TABLE OF CONTENTS




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|INCOME STATEMENT                 
|STATEMENT OF COMPREHENSIVE INCOME
|BALANCE SHEET                    
|STATEMENT OF CASH FLOWS          

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



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FORM 10-K

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 1-14094

MEADOWBROOK INSURANCE GROUP, INC.
(Exact name of registrant as specified in its charter)

|                                  |  |                                                
|--------------------------------- |  | -----------------------------------------------
|Michigan
(State of Incorporation) |  | 38-2626206
(I.R.S. Employer Identification No.)

|                                                                              |  |                 
|----------------------------------------------------------------------------- |  | ----------------
|26600 Telegraph Road, Southfield, MI
(Address of principal executive offices) |  | 48034
(Zip Code)

Registrants telephone number, including area code: (248) 358-1100

Securities registered pursuant to Section 12(b) of the Act:

|                                       |  |                                     
|-------------------------------------- |  | ------------------------------------
|Title of Each Class                    |  | Name of Exchange
on Which Registered
|                                       |  |                                     
|Common Stock, $.01 par value per share |  | New York Stock Exchange             

Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter 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 [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrants
knowledge, in definitive proxy or information statements incorporated by reference in Part III of
this Form 10-K or any amendment to this Form 10-K. [X]

The aggregate market value of the voting stock (common stock, $.01 par
value) held by non-affiliates of the registrant was $24,866,277 on March 17,
1999, based on the closing sales price of the Common Stock on such date.

The aggregate number of shares of the Registrants Common Stock, $.01 par
value, outstanding on March 17, 1999 was 8,511,655.

Documents Incorporated by Reference

Certain portions of the registrants proxy statement for the annual
meeting scheduled for May 15, 2000 are incorporated by reference into Part III
of this report and certain portions of the 1999 Annual Report to Shareholders
are incorporated herein by reference into Part II of this report.

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MEADOWBROOK INSURANCE GROUP, INC.

PART I

ITEM 1. BUSINESS

The Company

Meadowbrook Insurance Group, Inc. (the Company) is a Michigan
corporation, which was originally incorporated in 1985. The Company was
formerly known as Star Holding Company. In November 1995, the Company changed
its name and acquired Meadowbrook, Inc. (Meadowbrook). Meadowbrook was
founded in 1955 as Meadowbrook Insurance Agency and was subsequently
incorporated in Michigan in 1965.

The Company serves as a holding company not only for Meadowbrook but also
for Star Insurance Company (Star), Savers Property and Casualty Insurance
Company (Savers) and American Indemnity Insurance Company, Ltd. (American
Indemnity). Star was formed in 1985 as a subsidiary of Star Holding Company.
Star then acquired Savers in 1990, and the Company acquired American Indemnity
in 1994.

Meadowbrook acquired Association Self Insurance Services, Inc. (ASI) of
Montgomery, Alabama in November of 1996. The acquisition was not material to
the Companys results of operations. ASI is a full service risk-management
operation focused on insurance pools and trust funds whose services include
claims, loss control, managed care, and policy issuance. ASIs operations were
consolidated with the Meadowbrooks existing operations in Montgomery, Alabama.

On July 1, 1997, the Company acquired Crest Financial Corporation
(Crest), a California based holding company which formerly owned Williamsburg
National Insurance Company (Williamsburg), an insurance carrier, and Crest
Financial Services, a risk management service company. Crest provides these
services primarily to the trucking industry within California. Effective
December 31, 1999, the Company reorganized its holding structure, which
resulted in Crest assigning Williamsburg to Star.

On April 30, 1998, the Company acquired the business of Villari &
Associates, Inc. and National Support Systems, Inc. (collectively referred to
as Villari). Villari is a Florida based insurance agency, which offers
professional liability products and programs, group health and disability, and
property/casualty products. The business of these two companies now operates
under the name of Meadowbrook Villari Agency.

On July 31, 1998, the Company acquired Florida Preferred Administrators,
Inc. (Florida Preferred), a third party administrator, and Star acquired
Southeastern Holding Corporation, the holding company for an insurance carrier,
Ameritrust Insurance Corporation (Ameritrust), both of which are located in
Sarasota, Florida. Florida Preferred provides a broad range of risk management
services to purchasers of workers compensation insurance from Ameritrust.

