, 1998

     Underwriting expenses increased $182,000 to $603,000 for the three months
ended September 30, 1999 from $421,000 for the three months ended September 30,
1998.  The increase in expense was due primarily to increased employment related
costs and consultant fees.

Nine months ended September 30, 1999 compared to nine months ended September 30,
1998

     Underwriting expenses decreased $556,000 to $2.2 million for the nine
months ended September 30, 1999 from $2.7 million for the nine months ended
September 30, 1998. The decrease in expense was due primarily to a decrease of
$82,000 in premium taxes related to the decrease in gross written premiums and a
reduction in the premium tax rate, a decrease of $171,000 in guaranty fund
assessments and a decrease of $314,000 in directors fees as a result of the
reorganization, partially offset by increased consultant fees.

                   Practice management and related expenses

     Practice management and related expenses of $1.2 million for the three
months ended September 30, 1999 and $3.5 million for the nine months ended
September 30, 1999 consisted primarily of expenses, such as salaries, other
general office expenses and goodwill amortization related to NCRIC MSO for the
operations of the businesses acquired January 4, 1999.

                                Other expenses

     Other expenses include amounts for subsidiary and holding company
operations which are not directly related to the issuance of medical
professional liability insurance or practice management and related operations,
including insurance brokerage, insurance agency and physician services.

Three months ended September 30, 1999 compared to three months ended September
30, 1998

     Other expenses decreased $275,000 to $403,000 for the three months ended
September 30, 1999 from $678,000 for the three months ended September 30, 1998.
The primary component of the decrease was  $368,000 in expenses incurred in 1998
in connection with the reorganization partially

                                       18
<PAGE>

offset by legal fees of $128,000 incurred in 1999 in connection with litigation
brought by NCRIC Physicians Organization.

Nine months ended September 30, 1999 compared to nine months ended September 30,
1998

     Other expenses increased $61,000 to $1.2 million for the nine months ended
September 30, 1999 from $1.1 million for the nine months ended September 30,
1998.  The primary components of the increase were legal fees of $441,000
incurred in connection with litigation brought by NCRIC Physicians Organization
and interest on acquisition debt of $120,000 offset by a decrease of $493,000 in
expenses in connection with the 1998 reorganization.

                             Federal income taxes

     The effective tax rate for NCRIC is lower than the federal statutory rate
principally due to nontaxable investment income.

<TABLE>
<CAPTION>
                                            Three Months Ended September 30,   Nine Months Ended September 30,
                                            -------------------------------    -------------------------------
                                              1999                 1998           1999                1998
                                              ----                 ----           ----                ----
<S>                                         <C>                    <C>         <C>                    <C>
Federal income tax at statutory rates...        34%                  34%             34%                34%
Tax exempt income.......................        (5)                  (1)             (9)                (7)
Dividends received......................        (2)                   -              (3)                (1)
Reorganization costs....................         -                    2               -                  4
Goodwill amortization...................         2                    -               3                  -
Other, net..............................         -                   (1)              -                 (2)
                                               ---                  ---             ---                ---
Federal income tax at effective rates...        29%                  34%             25%                28%
                                               ---                  ---             ---                ---
</TABLE>



              Financial condition, liquidity and capital resources

NCRIC Group

     Financial condition and capital resources.  NCRIC Group is a stock holding
company whose operations and assets primarily consist of its ownership of NCRIC,
Inc. and NCRIC MSO.  In addition, as a result of the reorganization, NCRIC Group
has greater access to the capital markets.  This allows NCRIC Group to assist
its subsidiaries in their efforts to compete effectively and to create long-term
growth.  As a part of this strategy, NCRIC Group may seek to take advantage of
acquisition opportunities and alternative financing.

     On January 4, 1999, Sequoia National Bank approved a loan to NCRIC Group in
the amount of $2,200,000 at an annual interest rate of prime + 3/4 of a
percentage point to finance the acquisition of HealthCare Consulting, Inc., HCI
Ventures, LLC and the assets of Employee Benefits Services, Inc.  On July 29,
1999 the loan was repaid from the proceeds of the issuance of common stock.

     Liquidity.  Liquidity is a measure of an entity's ability to secure enough
cash to meet its contractual obligations and operating needs.  NCRIC Group's
cash flow from operations consists of dividends from subsidiaries, if declared
and paid, and other permissible payments from its

                                       19
<PAGE>

subsidiaries, offset by fees paid to NCRIC, Inc. for management services and
other expenses. NCRIC Group intends to rely primarily on this cash flow from
subsidiaries to pay dividends on its common stock, if any. The amount of future
cash flow available to NCRIC Group may be influenced by a variety of factors,
including NCRIC, Inc.'s financial results and regulation by the District of
Columbia Department of Insurance and Securities Regulation.

