| Nevada                                                                               | 95-2583928                  |
|--------------------------------------------------------------------------------------|-----------------------------|
| (State or Other Jurisdiction      of                                            |  (I.R.S.      Employee |
|  Incorporation or      Organization)                                            | Identification      No.)    |
|                                                                                 |                        |
|  23251 Mulholland      Drive,  Woodland Hills, California  91364 |
|  (Address of Principal Executive      Offices)  (Zip    Code)              |

----

|                                                                                                                                                                                                        |   | June      30 |        |   | December      31 |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|-------------|--------|------------------|--------|
|                                                                                                                                                                                                        |   | 2008         |        |   | 2007             |   |
|                                                                                                                                                                                                        |   | (Unaudited)  |        |   |             |   |
| ASSETS                                                                                                                                                                                                      |   |         |        |   |             |   |
| Investments                                                                                                                                                                                                 |   |         |        |   |             |   |
|    Available      for sale:                                                                                                                                                                  |   |         |        |   |             |   |
|       Fixed      maturities, at fair value (amortized cost:  June      30,  2008  $138,169,290; December 31,      2007  $139,992,208) |   | $            | 140,949,646 |   |             | $      | 142,895,472 |   |
|    Short-term      investments, at cost                                                                                                                                                      |   |         | 6,927,353   |   |             |   | 7,356,159 |   |
| Total    Investments                                                                                                                                                                                        |   |         | 147,876,999 |   |             |   | 150,251,631 |   |
| Cash                                                                                                                                                                                                        |   |         | 30,990      |   |             |   | 108,864 |   |
| Accrued      investment income                                                                                                                                                                              |   |         | 1,332,844   |   |             |   | 1,554,741 |   |
| Premiums      and notes receivable, net                                                                                                                                                                     |   |         | 4,939,620   |   |             |   | 5,066,646 |   |
| Reinsurance      recoverable:                                                                                                                                                                               |   |         |        |   |             |   |   |   |
|    Paid      losses and loss adjustment expenses                                                                                                                                             |   |         | 424,549     |   |             |   | 318,186 |   |
|    Unpaid      losses and loss adjustment expenses                                                                                                                                           |   |         | 23,217,440  |   |             |   | 28,425,424 |   |
| Deferred      policy acquisition costs                                                                                                                                                                      |   |         | 5,319,367   |   |             |   | 5,722,847 |   |
| Property      and equipment (net of accumulated depreciation)                                                                                                                                               |   |         | 463,484     |   |             |   | 557,234 |   |
| Deferred      income taxes                                                                                                                                                                                  |   |         | 694,900     |   |             |   | 686,910 |   |
| Other      assets                                                                                                                                                                                           |   |         | 1,038,533   |   |             |   | 1,083,378 |   |
| Total Assets                                                                                                                                                                                                |   | $            | 185,338,726 |   |             | $      | 193,775,861 |   |
|                                                                                                                                                                                                        |   |         |        |   |             |   |   |   |
| LIABILITIES AND STOCKHOLDERS'      EQUITY                                                                                                                                                                   |   |
| LIABILITIES                                                                                                                                                                                                 |   |         |        |   |             |   |   |   |
| Unpaid      losses and loss adjustment expenses                                                                                                                                                             |   | $            | 85,922,048  |   |             | $      | 94,730,711 |   |
| Unearned      premiums                                                                                                                                                                                      |   |         | 20,674,279  |   |             |   | 22,742,612 |   |
| Advance      premium and premium deposits                                                                                                                                                                   |   |         | 1,216,840   |   |             |   | 2,159,290 |   |
| Accrued      expenses and other liabilities                                                                                                                                                                 |   |         | 6,762,625   |   |             |   | 5,040,145 |   |
| Total    Liabilities                                                                                                                                                                                        |   | $            | 114,575,792 |   |             | $      | 124,672,758 |   |
|                                                                                                                                                                                                        |   |         |        |   |             |   |   |   |
| STOCKHOLDERS'  EQUITY                                                                                                                                                                             |   |         |        |   |             |   |   |   |
| Common      stock, no par – authorized 10,000,000 shares; issued and      outstanding                                                                                             |   |         |        |   |             |   |   |   |
|        shares 5,625,308 at June 30, 2008 and 5,625,308 at December 31,      2007                                                                                                                       |   | $            | 3,594,207   |   |             | $      | 3,594,207 |   |
| Accumulated      other comprehensive gain                                                                                                                                                                   |   |         | 1,835,035   |   |             |   | 1,916,154 |   |
| Retained      earnings                                                                                                                                                                                      |   |         | 65,333,692  |   |             |   | 63,592,742 |   |
| Total Stockholders’      Equity                                                                                                                                                                       |   | $            | 70,762,934  |   |             | $      | 69,103,103 |   |
|                                                                                                                                                                                                        |   |         |        |   |             |   |   |   |
| Total Liabilities and      Stockholders' Equity                                                                                                                                                             |   | $            | 185,338,726 |   |             | $      | 193,775,861 |   |