On August 6, 1999, the Company acquired the assets of TPA Associates,
Inc., all the outstanding stock of TPA Insurance Agency, Inc., and Preferred
Insurance Agency, Inc. and approximately 94% of the outstanding stock of
Preferred Insurance Company, Ltd. (PICL) (collectively, TPA). TPA is a
program-oriented risk management company that provides risk management services
to self-insured clients, creates and manages alternative risk management
programs, and performs underwriting, policy issuance and loss control services.

Industry Segments

Since 1976, the Company has been developing and managing alternative
market risk management programs for defined client groups and their members.
The alternative market, which developed as a result of historical volatility in
the cost and availability of traditional commercial insurance coverages,
includes a wide range of approaches to financing and managing risk exposures,
such as captives and rent-a-captives, risk retention and risk purchasing
groups, governmental pools and trusts and self-insurance plans. According to an
industry report made in 1999, the alternative market accounts for an estimated
$71.1 billion, or 34%, of the estimated $209.2 billion of United States
property and casualty premium written; and according to industry sources is
expected to reach an estimated $79.1 billion, or 35%, of estimated $229.0 billion
of United States property and casualty premium written in 2001.

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This compares to the traditional property and casualty market
which grew at a 6% compound average growth rate and the Companys gross written
premium which grew at a 20% compound average annual growth rate since 1994. The
Company believes that the alternative market has become the preferred means of
managing property and casualty insurance and that the Company is well
positioned by focusing on alternative risk solutions for agents, brokers, and
insureds of all sizes. Through the Company, these clients now have access to
the kind of sophisticated risk management techniques previously available only to
larger corporations.

General

The Company is a program-oriented risk management company specializing in
alternative risk management solutions for agents, brokers, professional / trade
associations, and insureds of all sizes. The Company provides a broad array of
insurance products and services through its subsidiaries. The Company owns
insurance carriers, which are essential elements of the risk management
process. Management defines its business segments as agency operations and
program business operations based upon the differences in products and services.

The program business segment is engaged primarily in developing and
managing alternative risk management programs for defined client groups and
their members. This includes providing services, such as reinsurance
brokering, risk management consulting, claims handling, and administrative
services, along with various types of property and casualty insurance coverage,
including workers compensation, general liability and commercial multi-peril.
Insurance coverage is primarily provided to associations or similar groups of
members. A program is a set of coverages and services tailored to meet the
specific requirements of a group of clients.

Services provided and insurance lines of business include:

|                                                 |  |                                 
|------------------------------------------------ |  | --------------------------------
|Services                                         |  | Lines of Business               
|                                                 |  |                                 
|- Risk Analysis and Identification               |  | - Workers Compensation         
|                                                
|                                                
|                                                
|                                                
|- Feasibility Studies                            |  | - Commercial Multi-Peril        
|                                                
|                                                
|                                                
|                                                
|- Program and Product Design                     |  | - General Liability             
|                                                
|                                                
|                                                
|                                                
|- Sales, Marketing and Public Relations          |  | - Errors and Omissions          
|                                                
|                                                
|                                                
|                                                
|- Consultation, Education and Training           |  | - Automobile                    
|                                                
|                                                
|                                                
|                                                
|- Captive Formation                              |  | - Owners, Landlord and          
|                                                
|                                                
|                                                
|                                                
|- Captive Management (Onshore and Offshore)      |  | Tenant                          
|                                                
|                                                
|                                                
|                                                
|- Rent-a-Captive                                 |  | - Employment Practices Liability
|                                                
|                                                
|                                                
|                                                
|- Underwriting/Risk Selection                    |  | - Professional Liability        
|                                                
|                                                
|                                                
|                                                
|- Policy Issuance                                |  | - Legal                         
|                                                
|                                                
|                                                
|                                                
|- Reinsurance Brokerage                          |  | - Medical                       
|                                                
|                                                
|                                                
|                                                
|- Claims Handling and Administration             |  | - Real Estate Appraisers        
|                                                
|                                                
|                                                
|                                                
|- Litigation Management                          |  | - Accountants                   
|                                                
|                                                
|                                                
|                                                
|- Accounting and Financial Statement Preparation |  | - Pharmacists                   
|                                                
|                                                
|                                                
|                                                
|- Regulatory Compliance                          |  | - Inland Marine                 
|                                                
|                                                
|                                                
|                                                
|- Actuarial and Loss Reserve Analysis            |  | - Cargo                         
|                                                
|                                                
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|                                                
|- Loss Prevention and Control                    |  | - Watercraft                    
|                                                
|                                                
|                                                
|                                                
|- Audit Support                                  |  | - Product Liability             
|                                                
|                                                
|                                                
|                                                
|- Information Technology and Processing          |  | - Excess Reinsurance            
|                                                
|                                                
|                                                
|                                                
|                                                 |  | - Commercial Property           

