<PAGE>

                                                                   EXHIBIT 10.31

                              TAX SHARING AGREEMENT

            This Agreement is dated June 26, 2002. Its parties are NORTH POINTE
HOLDINGS CORPORATION, a Michigan corporation ("Parent") and AFFILIATED COMPANIES
(see Schedule A for the complete listing). It provides for the sharing of
Federal and State income taxes among the parties. This Agreement is effective
for all tax years in which these corporations are members of a consolidated
return and affiliated group. In this Agreement each of the parties is
collectively referred to as the "Corporations."

      1. GENERAL AGREEMENT. The Corporations constitute an affiliated group of
corporations under Section 1504(a) of the Internal Revenue Code of 1986, and
they will make a consolidated Federal Income Tax Return under Section 1501 of
the Code and file consolidated 1139 Net Operating Loss Carrybacks as appropriate
for any taxable years within the statutory carryback period. For state purposes
a consolidated or combined return may be filed. Parent retains the right to
decide whether the Corporations will file consolidated, combined or individual
returns.

      2. PAYMENT OF TAX.

            2.1 PARENT'S AUTHORITY. Parent will have the authority and
responsibility to pay income taxes due the Internal Revenue Service and state
tax authorities, and collect income tax refunds from the Internal Revenue
Service and state taxing authorities on behalf of itself and the other
Corporations.

            2.2 TIMING OF PAYMENTS. Upon request by Parent at least five (5)
days before the applicable estimated payment date, the Corporations will pay
Parent, the estimated taxes in an amount not to exceed the amount of the
liability computed under Section 3 of this Agreement. The Parent will refund
estimated tax refunds to the Corporations within 5 days of receipt of the refund
from the taking authority in questions. Any settlements under this Agreement
will be made within thirty (30) days of the filing of the estimated or actual
consolidated income tax returns with the Internal Revenue Service, except where
a refund is due, in which case, payment may be deferred to within thirty (30)
days of receipt of such refund. If payment is made after thirty (30) days of
receipt of such refund, interest will accrue on such amount at the prevailing
prime rate.

            2.3 TRANSMITTAL OF INFORMATION. When it files a consolidated tax
return with the Internal Revenue Service, Parent will compute each party's
actual tax liability in accordance with Section 3 of this Agreement and furnish
copies of both the computation and the tax return to the Corporations. Any
balance due will be payable to Parent upon notification of the final
computation.

      3. ALLOCATION OF TAX LIABILITY

            3.1 METHOD OF APPORTIONMENT. The tax liability of the parties will
be apportioned among them in accordance with the ratio of the consolidated
taxable income attributable to each party having taxable income bears to
consolidated taxable income. Under no circumstances however, will any
Corporation pay more than if they had filed on a separate basis. The party's
income used in computation is adjusted for the its portion of the following
items:

                  3.1.1. consolidated deductions for net operating losses,
charitable contributions, dividends received and dividends paid on preferred
stock of public utilities;

                  3.1.2. net capital gains, but without regard to any net
capital carryovers;

                  3.1.3. net capital loss and net loss from the capital
gain/ordinary loss rule;

                  3.1.4. consolidated net capital loss carryover absorbed in tax
year. If a party generates a tax attribute (loss or credit) that is or may be
absorbed by the consolidated group regular tax income, that member will be paid
in compensation for the regular tax benefit associated with the tax attribute.
The tax benefit payment shall be computed as follows:
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            In any taxable year in which the consolidated regular federal income
            tax liability is reduced by a tax loss generated by a member, the
            amount of that loss used attributable to such member is equal to the
            sum of taxable incomes for members having taxable income multiplied
            by a fraction, the numerator of which is the separate tax loss of
            such member, and the denominator of which is the sum of the tax
            losses of all members having such losses.

            The payment allocable to the loss member shall be the result of the
            preceding formula multiplied by the applicable consolidated marginal
            regular federal tax rate.

            3.2 ALTERNATIVE MINIMUM TAX. In any taxable year in which a
consolidated alternative minimum tax (AMT) liability is payable on the
consolidated federal income tax return, the consolidated federal income tax
liability shall be allocated among the members in the following manner:

                  3.2.1. The consolidated regular federal income tax liability
of the members will be allocated as provided in Section 3.1 above.