     The payment of dividends to NCRIC Group by NCRIC, Inc. is subject to
limitations imposed by the District of Columbia Holding Company System Act of
1993.  Under the DC Holding Company Act, NCRIC, Inc. must seek prior approval
from the Commissioner of Insurance and Securities to pay any dividend which,
combined with other dividends made within the preceding 12 months, exceeds the
lesser of (A) 10% of the surplus at the end of the prior year or (B) the prior
year's net income excluding realized capital gains.  Net income, excluding
realized capital gains, for the 2 years preceding the current year is carried
forward for purposes of the calculation to the extent not paid in dividends.
The law also requires that an insurer's statutory surplus following a dividend
or other distribution be reasonable in relation to the insurer's outstanding
liabilities and adequate to meet its financial needs.  The District of Columbia
permits the payment of dividends only out of unassigned statutory surplus.
Using these criteria, as of September 30, 1999 NCRIC, Inc. would have had
available approximately $2.4 million of unassigned statutory surplus available
for dividends.

Subsidiaries of NCRIC Group

     Liquidity. The primary sources of NCRIC subsidiaries' liquidity are
insurance premiums, net investment income, practice management and financial
services fees, recoveries from reinsurers and proceeds from the maturity or sale
of invested assets. Funds are used to pay claims, LAE, operating expenses,
reinsurance premiums and taxes, and to purchase investments.

     NCRIC subsidiaries had net cash outflow from operations of $615,000 for the
three months ended September 30, 1999 and $1.3 million for the three months
ended September 30, 1998. The $637,000 of increased cash flow in 1999 compared
to 1998 resulted primarily from higher premiums collected due to the effect of
new business written partially offset by additional losses and LAE paid. For the
nine months ended September 30, 1999 and 1998, NCRIC subsidiaries had positive
cash flow from operations.  Cash provided by operating activities of NCRIC
subsidiaries was $7.5 million for the nine months ended September 30, 1999 and
$8.4 million in the nine months ended September 30, 1998.  The $0.9 million of
decreased cash flow in 1999 compared to 1998 resulted primarily from $440,000 of
lower premiums collected due to the effect of staggering and $1.9 million of
additional losses and LAE paid partially offset by increased reinsurance
receipts.  Because of the long-term nature of both the payments of claims and
the settlement of swing-rated reinsurance premiums due to the reinsurers, cash
from operations for a medical professional liability insurer like NCRIC, Inc.
can vary substantially from year to year.

                                       20
<PAGE>

     Financial condition and capital resources. NCRIC subsidiaries invest their
cash flow from operations primarily in investment grade, fixed maturity
securities. As of September 30, 1999, the carrying value of NCRIC subsidiaries'
securities portfolio was $96.2 million, compared to a carrying value of $96.3
million as of December 31, 1998. The portfolios were invested as follows:


                                                    As of         As of
                                                September 30,   December 31,
                                                   1999            1998
                                                   ----            ----
U.S. Government and agencies..................      15%             25%
Asset-backed and mortgage-backed securities...      40              28
Tax-exempt securities.........................      15              21
Corporate bonds and preferred stocks..........      30              26


     Over 77% of the portfolio was invested in US Government/agency securities
or had a rating of AAA or AA. For regulatory purposes, 96% of the securities
portfolio was rated "Class 1" for all periods presented, which is the highest
quality rated group as classified by the NAIC.

     NCRIC subsidiaries believe that all of their fixed maturity securities are
readily marketable.  Investment duration is closely monitored to provide
adequate cash flow to meet operational and maturing liability needs.  Asset and
liability modeling, including sensitivity analyses and cash flow testing, are
performed on a regular basis.

     NCRIC subsidiaries have no corporate debt.  The $2.5 million line of credit
available as of September 30, 1999 is restricted to working capital for claims
settlements.  The line of credit is unsecured and renewable annually.  NCRIC
subsidiaries have not drawn down on this facility.  As of September 30, 1999, a
NCRIC subsidiary had entered into a contract to purchase new policy
administration system software; future payments under the contract are required
as services are completed by the vendor and total $564,000.  NCRIC subsidiaries
had no other material commitments for capital expenditures. NCRIC Group and its
subsidiaries are required to pay aggregate annual salaries in the amount of
$975,000 to six persons under employment agreements.