Description of Services and Capabilities

Program Design.Prior to implementing a new program, the Company reviews
a significant amount of data, including: financial projections for the
contemplated program; historical loss experience; actuarial studies of the
underlying risks; the creditworthiness of the potential client; and the
availability of reinsurance. A senior management team and associates
representing each of the risk-management disciplines within the Company work
together to design, market and implement new programs. While the Company does
not generate substantial fees for program design services, these services are
an integral part of the Companys program management services.

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Formation and Management of Risk-Bearing Entities.The Company generates
fees by forming and managing risk-bearing entities for clients and agents. The
Company currently manages over thirty one captives and/or rent-a-captives and
holds a minority interest in seven of these captives. The offshore captives are
managed by the Companys subsidiaries in Bermuda and Barbados.

Risk Selection.The Company performs underwriting services for its
clients, its clients captives and certain individual accounts. Compensation
for underwriting services generally is included in the Companys management
fees. The Companys underwriting personnel help develop the proper criteria for
selecting risks, while actuarial and reinsurance personnel evaluate and
recommend the appropriate levels of risk retention. The program is then
tailored according to the requirements of each client.

Reinsurance Brokerage.The Company earns fees by placing excess
reinsurance for its programs. The Companys two reinsurance brokerage
subsidiaries, Meadowbrook Intermediaries, Inc. and Meadowbrook International,
Ltd., place reinsurance (as well as insurance coverage with high deductibles)
for insurance companies, captives and self-insured programs managed by the
Company. Reinsurance is also placed for clients that do not have other business
relationships with the Company.

Loss Control and Prevention.The Company earns fees for loss control
services which are designed to help clients prevent or limit certain loss
events. Through an evaluation of the clients workplace environment, the
Companys loss control specialists assist the client in planning and
implementing a loss prevention program and, in certain cases, provide
educational and training programs for the client.

Claims Handling and Administration.The Company has experience in
handling and managing claims for workers compensation and most other casualty
lines, property and general liability. It handles all claims functions for most
of the programs managed by the Company. The Companys involvement in claims
handling and administration provides feedback to program managers in assessing
the clients risk environment and the overall structure of the program.

Sales and Marketing.The Company markets its programs and services to
associations, groups, local, regional and national insurance agents and
insurance consultants. Once a program has been developed for a particular
association or group, the Company generally then markets the program to members
of the association or group. Sales and marketing efforts include personal
contact, direct mail, telemarketing, advertising, internet based marketing
including affiliations with insurance based web portals (captive.com and
marketscout.com) and the Companys corporate web site (www.meadowbrook.com),
and attendance at seminars and trade and industry conventions.

Customers, Marketing, and Distribution

Fee Based Operations:

Agency.The Company earns commissions through the operation of a retail
property and casualty insurance agency. Formed in 1955 as Meadowbrooks
original business, the insurance agency places principally commercial
insurance, as well as personal property, casualty, life and accident and health
insurance, with more than 50 insurance carriers. The agency has grown to be one
of the largest agencies in Michigan and, with acquisitions, has expanded into
Florida and California.

In total, the Companys agency operations generated commissions of $16.4
million, $14.7 million and $10.6 million for the years ended December 31, 1999,
1998 and 1997, respectively. In addition to its independent retail agency
activities, the Companys insurance agency also earns revenue by serving as the
agent for several of the Companys programs.