----

|                                                                |   | Three      Months Ended |       |   | Six      Months Ended |   |
|---------------------------------------------------------------------|--------|-------------------------|------------|--------|-----------------------|--------|
|                                                                |   | June 30                 |       |   | June 30               |   |
|                                                                |   | 2008                    |       |   | 2007                  |   |   | 2008 |   |   | 2007 |   |
| REVENUES                                                            |   |                    |       |   |                  |   |   |   |   |   |   |   |
| Insurance      Company Revenues                                     |   |                    |       |   |                  |   |   |   |   |   |   |   |
|   Premium      earned                                     |   | $                       | 10,805,540 |   |                  | $      | 12,392,166 |   |   | $ | 21,952,486 |   |   | $ | 25,132,499 |   |
|   Premium      ceded                                      |   |                    | 2,224,544  |   |                  |   | 2,908,621 |   |   |   | 4,446,724 |   |   |   | 5,939,756 |   |
|      Net      premium earned               |   |                    | 8,580,996  |   |                  |   | 9,483,545 |   |   |   | 17,505,762 |   |   |   | 19,192,743 |   |
|   Net      investment income                              |   |                    | 1,481,120  |   |                  |   | 1,660,990 |   |   |   | 3,078,186 |   |   |   | 3,283,280 |   |
| Net      realized investment gains                                  |   |                    | -          |   |                  |   | - |   |   |   | 6,306 |   |   |   | - |   |
|   Other      income                                       |   |                    | 207,545    |   |                  |   | 19,859 |   |   |   | 322,183 |   |   |   | 29,500 |   |
|      Total      Insurance Company Revenues |   |                    | 10,269,661 |   |                  |   | 11,164,394 |   |   |   | 20,912,437 |   |   |   | 22,505,523 |   |
|                                                                |   |                    |       |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| Other      Revenues from Insurance Operations                       |   |                    |       |   |                  |   |   |   |   |   |   |   |   |   |   |   |
|   Gross      commissions and fees                         |   |                    | 1,415,393  |   |                  |   | 1,348,821 |   |   |   | 2,886,757 |   |   |   | 2,714,898 |   |
|   Investment      income                                  |   |                    | 15,629     |   |                  |   | 40,124 |   |   |   | 41,077 |   |   |   | 78,149 |   |
|   Finance      charges and fees                           |   |                    | 119,011    |   |                  |   | 142,484 |   |   |   | 243,532 |   |   |   | 291,024 |   |
|   Other      income                                       |   |                    | 2,700      |   |                  |   | 3,215 |   |   |   | 6,711 |   |   |   | 6,496 |   |
|      Total      Revenues                   |   |                    | 11,822,394 |   |                  |   | 12,699,038 |   |   |   | 24,090,514 |   |   |   | 25,596,090 |   |
|                                                                |   |                    |       |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| EXPENSES                                                            |   |                    |       |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| Losses      and loss adjustment expenses                            |   |                    | 6,080,589  |   |                  |   | 5,484,106 |   |   |   | 12,276,295 |   |   |   | 11,418,076 |   |
| Policy      acquisition costs                                       |   |                    | 2,077,190  |   |                  |   | 2,305,015 |   |   |   | 4,158,161 |   |   |   | 4,300,595 |   |
| Salaries      and employee benefits                                 |   |                    | 1,398,398  |   |                  |   | 1,463,143 |   |   |   | 2,835,437 |   |   |   | 2,884,651 |   |
| Commissions      to agents/brokers                                  |   |                    | 318,161    |   |                  |   | 236,192 |   |   |   | 639,652 |   |   |   | 440,497 |   |
| Other      operating expenses                                       |   |                    | 781,870    |   |                  |   | 698,596 |   |   |   | 1,568,482 |   |   |   | 1,463,847 |   |
|      Total      Expenses                   |   |                    | 10,656,208 |   |                  |   | 10,187,052 |   |   |   | 21,478,027 |   |   |   | 20,507,666 |   |
|                                                                |   |                    |       |   |                  |   |   |   |   |   |   |   |   |   |   |   |
|      Income      Before Taxes              |   |                    | 1,166,186  |   |                  |   | 2,511,986 |   |   |   | 2,612,487 |   |   |   | 5,088,424 |   |
| Income      tax provision                                           |   |                    | 385,226    |   |                  |   | 846,014 |   |   |   | 871,537 |   |   |   | 1,700,153 |   |
|      Net      Income                  |   | $                       | 780,960    |   |                  | $      | 1,665,972 |   |   | $ | 1,740,950 |   |   | $ | 3,388,271 |   |
|                                                                |   |                    |       |   |                  |   |   |   |   |   |   |   |   |   |   |   |
|                                                                |   |                    |       |   |                  |   |   |   |   |   |   |   |   |   |   |   |
|                                                                |   |                    |       |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| PER      SHARE DATA:                                                |   |                    |       |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                               |   |                    |       |   |                  |   |   |   |   |   |   |   |   |   |   |   |
|     Weighted      Average Shares                |   |                    | 5,625,308  |   |                  |   | 5,610,570 |   |   |   | 5,625,308 |   |   |   | 5,603,048 |   |
|     Earnings      Per Share                     |   | $                       | 0.14       |   |                  | $      | 0.30 |   |   | $ | 0.31 |   |   | $ | 0.60 |   |
| Diluted                                                             |   |                    |       |   |                  |   |   |   |   |   |   |   |   |   |   |   |
|     Weighted      Average Shares                |   |                    | 5,668,369  |   |                  |   | 5,682,812 |   |   |   | 5,669,002 |   |   |   | 5,681,031 |   |
|     Earnings      Per Share                     |   | $                       | 0.14       |   |                  | $      | 0.29 |   |   | $ | 0.31 |   |   | $ | 0.60 |   |