                  3.2.2. The consolidated alternative minimum tax liability
(i.e. the excess of the alternative minimum tax liability over the regular tax
liability) shall be allocated to each member whose alternative minimum taxable
income exceeds the breakeven alternative minimum taxable income (i.e. the amount
of alternative minimum taxable income at which a member's tentative alternative
minimum tax liability would equal its regular federal income tax liability). The
amount of this liability allocated to any such member shall be equal to the
consolidated alternative minimum tax liability multiplied by a fraction, the
numerator of which is the excess of such member's alternative minimum taxable
income over its regular taxable income, and the denominator of which is the
excess of the sum of all such members' alternative minimum taxable incomes over
the sum of their regular taxable incomes.

                  3.2.3. The amount of each member's minimum tax credit shall
equal its alternative minimum tax liability as allocated under this paragraph
for all taxable years to which this Agreement applies, reduced by the minimum
tax credit used as provided in the following paragraph.

                  3.2.4. In any taxable year in which the consolidated regular
federal income tax liability is reduced by the minimum tax credit, the amount of
the credit used attributable to each member is equal to the consolidated minimum
tax credit multiplied by a fraction, the numerator of which is the separate
minimum tax credit of such member, and the denominator of which is the sum of
the separate minimum tax credits of all members having such credits.

                  3.2.5. Under no circumstances will any corporation pay more
than if they had filed on a separate basis.

            3.3 DETAILED COMPUTATION. A detailed computation of the settlement
under Article III will be provided at the time the payment of taxes or paying a
refund is requested. Material required to prepare the detailed computation will
be available to each company upon their request.

      4. EXAMINATION OF TAX RETURNS BY FEDERAL AND STATE AUTHORITIES

            4.1 ADJUSTMENTS TO TAX LIABILITY. Any adjustment to the tax
liability arising from examination of the consolidated return shall be computed
on the basis of agreements reached between Parent and the Internal Revenue
Service or state tax authorities, or on the basis of court decisions if issues
should be litigated. Except in the case of gross negligence or fraudulent
conduct by Parent, or its consultants, Corporations specifically waive any
claims against Parent or defenses against additional tax liabilities, based upon
the contention that any concession, compromise or other agreement between Parent
and the Internal Revenue Service or state tax authorities is disadvantageous to
Corporations or that any of the corporations may have been able to obtain a more
favorable settlement on a separate company basis.

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            4.2 COSTS OF AUDIT AND EXAMINATION. Parent will initially bear the
administrative cost of all examinations by the Internal Revenue Service or state
authorities, including the cost of defending against adjustments proposed by the
examining authorities. Any such administrative costs subsequently will be
reimbursed by Corporations through a general and administrative charge to
reflect a reasonable allocation of that cost among Corporations based on their
respective share, if any, of adjustments which are attributable to their
respective taxable incomes. Parent will inform Corporations promptly of all
questions being raised by Revenue Agents conducting the examination of tax
returns and to cooperate with Parent and its tax advisors in working with the
Revenue Agents.

            4.3 RE-DETERMINATION OF TAX LIABILITIES. Upon final settlement of
adjustments resulting from audits of the consolidated returns by the Internal
Revenue Service or state tax authorities, Parent and Corporations' federal and
state tax liabilities for the years examined shall be re-determined to reflect
the adjustments relating to that corporation. Any additional tax interest and
penalties due shall be payable upon notification from Parent of the amount.
Refunds due any corporation shall be credited first to unpaid liabilities for
tax or estimated tax, and the remainder paid by the Parent to Corporations.

      5. MISCELLANEOUS

            5.1 DURATION. This Agreement will remain in effect for so long as
the statute of limitations is open on any return of Parent and Corporations. No
contract or agreement for the sale of any member's stock or other determination
of the affiliation of Parent and Corporation(s) will relieve any party of its
obligations under this Agreement as they relate to the years the members are
included in the consolidated tax return of Parent, except to the extent
specifically provided in such written agreements.

            In any event, this Agreement will continue to be fully effective
until Parent and Corporations agree to terminate the Agreement. Notwithstanding
any such termination, this Agreement shall continue in effect with respect to
any payments or refunds due for all periods prior to terminations.

            5.2 TERMINATION. This Agreement shall be terminated if:

            (a)   The parties agree in writing to such termination;

            (b)   Membership in the affiliated group ceased or is terminated for
                  any reason whatsoever;

            (c)   The affiliated group fails to file a consolidated return for
                  the taxable year.