Managed Programs.In a managed program, the Company, through Meadowbrook,
earns commission and fee revenue by providing management and other services to
a clients risk-bearing entity, but generally does not share in the operating
results of such programs. The Company believes that its managed programs
provide a stable source of revenue as well as opportunities for revenue growth
without a proportionate increase in expenses. Revenue growth may occur through
the sale of existing managed program products to additional members of the
sponsoring client group, the expansion of coverages and services provided to
existing programs, and the creation of programs for new client groups (such as,
additional municipal associations) with needs that are similar to existing
client groups.

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Managed program services for which Meadowbrook receives fee-based revenues
include: program design and development; underwriting; reinsurance brokerage;
policy administration; loss prevention and control services (including the
provision of specialized law enforcement training); claims and litigation
management; information processing and accounting functions; and general
management oversight of the program on behalf of the sponsoring client group.
Fees received by the Company under its managed programs are generally either in
a fixed amount or based on a percentage of premium serviced.

Meadowbrook specializes in providing managed programs to public entity
associations, and currently manages public entity pools and other captive
insurance entities, which provide insurance coverage for over 2,500
participants, including city, county, township and village governments in five
states. Over the years, Meadowbrook has been able to expand the services
offered under existing programs, as well as to increase the number of
participants in these managed programs.

In addition to municipal associations, Meadowbrook also manages mutual
insurance companies, offshore captives and other insurance entities including
the Companys insurance subsidiaries Star, Savers, Williamsburg, Ameritrust,
and American Indemnity.

In total, Meadowbrook and its subsidiaries employs 712 associates to
service the Companys clients and provide management services to the Insurance
Operations as defined below.

Insurance Operations:

The Companys major insurance subsidiaries, Star, Savers, Ameritrust,
Williamsburg and PICL (collectively referred to as Insurance Operations),
issue insurance policies for fronted, risk-sharing and fully-insured programs.
These companies are complimented by American Indemnity, which offers clients a
rent-a-captive vehicle for risk-sharing programs. The Insurance Operations are
managed by Meadowbrook and therefore have no employees.

The Insurance Operations are authorized to write business, on either an
admitted or surplus lines basis, in fifty states. Through fronted, risk-sharing
and fully insured programs, the Insurance Operations primarily offer workers
compensation, commercial multiple peril, inland marine and other liability. The
Insurance Operations also provide fronting services. For the year ended
December 31, 1999, the workers compensation line of business accounted for
40.9% and 52.8% of gross written premiums and net earned premiums,
respectively.

Star, Savers, Williamsburg and Ameritrust are domiciled in Michigan,
Missouri, California and Florida, respectively. American Indemnity and PICL are Bermuda-based
reinsurance captives.

During 1999, A.M. Best affirmed the A (excellent) rating of Star,
Savers, Williamsburg and Ameritrust. A.M. Best ratings are based upon factors
of concern to policyholders and are not directed toward the protection of
investors. No assurances can be given that in the future A.M. Best will not
reduce or withdraw the ratings of the Companys insurance subsidiaries.

During 1999, Standard & Poors assigned an A (strong) rating of Star,
Savers,, Williamsburg and Ameritrust. Standard & Poors ratings are based upon
factors of concern to policyholders and are not directed toward the protection
of investors. No assurances can be given that in the future Standard & Poor
will not reduce or withdraw the ratings of the Companys insurance
subsidiaries.

Client Risk-Sharing.In a client risk-sharing program, the Company
participates in the operating results of the program, and the client group also
shares in such results through a captive, a rent-a-captive or a
retrospectively-rated program. In many instances, a captive owned by a client
reinsures a portion of the risk on a quota-share basis. In addition to premium revenue and investment income from its participation
in the operating results of the program, the Company may also be compensated
through the receipt of ceding commissions and other fees for policy issuance
services and acquisition costs, captive management services, reinsurance
brokerage, loss prevention services and claims handling and administration
services.

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For financial reporting purposes, ceding commissions are treated as a
reduction in underwriting expenses.

The Companys experience has been that the number of claims and the cost
of losses tend to be lower in risk-sharing programs than with traditional forms
of insurance. The Company believes that client risk-sharing motivates insureds
to focus on loss prevention and control measures and to establish and adhere to
stricter underwriting guidelines. As a result of its experience with
risk-sharing programs, the Insurance Operations have sustained a ten year
average combined ratio of 97.8% and have outperformed the industry by an
average of 10 points. 1999 was the first year of operations in which the
Companys combined ratio exceed the industry combined ratio.