     The equity of NCRIC subsidiaries was $29.3 million at September 30, 1999
and $31.0 million at December 31, 1998. The $1.7 million decrease for the nine
months ended September 30, 1999 was due to a $3.7 million decrease in unrealized
appreciation net of tax in the investment portfolio, offset by net income.


Effects of inflation and interest rate changes

     The primary effect of inflation on NCRIC is in estimating reserves for
unpaid losses and LAE for medical professional liability claims in which there
is a long period between reporting and settlement. The rate of inflation for
malpractice claim settlements can substantially exceed the general rate of
inflation. The actual effect of inflation on NCRIC's results cannot be
conclusively known until claims are ultimately settled. Based on actual results
to date, NCRIC Group believes

                                       21
<PAGE>

that losses and LAE reserve levels and NCRIC Group's ratemaking process
adequately incorporate the effects of inflation.

     Interest rate changes expose NCRIC to a market risk on its investment
portfolio. This market risk is the potential for financial losses due to the
decrease in the value or price of an asset resulting from broad movements in
prices, such as interest rates. In general, the market value of NCRIC's fixed
maturity portfolio increases or decreases in an inverse relationship with
fluctuation in interest rates. In addition, NCRIC's net investment income
increases or decreases in a direct relationship with interest rate changes on
monies reinvested from maturing securities and investments of positive cash flow
from operating activities.

Year 2000 issues

     Many hardware computer and software computer programs were designed to
accommodate only two-digit fields to represent a given year; for example, "98"
represents 1998. The computer hardware and software automatically understands
the two-digit indicator to be associated with the twentieth century and assigns
the first two digits as "19." This design results in the inability of these
computer systems to recognize post-twentieth century dates and to properly
accept, process or display information related to the next century. If not
corrected, this could result in system or electronic equipment failures, or
miscalculations causing disruption of NCRIC's business operations.

     NCRIC's overall readiness initiatives have included the assignment of a
task force to provide an assessment of NCRIC's exposure to the Year 2000 issues.
The comprehensive program to address each aspect of the Year 2000 issues has
included an assessment of all critical business systems; remediation or
upgrading of critical systems; implementation of modified and updated systems;
testing of both modified and updated systems as well as integrated systems
testing; and contingency planning. The study has included an evaluation of both
NCRIC's internal hardware and software systems, as well as exposure from service
providers, brokers and other external business partners.

     NCRIC has completed an assessment of all its critical internal hardware and
software systems. Internal computer hardware and software has been determined to
be Year 2000 ready based on manufacturers' representations and internal testing.
NCRIC has completed full-scope integrated systems testing. NCRIC has contacted
its outside vendors and critical business partners concerning their Year 2000
compliance efforts. This process will be completed in 1999.

     NCRIC estimates that it has incurred internal and external costs associated
with the Year 2000 effort of approximately $26,000 for the nine months ended
September 30, 1999 and $15,000 and $36,000 for the years ended December 31, 1998
and 1997, respectively. NCRIC anticipates incurring internal costs of
approximately $2,000 during the remainder of 1999.

     Although there can be no assurance, NCRIC believes that its internal
operations will be sufficiently ready that the Year 2000 issues should not cause
a material disruption in its business. Despite these efforts, there can be no
guarantee that the systems of other companies on which NCRIC relies will be Year
2000 ready. Any failure associated with this non-readiness could have a material
effect on NCRIC. While NCRIC believes that the Year 2000 issues will not cause
an adverse effect on its ability to conduct its operations, it has begun to
explore various contingency

                                       22
<PAGE>

plans in order to complete the most critical aspects of its business operations
in the event of any failures in the remediation efforts. The most likely worst
case scenario would be disruption of utility services. Due to the service nature
of NCRIC businesses, a disruption of short duration would not be anticipated to
have any significant impact.

Forward-Looking Information

     A number of statements made by NCRIC in this document are forward-looking
statements which involve known and unknown risks and uncertainties which may
cause NCRIC's actual results to be materially different from historical results
or from the results expressed or implied by the forward-looking statements.
These risks and uncertainties include:

     .    general economic conditions including changes in interest rates and
          the performance of financial markets;
     .    NCRIC, Inc.'s concentration in a single line of business primarily in
          the District of Columbia;
     .    the impact of managed healthcare;
     .    uncertainties inherent in the estimate of loss and loss adjustment
          expense reserves and reinsurance;
     .    price competition;
     .    regulatory changes;
     .    ratings assigned by A.M. Best;
     .    the availability of bank financing and reinsurance;
     .    NCRIC, A Mutual Holding Company's structure; and
     .    uncertainties associated with NCRIC Group's acquisition strategy.


Other factors not currently anticipated by management may also materially and
adversely affect NCRIC Group's results of operations.