----

|                                                                                                                                 |   | Three      Months Ended |       |   | Six      Months Ended |   |
|--------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------|------------|--------|-----------------------|--------|
|                                                                                                                                 |   | June 30                 |       |   | June 30               |   |
|                                                                                                                                 |   | 2008                    |       |   | 2007                  |   |   | 2008 |   |   | 2007 |   |
|                                                                                                                                 |   |                    |       |   |                  |   |   |   |   |   |   |   |
| Net      Income                                                                                                                      |   | $                       | 780,960    |   |                  | $      | 1,665,972 |   |   | $ | 1,740,950 |   |   | $ | 3,388,271 |   |
| Other      changes in comprehensive income, net of tax:                                                                              |   |                    |       |   |                  |   |   |   |   |   |   |   |   |   |   |   |
|      Unrealized      (losses) on securities classified as available-for-sale arising during the      period |   |                    | (1,793,479 | )      |                  |   | (263,397 | ) |   |   | (81,119 | ) |   |   | (58,330 | ) |
|             Comprehensive      Income (Loss)                             |   | $                       | (1,012,519 | )      |                  | $      | 1,402,575 |   |   | $ | 1,659,831 |   |   | $ | 3,329,941 |   |

----

|                                                                                            |   | For      the Six Months Ended |         |
|-------------------------------------------------------------------------------------------------|--------|-------------------------------|--------------|
|                                                                                            |   | June 30                       |         |
|                                                                                            |   | 2008                          |         |   | 2007 |   |
| Cash      Flows from Operating Activities:                                                      |   |                          |         |   |   |   |
|    Net      Income                                                               |   | $                             | 1,740,950    |   |   | $ | 3,388,271 |   |
|    Adjustments      to reconcile net income to net cash from operations          |   |                          |         |   |   |   |   |   |
|       Depreciation                                                |   |                          | 105,970      |   |   |   | 121,121 |   |
|       Bond      amortization, net                                 |   |                          | 129,993      |   |   |   | (38,989 | ) |
| Net      realized investment gains                                                              |   |                          | (6,306       | ) |   |   | - |   |
|    Changes      in assets and liabilities                                        |   |                          |         |   |   |   |   |   |
|       Premium,      notes and investment income receivable        |   |                          | 348,923      |   |   |   | 345,424 |   |
|       Reinsurance      recoverable                                |   |                          | 5,101,621    |   |   |   | (988,718 | ) |
|       Deferred      policy acquisitions costs                     |   |                          | 403,480      |   |   |   | 482,148 |   |
|       Other      assets                                           |   |                          | 1,987        |   |   |   | (111,817 | ) |
|       Reserve      for unpaid losses and loss adjustment expenses |   |                          | (8,808,663   | ) |   |   | (306,928 | ) |
|       Unearned      premium reserve                               |   |                          | (2,068,333   | ) |   |   | (2,877,252 | ) |
|       Funds      held as security and advanced premiums           |   |                          | (942,450     | ) |   |   | 424,124 |   |
|       Accrued      expenses and other liabilities                 |   |                          | 1,722,480    |   |   |   | 597,306 |   |
|       Tax      benefit from disqualified incentive stock options  |   |                          | -            |   |   |   | (49,105 | ) |
|       Income      taxes current/deferred                          |   |                          |  76,657 |   |   |   | (1,552,721 | ) |
| Net Cash (Used in)      Operations                                                              |   |                          | (2,193,691   | ) |   |   | (567,136 | ) |
|                                                                                            |   |                          |         |   |   |   |   |   |
| Investing      Activities                                                                       |   |                          |         |   |   |   |   |   |
| Purchase of fixed maturity      investments                                                     |   |                          | (30,241,519  | ) |   |   | (29,645,753 | ) |
| Proceeds from maturity of fixed      maturity investments                                       |   |                          | 31,435,000   |   |   |   | 30,600,000 |   |
| Proceeds from sale of fixed      maturity investments                                           |   |                          | 505,750      |   |   |   | - |   |
| Net (increase) decrease in      short-term investments                                          |   |                          | 428,806      |   |   |   | (502,357 | ) |
| Additions to property and      equipment                                                        |   |                          | (12,220      | ) |   |   | (46,758 | ) |
| Net Cash Provided by Investing      Activities                                                  |   |                          | 2,115,817    |   |   |   | 405,132 |   |
|                                                                                            |   |                          |         |   |   |   |   |   |
| Financing      Activities                                                                       |   |                          |         |   |   |   |   |   |
| Proceeds from exercise of stock      options                                                    |   |                          | -            |   |   |   | 262,350 |   |
|         Tax benefit from disqualified incentive stock options                         |   |                          | -            |   |   |   | 49,105 |   |
| Repurchase of common      stock                                                                 |   |                          | -            |   |   |   | (115,261 | ) |
| Net Cash Provided by Financing      Activities                                                  |   |                          | -            |   |   |   | 196,194 |   |
|                                                                                            |   |                          |         |   |   |   |   |   |
| Net      increase in cash                                                                       |   |                          | (77,874      | ) |   |   | 34,190 |   |
| Cash at beginning of      period                                                                |   |                          | 108,864      |   |   |   | 34,535 |   |
| Cash at End of      Period                                                                      |   | $                             | 30,990       |   |   | $ | 68,725 |   |
|                                                                                            |   |                          |         |   |   |   |   |   |
| Supplemental      Cash Flow Information                                                         |   |                          |         |   |   |   |   |   |
| Cash paid during the period      for:                                                           |   |                          |         |   |   |   |   |   |
| Interest                                                                                        |   |                          | -            |   |   |   | - |   |
| Income taxes                                                                                    |   | $                             | 800,000      |   |   | $ | 3,400,597 |   |