The Company assists the sponsoring group with the formation of the
captive, which is capitalized by contributions from members of the sponsoring
group in exchange for shares of the captive. The captive is generally managed
for a fee by an offshore subsidiary of the Company. The Company works with the
client to determine the amount of risk exposure that will be assumed by the
captive, which varies depending on the captives capitalization, the line of
business, the amount to be retained by the Company and the amount to be
reinsured by excess reinsurers. The Company then issues an insurance policy and
receives premium from the insured. Pursuant to the quota-share reinsurance
agreement with the captive, the Company generally transfers (cedes) a portion
of the retained risk to the captive and pays to the captive its share of the
net premium (after deducting ceding commissions, policy issuance fees, the cost
of excess reinsurance, taxes and other fees and expenses). The Company
generally seeks to cede approximately 50% of its loss exposures, but in some
cases cedes as little as 20% or as much as 80% of its loss exposures. The
Company secures obligations due from captives through the use of funds withheld
trusts or letters of credit. Through its reinsurance intermediary subsidiaries,
the Company obtains excess-of-loss reinsurance, subject to agreed upon limits
and retention levels. The Company generally administers all claims handling
functions, and the captive provides funds to the Company for the payment of the
captives proportionate share of paid claims and claims expenses. The captive
realizes investment income from its capital, unearned premium and loss
reserves, and shares in the underwriting results.

The Company also offers its clients rent-a-captive risk-sharing
programs. These programs allow a client to retain a significant portion of its
own loss exposure without the administrative costs and capital commitment
required to establish and operate its own captive.

In another variation on client risk-sharing, the Company establishes
retrospectively-rated programs for individual accounts. In such a program, the
Company works with the client to develop the appropriate self-insured retention
and loss fund amount and then helps arrange for excess of loss reinsurance. The
client reimburses the Company for all claim payments within the clients
retention. The Company generally earns a management fee (which includes claims
and loss control fees). In most of these programs, the Company also
participates in the operating results of the reinsurance coverage and earns a
ceding commission.

Agent Risk-Sharing.The Company also writes program business on a
risk-sharing basis with agents or brokers. The Company believes that agent
risk-sharing has grown as a result of market volatility and lack of coverage
availability in the traditional market. Risk-sharing is achieved either through
an agent-owned captive, rent-a-captive or through a contingent commission
structure tied to underwriting results. The Company believes that certain
agents and brokers view risk-sharing as a means to recapture lost profit
margins on commissions that have been reduced due to premium reductions in the
soft market and to establish a long-term relationship with an insurer.

The agent may own a captive or purchase an interest in a rent-a-captive,
which acts as a reinsurer on business produced. In some cases, the captives
shareholders may include key producers, subproducers or insureds. In other
circumstances, the agent accepts a lower up-front commission in exchange for a
multi-year contingent commission based on operating results.

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Fully-Insured Programs.In a fully-insured program, the Company earns
premium revenue by providing insurance coverage without a risk-sharing
mechanism. The Company may provide fully-insured programs when it perceives
opportunities for the development of risk-sharing programs in the future.

Surety Bonds.The Company formed a surety bond business unit in late 1993
and began issuing surety bonds for contractors and licensees in 1994. The
Company earned premium revenue on surety bonds issued through general agents
throughout the United States, including a wholly-owned subsidiary of the
Company. General agents were paid commissions and, in some cases, profit
sharing bonuses based upon loss ratios. The general agents had limited
underwriting authority. In marketing payment and performance surety bonds to
clients, the Company generally considered the net worth and working capital
ratios and the clients experience, expertise, financial statements and
historical track record. In certain instances, the Company required collateral
before issuing a surety bond. The form of collateral varied depending upon an
assessment of the risk factors associated with the surety bond. Generally,
collateral consisted of escrowed cash, letters of credit or investment
securities, all of which was held through the term of the bond.

In December of 1996, the Company entered into a five-year joint
underwriting agreement with Connecticut Surety Corporation. The agreement
provided for the transfer of the underwriting risk on the majority of the
Companys existing surety bond business. In addition, Star continues to write,
on a progressively diminishing basis, new surety business, utilizing its
capital and licenses, and Connecticut Surety manages the operations and assumes
the risk.