                                       23
<PAGE>

                          PART II   OTHER INFORMATION

Item 2.  Changes in Securities and Use of Proceeds.

     The Form SB-2 Registration Statement for 1,840,000 shares of NCRIC Group
Common Stock, par value $.01 per share, was declared effective by the Securities
and Exchange Commission on May 10, 1999 (File No. 333-69537). On that date, the
offering commenced. The offering terminated with a closing on July 29, 1999 for
the sale of 1,480,000 shares. NCRIC Group's agent in connection with the
offering was Sandler O'Neill & Partners, L.P. The aggregate offering price of
the shares registered was $12,880,000 and the aggregate price of the shares sold
was $10,360,000. The expenses of the offering were:

<TABLE>
     <S>                                                  <C>
     Agent's commissions                                  $  207,200
     Expenses paid to or for the agent                       109,900
     Other expenses                                        1,671,900
                                                          ----------
          Total                                           $1,989,000
</TABLE>

Actual expenses exceeded the original estimate primarily due to increased
professional fees and printing expenses.

The net offering proceeds after deducting expenses were $8,371,000 and used as
follows:

<TABLE>
     <S>                                                  <C>
     Repayment of indebtedness                            $5,100,000
     Loan to Employee Stock Ownership Plan                 1,036,000
     Loan to Stock Award Plan                                518,000
     General corporate purposes                            1,717,000
                                                          ----------

          Total                                           $8,371,000
</TABLE>

     None of the expenses or proceeds involved direct or indirect payments to
directors or officers of NCRIC Group or their associates, to persons owning 10%
or more of NCRIC Group's outstanding common stock or to affiliates of NCRIC
Group, except that officers will participate in the Employee Stock Ownership
Plan and directors and officers may participate in the Stock Award Plan.

     On or about July 29, 1999, NCRIC Group issued unregistered shares of its
common stock as follows:

<TABLE>
<CAPTION>
     Name                                                 Number
     <S>                                                  <C>
     L.E. Shepherd, Jr.                                   15,475
     William A. Hunter, Jr.                               15,475
     Barry S. Pillow                                      11,905
                                                          ------

          Total                                           42,855
</TABLE>

                                       24
<PAGE>

Item 6. Exhibits and Reports on Form 8-K.


(a)  Exhibits
     3.1* ........................  Articles of incorporation of NCRIC Group
     3.2* ........................  Bylaws of NCRIC Group
     10.1* .......................  Lease
     10.2* .......................  Amendment to Lease
     10.3*........................  Stock Option Plan
     10.4*........................  Employee Stock Ownership Plan
     10.5*........................  Stock Award Plan
     10.6*........................  Employment Agreement between National
                                    Capital Underwriters, Inc. and R. Ray Pate,
                                    Jr.
     10.7*........................  Amendment to Employment Agreement
                                    between NCRIC, Inc. and R. Ray Pate, Jr.
     10.8*........................  Employment Agreement between National
                                    Capital Underwriters, Inc. and Stephen S.
                                    Fargis
     10.9*........................  Employment Agreement between NCRIC,
                                    Inc. and Rebecca B. Crunk
     10.10*.......................  Employment Agreement between NCRIC MSO,
                                    Inc. and L.E. Shepherd, Jr.
     10.11*.......................  Employment Agreement between NCRIC MSO,
                                    Inc. and William A. Hunter, Jr.
     10.12*.......................  Employment Agreement between NCRIC MSO,
                                    Inc. and Barry S. Pillow
     10.13*.......................  Administrative Services Agreement
     10.14*.......................  Tax Sharing Agreement
     10.15*.......................  Operating Agreement among NCRIC Group, NCRIC
                                    MSO, Inc., HealthCare Consulting, HCI
                                    Ventures, L.E. Shepherd, Jr., William A.
                                    Hunter and Barry S. Pillow
     27...........................  Financial Data Schedule

     _____________
     *    Incorporated by reference to the NCRIC Group, Inc. Registration
     Statement on Form SB-2, File No. 333-69537

     (b)  Reports on Form 8-K NCRIC Group, Inc. did not file any reports on Form
          8-K during the quarter ended September 30, 1999.

                                       25
<PAGE>

                                  SIGNATURES

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

                                   NCRIC Group, Inc.


 November 10, 1999                 /s/ R. Ray Pate, Jr.
                                   -------------------------------------------
                                   R. Ray Pate, Jr., President & CEO

 November 10, 1999                 /s/ Rebecca B. Crunk
                                   -------------------------------------------
                                   Rebecca B. Crunk, Sr. Vice President & CFO

                                       26