----

----

|                                        |   | Consolidated      Balance SheetFor the year ended December 31,      2007 |       |
|---------------------------------------------|--------|--------------------------------------------------------------------------|------------|
|                                        |   | As      previously reported                                              |       |   | Correction |   |   | As corrected |   |
|                                        |   |                                                                     |       |   |   |   |   |   |   |
| Deferred      income taxes                  |   | $                                                                        | 295,026    |   |   | $ | 391,884 |   |   | $ | 686,910 |   |
| Accrued      expenses and other liabilities |   | $                                                                        | 3,887,546  |   |   | $ | 1,152,599 |   |   | $ | 5,040,145 |   |
| Retained      earnings                      |   | $                                                                        | 64,353,457 |   |   | $ | (760,715 | ) |   | $ | 63,592,742 |   |

|                           |   | Consolidated      Statement of OperationFor      the three months endedJune 30, 2007 |      |   | Consolidated      Statement of OperationFor      the six months endedJune 30, 2007 |   |
|--------------------------------|--------|--------------------------------------------------------------------------------------|-----------|--------|------------------------------------------------------------------------------------|--------|
|                           |   | As      previously reported                                                          |      |   | Correction                                                                         |   |   | As corrected |   |   | As      previously reported |   |   | Correction |   |   | As corrected |   |
|                           |   |                                                                                 |      |   |                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Gross      commission and fees |   | $                                                                                    | 1,288,749 |   |                                                                               | $      | 60,072 |   |   | $ | 1,348,821 |   |   | $ | 2,603,749 |   |   | $ | 111,149 |   |   | $ | 2,714,898 |   |
| Income      tax provision      |   | $                                                                                    | 825,590   |   |                                                                               | $      | 20,424 |   |   | $ | 846,014 |   |   | $ | 1,662,363 |   |   | $ | 37,790 |   |   | $ | 1,700,153 |   |
| Net      income                |   | $                                                                                    | 1,626,324 |   |                                                                               | $      | 39,648 |   |   | $ | 1,665,972 |   |   | $ | 3,314,912 |   |   | $ | 73,359 |   |   | $ | 3,388,271 |   |

|            |   | Statement      of Comprehensive IncomeFor the three months ended June 30,      2007 |      |   | Statement      of Comprehensive IncomeFor the six months ended June 30,      2007 |   |
|-----------------|--------|-------------------------------------------------------------------------------------|-----------|--------|-----------------------------------------------------------------------------------|--------|
|            |   | As      previously reported                                                         |      |   | Correction                                                                        |   |   | As corrected |   |   | As      previously reported |   |   | Correction |   |   | As corrected |   |
|            |   |                                                                                |      |   |                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      income |   | $                                                                                   | 1,626,324 |   |                                                                              | $      | 39,648 |   |   | $ | 1,665,972 |   |   | $ | 3,314,912 |   |   | $ | 73,359 |   |   | $ | 3,388,271 |   |

|                                        |   | Consolidated      Statement of Cash FlowFor the six months ended June 30,      2007 |       |
|---------------------------------------------|--------|-------------------------------------------------------------------------------------|------------|
|                                        |   | As      previously reported                                                         |       |   | Correction |   |   | As corrected |   |
|                                        |   |                                                                                |       |   |   |   |   |   |   |
| Net      income                             |   | $                                                                                   | 3,314,912  |   |   | $ | 73,359 |   |   | $ | 3,388,271 |   |
| Accrued      expenses and other liabilities |   | $                                                                                   | 708,455    |   |   | $ | (111,149 | ) |   | $ | 597,306 |   |
| Income      taxes current/deferred          |   | $                                                                                   | (1,590,511 | ) |   | $ | 37,790 |   |   | $ | (1,552,721 | ) |
|                                        |   |                                                                                |       |   |   |   |   |   |   |   |   |   |