Dependence on Key Programs

The Company provides alternative risk management programs and services to
certain large client groups and associations and then markets them to their
individual members. In 1999, 1998, and 1997 the Companys top four programs,
excluding the surety bond business, accounted for 26%, 38% and 46%,
respectively, of the Companys total net earned premiums. The loss or
cancellation of any of the Companys significant programs by the relevant
client groups, or the general availability of commercial market coverage to
members of such groups on more favorable terms than provided under the
Companys programs, could have an adverse effect on the Companys results of
operations. The Company has multiple year contracts with many of its clients.

Reserves

The information required by this item is incorporated by reference to
pages 6-8, 26 and 27 of the Companys 1999 Annual Report to Shareholders.

Reserves are computed by the Company based on actuarial principles and
procedures applicable to the lines of business written by the Company. These
reserve calculations are reviewed regularly by management and the Company
engages independent actuaries on an annual basis to express an opinion as to
the adequacy of statutory reserves established by management. These opinions
are filed with the various jurisdictions in which the Company is licensed.
Provisions for inflation are implicitly considered in the reserving process.
For GAAP and statutory purposes, the Companys reserves are carried at the
total estimate for ultimate expected loss without any discount to reflect the
time value of money.

Significant periods of time often elapse between the occurrence of an
insured loss, the reporting of the loss to the Company, and the Companys
payment of that loss. To recognize liabilities for unpaid losses, the Company
establishes reserves as balance sheet liabilities representing estimates of
amounts needed to pay reported and unreported losses and loss adjustment
expenses (LAE).

The following table shows the development of reserves for unpaid losses
and LAE from 1990 through 1999 for the Companys current insurance
subsidiaries.

Due to the Companys adoption of SFAS 113, the bottom portion of the table
shows the impact of reinsurance for the years 1993 through 1999, reconciling
the net reserves shown in the upper portion of the table to gross reserves.