            5.3 INTERPRETATION. The Agreement may be interpreted in accordance
with any and all pertinent and applicable revisions, changes or other
modifications of the Internal Revenue Code of 1986 and the regulations
promulgated thereunder.

            5.4 NO ASSIGNMENT. A party may not assign this Agreement to any
party without prior written consent of the other parties.

            5.5 AVAILABILITY OF DOCUMENTS. Notwithstanding termination, all
material including, but not limited to returns, supporting schedules, work
papers, correspondence and other documents relating to the consolidated return
shall be made available to any party to the Agreement during regular business
hours.

            5.6 ARBITRATION. Unresolved differences between parties relating to
this Agreement will be submitted to an arbitration panel consisting of one
arbitrator chosen by each disputing party and an additional arbitrator to be
chosen by the other two arbitrators.

The party demanding arbitration shall communicate its demand to the other party
by registered mail, identifying the nature of the dispute and the name of its
arbitrator.lf the other party fails to name its
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arbitrator within 30 days from receiving the demand, the demanding party will
name the second arbitrator within ten (10) days thereafter. If the first two
arbitrators are unable to agree upon a third arbitrator, the third arbitrator
will be chosen by the independent public accounting firm then serving the
Parent. The arbitrators shall be impartial and shall be active or retired
financial officers of property or casualty insurance or reinsurance companies
authorized to transact business in the United States of America.The arbitrators
are relieved from judicial formality and will follow the Commercial Rules of the
American Arbitration Association. The Board of Arbitration shall have the power
to receive and act upon such evidence, whether oral or written, strictly
admissible or not, as it shall in its discretion think fit. The decision of the
majority of the arbitrators will be in writing and will be final and binding
upon the parties. If either of the parties fails to comply with this decision,
the other party may apply for its enforcement to a court of competent
jurisdiction in which the party in default is domiciled, or has assets, or
carries on business.Each party shall bear the cost of its own arbitrator and
shall equally bear with the other parties the expense of the third arbitrator.
If one party chooses both arbitrators, the fees of all arbitrators shall be
equally divided between the parties. The panel of arbitrators will allocate the
remaining costs of the arbitration proceedings.

            The arbitration shall be held at the times and places agreed upon
the state of Michigan.

            5.7 GOVERNING LAW. Michigan law governs this Agreement.

            The parties have signed this Agreement through their respective
officers as authorized, effective for the tax years written above.

                                          NORTH POINTE HOLDINGS CORPORATION

                                          By:  /s/ James G. Petcoff
                                               ---------------------------------

                                          NORTH POINTE FINANCIAL SERVICES, INC.

                                          By:  /s/ John H. Berry
                                               ---------------------------------

                                          NORTH POINTE INSURANCE COMPANY

                                          By:  /s/ B. Matthew Petcoff
                                               ---------------------------------

                                          N.P. PREMIUM FINANCE COMPANY

                                          By:  /s/ John H. Berry
                                               ---------------------------------

                      [balance of signatures on next page]


<PAGE>

                                          UNIVERSAL FIRE AND CASUALTY INSURANCE
                                          COMPANY

                                          By:  /s/ Judith A. Wikman
                                               ---------------------------------

                                          ALLIANCE SURETY HOLDINGS, INC.

                                          By:  /s/ James G. Petcoff
                                               ---------------------------------


<PAGE>

                                   SCHEDULE A

Notices of settlements with regard to this Agreement shall be addressed as
follows:

<TABLE>
<CAPTION>
Name and Address of Corporation                        Employer Identification Number
<S>                                                    <C>
Parent Company
North Pointe Holdings Corporation
28819 Franklin Road, Suite 300
Southfield, MI 48037-2223                                         38-3615047

North Pointe Financial Services, Inc.
28819 Franklin Road, Suite 300
Southfield, MI 48037-2223                                         38-3418631

N.P. Premium Finance Company
28819 Franklin Road, Suite 300
Southfield, MI 48037-2223                                         38-2742963

North Pointe Insurance Company
28819 Franklin Road, Suite 300
Southfield, MI 48037-2223                                         38-2706529

Universal Fire & Casualty Insurance Company
28819 Franklin Road, Suite 300
Southfield, MI 48037-2223                                         35-175695

Alliance Surety Holdings, Inc.
28819 Franklin Road, Suite 300
Southfield, MI 48037-2223                                         52-2114969
</TABLE>