----

|                                                          |   | Three      Months Ended |      |   | Six      Months Ended |   |
|---------------------------------------------------------------|--------|-------------------------|-----------|--------|-----------------------|--------|
|                                                          |   | June 30                 |      |   | June 30               |   |
|                                                          |   | 2008                    |      |   | 2007                  |   |   | 2008 |   |   | 2007 |   |
| Basic Earnings Per Share                                      |   |                    |      |   |                  |   |   |   |   |   |   |   |
| Net      income numerator                                     |   | $                       | 780,960   |   |                  | $      | 1,665,972 |   |   | $ | 1,740,950 |   |   | $ | 3,388,271 |   |
|                                                          |   |                    |      |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| Weighted      average shares outstanding denominator          |   |                    | 5,625,308 |   |                  |   | 5,610,570 |   |   |   | 5,625,308 |   |   |   | 5,603,048 |   |
|                                                          |   |                    |      |   |                  |   |   |   |   |   |   |   |   |   |   |   |
|      Basic      Earnings Per Share   |   | $                       | 0.14      |   |                  | $      | 0.30 |   |   | $ | 0.31 |   |   | $ | 0.60 |   |
|                                                          |   |                    |      |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| Diluted Earnings per Share                                    |   |                    |      |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| Net      income numerator                                     |   | $                       | 780,960   |   |                  | $      | 1,665,972 |   |   | $ | 1,740,950 |   |   | $ | 3,388,271 |   |
|                                                          |   |                    |      |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| Weighted      average shares outstanding                      |   |                    | 5,625,308 |   |                  |   | 5,610,570 |   |   |   | 5,625,308 |   |   |   | 5,603,048 |   |
| Effect      of diluted securities                             |   |                    | 43,061    |   |                  |   | 72,242 |   |   |   | 43,694 |   |   |   | 77,983 |   |
| Diluted      shares outstanding denominator                   |   |                    | 5,668,369 |   |                  |   | 5,682,812 |   |   |   | 5,669,002 |   |   |   | 5,681,031 |   |
|                                                          |   |                    |      |   |                  |   |   |   |   |   |   |   |   |   |   |   |
|      Diluted      Earnings Per Share |   | $                       | 0.14      |   |                  | $      | 0.29 |   |   | $ | 0.31 |   |   | $ | 0.60 |   |

----

----

|                                                    |   | Three      Months Ended |       |   | Six      Months Ended |   |
|---------------------------------------------------------|--------|-------------------------|------------|--------|-----------------------|--------|
|                                                    |   | June 30                 |       |   |  June 30         |   |
|                                                    |   | 2008                    |       |   | 2007                  |   |   | 2008 |   |   | 2007 |   |
| Revenues                                                |   |                    |       |   |                  |   |   |   |   |   |   |   |
| Insurance      company operation                        |   | $                       | 10,269,661 |   |                  | $      | 11,164,394 |   |   | $ | 20,912,437 |   |   | $ | 22,505,523 |   |
|                                                    |   |                    |       |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| Other      insurance operations                         |   |                    | 4,234,233  |   |                  |   | 4,762,084 |   |   |   | 8,750,462 |   |   |   | 9,354,384 |   |
| Intersegment      eliminations (1)                      |   |                    | (2,681,500 | )      |                  |   | (3,227,440 | ) |   |   | (5,572,385 | ) |   |   | (6,263,817 | ) |
|    Total      other insurance operations |   |                    | 1,552,733  |   |                  |   | 1,534,644 |   |   |   | 3,178,077 |   |   |   | 3,090,567 |   |
|                                                    |   |                    |       |   |                  |   |   |   |   |   |   |   |   |   |   |   |
|    Total      revenues                   |   | $                       | 11,822,394 |   |                  | $      | 12,699,038 |   |   | $ | 24,090,514 |   |   | $ | 25,596,090 |   |
|                                                    |   |                    |       |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| Income (Loss) Before Income      Taxes                  |   |                    |       |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| Insurance      company operation                        |   | $                       | 1,904,906  |   |                  | $      | 3,167,960 |   |   | $ | 3,910,083 |   |   | $ | 6,095,011 |   |
| Other      insurance operations                         |   |                    | (738,720   | )      |                  |   | (655,974 | ) |   |   | (1,297,596 | ) |   |   | (1,006,587 | ) |
|    Total      income before income taxes |   | $                       | 1,166,186  |   |                  | $      | 2,511,986 |   |   | $ | 2,612,487 |   |   | $ | 5,088,424 |   |