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|                                                         |               |   |                          |       |      |   |        |        |      |   |        |        |      |   |        |        |      |   |                        |        |      |   |         |        |   |   |         |        |   |   |         |         |   |   |         |         |   |   |         |  | 
|-------------------------------------------------------- | ------------- | - | ------------------------ | ----- | ---- | - | ------ | ------ | ---- | - | ------ | ------ | ---- | - | ------ | ------ | ---- | - | ---------------------- | ------ | ---- | - | ------- | ------ | - | - | ------- | ------ | - | - | ------- | ------- | - | - | ------- | ------- | - | - | ------- |  | 
|Analysis of Loss and Loss Adjustment Expense Development
|                                                        
|                                                         |               |   | Years Ended December 31,
|                                                         |               |   |                         
|                                                         |               |   | 1990                     |       | 1991 |   | 1992   |        | 1993 |   | 1994   |        | 1995 |   | 1996   |        | 1997 |   | 1998                   |        | 1999
|                                                         |               |   |                          |       |      |   |        |        |      |   |        |        |      |   |        |        |      |   |                        |        |     
|                                                         |               |   |                          |       |      |   |        |        |      |   |        |        |      |   |        |        |      |   | (Dollars in thousands)
|Reserves for losses
and LAE at end of period             |               | $ | 9,293                    |       |      | $ | 13,964 |        |      | $ | 23,545 |        |      | $ | 35,744 |        |      | $ | 47,149                 |        |      | $ | 64,668  |        |   | $ | 65,775  |        |   | $ | 60,786  |         |   | $ | 84,254  |         |   | $ | 127,500
|                                                        
|                                                        
|                                                        
|                                                        
|Cumulative paid as of                                    |               |   |                          |       |      |   |        |        |      |   |        |        |      |   |        |        |      |   |                        |       
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | 1 year later  |   |                          | 2,877 |      |   |        | 4,326  |      |   |        | 5,420  |      |   |        | 11,172 |      |   |                        | 15,792 |      |   |         | 25,659 |   |   |         | 31,626 |   |   |         | 31,368  |   |   |         | 39,534  |  
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | 2 years later |   |                          | 4,796 |      |   |        | 6,309  |      |   |        | 10,052 |      |   |        | 19,298 |      |   |                        | 26,227 |      |   |         | 42,969 |   |   |         | 49,930 |   |   |         | 47,313  |  
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | 3 years later |   |                          | 5,117 |      |   |        | 7,652  |      |   |        | 13,554 |      |   |        | 23,571 |      |   |                        | 33,227 |      |   |         | 52,222 |   |   |         | 58,362 |  
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | 4 years later |   |                          | 5,971 |      |   |        | 8,954  |      |   |        | 15,598 |      |   |        | 26,700 |      |   |                        | 36,644 |      |   |         | 57,443 |  
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | 5 years later |   |                          | 6,568 |      |   |        | 9,564  |      |   |        | 16,574 |      |   |        | 27,492 |      |   |                        | 37,450 |     
|                                                        
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|                                                        
|                                                        
|                                                         | 6 years later |   |                          | 6,786 |      |   |        | 10,360 |      |   |        | 17,341 |      |   |        | 28,527 |     
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | 7 years later |   |                          | 7,123 |      |   |        | 11,000 |      |   |        | 17,853 |     
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | 8 years later |   |                          | 7,395 |      |   |        | 11,223 |     
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | 9 years later |   |                          | 7,513 |     
|                                                        
|                                                        
|                                                        
|                                                        
|Reserves re-estimated
as of end of year:                
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | 1 year later  |   |                          | 9,939 |      |   |        | 14,693 |      |   |        | 22,609 |      |   |        | 35,354 |      |   |                        | 46,738 |      |   |         | 65,058 |   |   |         | 67,010 |   |   |         | 69,012  |   |   |         | 99,316  |  
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | 2 years later |   |                          | 9,800 |      |   |        | 14,361 |      |   |        | 21,661 |      |   |        | 33,524 |      |   |                        | 45,578 |      |   |         | 65,312 |   |   |         | 69,536 |   |   |         | 73,591  |  
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | 3 years later |   |                          | 9,396 |      |   |        | 12,853 |      |   |        | 20,909 |      |   |        | 33,308 |      |   |                        | 45,255 |      |   |         | 66,692 |   |   |         | 74,796 |  
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | 4 years later |   |                          | 8,758 |      |   |        | 12,649 |      |   |        | 20,623 |      |   |        | 33,685 |      |   |                        | 45,592 |      |   |         | 68,557 |  
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | 5 years later |   |                          | 8,600 |      |   |        | 12,525 |      |   |        | 19,639 |      |   |        | 32,263 |      |   |                        | 43,031 |     
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | 6 years later |   |                          | 8,371 |      |   |        | 12,186 |      |   |        | 19,658 |      |   |        | 31,844 |     
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | 7 years later |   |                          | 7,970 |      |   |        | 12,166 |      |   |        | 19,787 |     
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | 8 years later |   |                          | 7,975 |      |   |        | 12,239 |     
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | 9 years later |   |                          | 7,916 |     
|                                                        
|                                                        
|                                                        
|                                                        
|Cumulative redundancy
(deficiency):                     
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | Dollars       |   | $                        | 1,377 |      |   | $      | 1,725  |      |   | $      | 3,758  |      |   | $      | 3,900  |      |   | $                      | 4,118  |      |   | $       | (3,889 | ) |   | $       | (9,021 | ) |   | $       | (12,805 | ) |   |         | (15,062 | )
|                                                        
|                                                        
|                                                        
|                                                        
|                                                         | Percentage    |   |                          | 14.82 |      |   |        | 12.35  |      |   |        | 15.96  |      |   |        | 10.91  |      |   |                        | 8.73   |      |   |         | -6.01  | % |   |         | -13.71 | % |   |         | -21.07  | % |   |         | -17.88  | %
|                                                        
|                                                        
|                                                        
|                                                        
|Net reserves                                             |               |   |                          |       |      |   |        |        |      |   |        |        |      |   | 35,744 |        |      |   | 47,149                 |        |      |   | 64,668  |        |   |   | 65,775  |        |   |   | 60,786  |         |   |   | 84,254  |         |   |   | 127,500 | 
|                                                        
|                                                        
|                                                        
|                                                        
|Ceded reserves                                           |               |   |                          |       |      |   |        |        |      |   |        |        |      |   | 14,707 |        |      |   | 17,844                 |        |      |   | 22,318  |        |   |   | 26,615  |        |   |   | 38,193  |         |   |   | 64,590  |         |   |   | 101,744 | 
|                                                        
|                                                        
|                                                        
|                                                        
|Gross reserves                                           |               |   |                          |       |      |   |        |        |      |   |        |        |      |   | 50,451 |        |      |   | 64,993                 |        |      |   | 86,986  |        |   |   | 92,390  |        |   |   | 98,979  |         |   |   | 148,844 |         |   |   | 229,244 | 
|                                                         |               |   |                          |       |      |   |        |        |      |   |        |        |      |   |        |        |      |   |                        |        |      |   |         |        |   |   |         |        |   |   |         |         |   |   |         |         |   |   |         | 
|Net re-estimated                                         |               |   |                          |       |      |   |        |        |      |   |        |        |      |   | 31,844 |        |      |   | 43,031                 |        |      |   | 68,557  |        |   |   | 74,796  |        |   |   | 73,591  |         |   |   | 99,316  |        
|                                                        
|                                                        
|                                                        
|                                                        
|Ceded re-estimated                                       |               |   |                          |       |      |   |        |        |      |   |        |        |      |   | 19,026 |        |      |   | 25,159                 |        |      |   | 33,672  |        |   |   | 38,781  |        |   |   | 53,424  |         |   |   | 84,493  |        
|                                                        
|                                                        
|                                                        
|                                                        
|Gross re-estimated                                       |               |   |                          |       |      |   |        |        |      |   |        |        |      |   | 50,870 |        |      |   | 68,190                 |        |      |   | 102,229 |        |   |   | 113,577 |        |   |   | 127,015 |         |   |   | 183,809 |        
|                                                         |               |   |                          |       |      |   |        |        |      |   |        |        |      |   |        |        |      |   |                        |        |      |   |         |        |   |   |         |        |   |   |         |         |   |   |         |         |   |   |        
|Gross cumulative Redundancy
(deficiency)                 |               |   |                          |       |      |   |        |        |      |   |        |        |      | $ | (419   | )      |      | $ | (3,197                 | )      |      | $ | (15,243 | )      |   | $ | (21,187 | )      |   | $ | (28,036 | )       |   | $ | (34,965 | )      
|                                                         |               |   |                          |       |      |   |        |        |      |   |        |        |      |   |        |        |      |   |                        |        |      |   |         |        |   |   |         |        |   |   |         |         |   |   |         |         |   |   |        