|                                                                       |   | As of   |             |
|----------------------------------------------------------------------------|--------|---------|------------------|
|                                                                       |   | June 30 |             |   | December 31 |   |
|                                                                       |   | 2008    |             |   | 2007 |   |
| Assets                                                                     |   |    |             |   |   |   |
| Insurance      company operation                                           |   | $       | 169,159,355      |   |   | $ | 177,278,243 |   |
| Intersegment      eliminations (2)                                         |   |    |  (1,449,219 | ) |   |   |  (1,537,590 | ) |
|      Total      insurance company operation  |   |    | 167,710,136      |   |   |   | 175,740,653 |   |
| Other      insurance operations                                            |   |    | 17,628,590       |   |   |   | 18,035,208 |   |
|      Total      assets                            |   | $       | 185,338,726      |   |   | $ | 193,775,861 |   |

| (1)   | Intersegment      revenue eliminations reflect commission paid by Crusader to Unifax      Insurance Systems, Inc., (Unifax) a wholly owned subsidiary of the      Company. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | Intersegment      asset eliminations reflect the elimination of Crusader receivables and      Unifax payables. |
|-----------------|----------------------------------------------------------------------------------------------------------------|

----

----

|                                                     |   | Three Months Ended June 30 |      |   | Six Months Ended June 30 |   |
|----------------------------------------------------------|--------|----------------------------|-----------|--------|--------------------------|--------|
|                                                     |   |                       |      |   | Increase                 |   |   |   |   |   | Increase |   |
|                                                     |   | 2008                       |      |   | 2007                     |   |   | (Decrease) |   |   | 2008 |   |   | 2007 |   |   | (Decrease) |   |
|                                                     |   |                       |      |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      premium earned                                  |   | $                          | 8,580,996 |   |                     | $      | 9,483,545 |   |   | $ | (902,549 | ) |   | $ | 17,505,762 |   |   | $ | 19,192,743 |   |   | $ | (1,686,981 | ) |
|                                                     |   |                       |      |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Less:                                                    |   |                       |      |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Losses      and loss adjustment      expenses       |   |                       | 6,080,589 |   |                     |   | 5,484,106 |   |   |   | 596,483 |   |   |   | 12,276,295 |   |   |   | 11,418,076 |   |   |   | 858,219 |   |
| Policy      acquisition costs                            |   |                       | 2,077,190 |   |                     |   | 2,305,015 |   |   |   | (227,825 | ) |   |   | 4,158,161 |   |   |   | 4,300,595 |   |   |   | (142,434 | ) |
|      Total                      |   |                       | 8,157,779 |   |                     |   | 7,789,121 |   |   |   | 368,658 |   |   |   | 16,434,456 |   |   |   | 15,718,671 |   |   |   | 715,785 |   |
|                                                     |   |                       |      |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Underwriting      Profit (Before      Income Taxes) |   | $                          | 423,217   |   |                     | $      | 1,694,424 |   |   | $ | (1,271,207 | ) |   | $ | 1,071,306 |   |   | $ | 3,474,072 |   |   | $ | (2,402,766 | ) |

----

----

|                                                                                |   | Three Months Ended June 30 |       |   | Six Months Ended June 30 |   |
|-------------------------------------------------------------------------------------|--------|----------------------------|------------|--------|--------------------------|--------|
|                                                                                |   |                       |       |   |                     |   |   | Increase |   |   |   |   |   |   |   |   | Increase |   |
|                                                                                |   | 2008                       |       |   | 2007                     |   |   | (Decrease) |   |   | 2008 |   |   | 2007 |   |   | (Decrease) |   |
|                                                                                |   |                       |       |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Direct      earned premium                                                          |   | $                          | 10,805,540 |   |                     | $      | 12,392,166 |   |   | $ | (1,586,626 | ) |   | $ | 21,952,486 |   |   | $ | 25,132,499 |   |   | $ | (3,180,013 | ) |
| Earned      ceded premium:                                                          |   |                       |       |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Excluding      provisionally  rated ceded premium             |   |                       | 2,230,629  |   |                     |   | 2,943,123 |   |   |   | (712,494 | ) |   |   | 4,526,560 |   |   |   | 5,969,112 |   |   |   | (1,442,552 | ) |
|   Provisionally      rated ceded premium                                  |   |                       | (6,085     | )      |                     |   | (34,502 | ) |   |   |   28,417 |   |   |   | (79,836 | ) |   |   | (29,356 | ) |   |   | (50,480 | ) |
|       Total      earned ceded premium                 |   |                       | 2,224,544  |   |                     |   | 2,908,621 |   |   |   | (684,077 | ) |   |   | 4,446,724 |   |   |   | 5,939,756 |   |   |   | (1,493,032 | ) |
|                                                                                |   |                       |       |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ceding      commission                                                              |   |                       | (668,240   | )      |                     |   | (902,973 | ) |   |   | 234,733 |   |   |   | (1,357,643 | ) |   |   | (1,831,546 | ) |   |   | 473,903 |   |
|                                                                                |   |                       |       |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      earned ceded premium   net      of ceding commission |   | $                          | 1,556,304  |   |                     | $      | 2,005,648 |   |   | $ | (449,344 | ) |   | $ | 3,089,081 |   |   | $ | 4,108,210 |   |   | $ | (1,019,129 | ) |

----

|                                                  |   | Three Months Ended June 30 |        |   | Six Months Ended June 30 |   |
|-------------------------------------------------------|--------|----------------------------|-------------|--------|--------------------------|--------|
|                                                  |   | 2008                       |        |   | 2007                     |   |   | 2008 |   |   | 2007 |   |
|                                                  |   |                       |        |   |                     |   |   |   |   |   |   |   |
| Average      Invested Assets*                         |   | $                          | 147,096,706 |   |                     | $      | 146,915,430 |   |   | $ | 146,222,505 |   |   | $ | 147,105,884 |   |
| Total      Investment Income                          |   | $                          | 1,496,749   |   |                     | $      | 1,701,114 |   |   | $ | 3,119,263 |   |   | $ | 3,361,429 |   |
| Annualized      Yield on Average      Invested Assets |   |                       | 4.1         | %      |                     |   | 4.6 | % |   |   | 4.3 | % |   |   | 4.6 | % |

|   | *      The average is based on the beginning and ending balance of the amortized      cost of the invested assets. |
|--------|--------------------------------------------------------------------------------------------------------------------|

----

|     Maturities      by   Calendar Year |   |  Par Value |        |   |  Amortized Cost |   |        |  Fair Value |   |   | Weighted      Average Yield |   |
|---------------------------------------------------------------------------|--------|----------------------|-------------|--------|----------------------|--------|-------------|------------------|--------|--------|-----------------------------|--------|
|                                                                      |   |                 |        |   |                 |   |        |             |   |   |                        |   |
| December      31, 2008                                                    |   | $                    | 35,825,000  |   |                 | $      | 35,885,620  |             |   | $      | 36,052,343                  |   |   |   | 4.1 | % |
| December      31, 2009                                                    |   |                 | 32,700,000  |   |                 |   | 32,731,574  |             |   |   | 33,379,606                  |   |   |   | 4.8 | % |
| December      31, 2010                                                    |   |                 | 24,200,000  |   |                 |   | 24,250,337  |             |   |   | 24,121,731                  |   |   |   | 2.3 | % |
| December      31, 2011                                                    |   |                 | 7,250,000   |   |                 |   | 7,237,248   |             |   |   | 7,591,953                   |   |   |   | 4.6 | % |
| December      31, 2012                                                    |   |                 | 38,000,000  |   |                 |   | 37,960,659  |             |   |   | 39,702,575                  |   |   |   | 4.4 | % |
| December      31, 2013                                                    |   |                 | 100,000     |   |                 |   | 103,852     |             |   |   | 101,438                     |   |   |   | 2.7 | % |
|    Total                                                   |   | $                    | 138,075,000 |   |                 | $      | 138,169,290 |             |   | $      | 140,949,646                 |   |   |   | 4.1 | % |

|                |   | Market |       |   | Gross           |   |
|---------------------|--------|--------|------------|--------|-----------------|--------|
|                |   | Value  |       |   | Unrealized Loss |   |
|                |   |   |       |   |            |   |
| 0-6      months     |   | $      | 15,499,575 |   |            | $      | 159,826 |   |
| 7-12      months    |   |   | -          |   |            |   | - |   |
| Over      12 months |   |   |  -    |   |            |   |  - |   |
|   Total   |   | $      | 15,499,575 |   |            | $      | 159,826 |   |

|                                                                                                                           |   | Three Months Ended June 30 |      |   | Six Months Ended June 30 |   |
|--------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------|-----------|--------|--------------------------|--------|
|                                                                                                                           |   |                       |      |   |                     |   |   |         Increase |   |   |   |   |   |   |   |   | Increase |   |
|                                                                                                                           |   | 2008                       |      |   | 2007                     |   |   | (Decrease) |   |   | 2008 |   |   | 2007 |   |   | (Decrease) |   |
| Policy      fee income                                                                                                         |   | $                          | 564,162   |   |                     | $      | 633,094 |   |   | $ | (68,932 | ) |   | $ | 1,143,020 |   |   | $ | 1,282,733 |   |   | $ | (139,713 | ) |
| Health      insurance program                                                                                                  |   |                       | 686,419   |   |                     |   | 547,818 |   |   |   | 138,601 |   |   |   | 1,358,877 |   |   |   | 1,048,861 |   |   |   | 310,016 |   |
| Membership      and fee income                                                                                                 |   |                       | 76,132    |   |                     |   | 76,932 |   |   |   | (800 | ) |   |   | 153,049 |   |   |   | 154,076 |   |   |   | (1,027 | ) |
| Other      commission and fee income                                                                                           |   |                       | 6,165     |   |                     |   | 6,010 |   |   |   | 155 |   |   |   | 7,162 |   |   |   | 12,946 |   |   |   | (5,784 | ) |
| Daily      automobile rental insurance program:                                                                           |   |                       |      |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Commission      income (excluding       contingent      commission) |   |                       | 82,515    |   |                     |   | 84,967 |   |   |   | (2,452 | ) |   |   | 166,056 |   |   |   | 169,743 |   |   |   | (3,687 | ) |
|     Contingent      commission                                                                             |   |                       | -         |   |                     |   | - |   |   |   | - |   |   |   |  58,593 |   |   |   |  46,539 |   |   |   | 12,054 |   |
| Total                                                                                                                          |   | $                          | 1,415,393 |   |                     | $      | 1,348,821 |   |   | $ | 66,572 |   |   | $ | 2,886,757 |   |   | $ | 2,714,898 |   |   | $ | 171,859 |   |

----

----

----

Certain statements contained herein, including the sectionentitled “Management’s Discussion and Analysis of Financial Condition andResults of Operations,” that are not historical facts areforward-looking.  These statements, which may be identified byforward-looking words or phrases such as “anticipate,” “believe,” ”expect,”“intend,” “may,” “should,” and “would,” involve risks and uncertainties, many ofwhich are beyond the control of the Company.  Such risks anduncertainties could cause actual results to differ materially from theseforward-looking statements.  Factors which could cause actual resultsto differ materially include underwriting actions not being effective, rateincreases for coverages not being sufficient, premium rate adequacy relating tocompetition or regulation, actual versus estimated claim experience, regulatorychanges or developments, unforeseen calamities, general market conditions, andthe Company’s ability to introduce new profitable products.

|                                                     |   | June      30 2008 |        |   | December      312007 |   |        | Increase (Decrease) |   |
|----------------------------------------------------------|--------|------------------------|-------------|--------|----------------------|--------|-------------|--------------------------|--------|
|                                                     |   |                   |        |   |                 |   |        |                     |   |
| Fixed      maturity bonds (at amortized value)           |   | $                      | 137,769,290 |   |                 | $      | 139,592,208 |                     |   | $ | (1,822,918 | ) |
| Short-term      cash investments (at cost)               |   |                   | 6,927,353   |   |                 |   | 7,356,159   |                     |   |   | (428,806 | ) |
| Certificates      of deposit (over 1 year, at cost)      |   |                   | 400,000     |   |                 |   | 400,000     |                     |   |   | - |   |
|      Total      invested assets |   | $                      | 145,096,643 |   |                 | $      | 147,348,367 |                     |   | $ | (2,251,724 | ) |

| (a)   | On      May 22, 2008, the Company held its Annual Meeting of      Stockholders. |
|-----------------|---------------------------------------------------------------------------------|

| (b)   | Proxies      for the meeting were solicited pursuant to Regulation 14 under the      Securities Exchange Act of 1934; there was no solicitation in opposition      to nominees of the Board of Directors as listed in the Proxy Statement and      all such nominees were elected. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (c)   | At      the meeting, the following persons were elected by the vote indicated as      directors to serve until the next annual meeting of stockholders and until      their successors are duly elected and qualified.  There were no      broker non-votes. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Name                      |     For | Withheld                  |
|---------------------------|-----------------------------|---------------------------|
|                      |                        |                      |
| Erwin      Cheldin        | 4,180,997                   | 1,175,804                 |
| Cary      L. Cheldin      | 4,150,937                   | 1,205,864                 |
| Lester      A. Aaron      | 4,147,415                   | 1,209,386                 |
| George      C. Gilpatrick | 4,169,597                   | 1,187,204                 |
| Terry      L. Kinigstein  | 4,169,297                   | 1,187,504                 |
| Jon      P. Kocourek      | 5,234,260                   |         122,541 |
| David      A. Lewis       | 5,229,888                   |         126,913 |
| Warren      D. Orloff     | 5,233,410                   |         123,391 |
| Donald      B. Urfrig     | 5,234,410                   |         122,391 |

| 31.1 | Certificate      of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a),      as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of      2002. |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 31.2 | Certificate      of Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a),      as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of      2002. |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 32.1 | Certification      of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted      pursuant to Section 906 of the Sarbanes-Oxley Act of  2002. |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 32.2 | Certification      of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted      pursuant to Section 906 of the Sarbanes-Oxley Act of  2002. |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

----

| 31.1 |             Certificate of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule      15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of      2002 (filed herewith) |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 31.2 |             Certificate of Chief Financial Officer pursuant to Rule 13a-14(a) or Rule      15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of      2002 (filed herewith) |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 32.1 |             Certification of Chief Executive Officer pursuant to 18 U.S.C. Section      1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002      (filed herewith) |
|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 32.2 |             Certification of Chief Financial Officer pursuant to 18 U.S.C. Section      1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002      (filed herewith) |
|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|