The $15.0 million of adverse development in 1999 reflects the impact of
adopting a more conservative reserving philosophy that relies on a
line-of-business analysis to supplement the program specific analysis. The
majority of this development related to programs the Company has discontinued.

The $8.2 million of adverse development in 1998 reflects the impact of
isolated programs including professional liability for two distinct professions
and two workers compensation programs.

Investments

Certain information required by this item is incorporated by reference to
pages 7-8, 10, 21, and 24-26 of the Companys 1999 Annual Report to
Shareholders.

Competition and Pricing

The Company competes both with other providers of alternative risk
management programs and services and with traditional providers of commercial
insurance coverages. Both the alternative risk management and the traditional
property and casualty insurance markets are highly competitive. The Companys
alternative risk management programs and services compete with products and
services offered by insurance companies, other providers of alternative risk
management services (including certain domestic and foreign insurers and
reinsurers and insurance brokers) as well as with self-insurance plans,
captives managed by others, and a variety of other risk-financing vehicles and
mechanisms. These competitive products are offered by other companies that may
have greater financial resources than the Company.

7



---



The market for alternative risk management products and services is
significantly influenced by market conditions affecting the traditional
property and casualty insurance industry. Insurance market conditions
historically have been subject to significant variability due to premium rate
competition, natural disasters and other catastrophic events, judicial trends,
changes in the investment and interest rate environment, regulation and general
economic conditions. Pricing is a primary means of competition in the
commercial insurance market. Competition is also based on the availability and
quality of products, quality and speed of service (including claims service),
financial strength, ratings, distribution systems and technical expertise. The
primary basis for competition among alternative risk management providers
varies with the financial and insurance needs and resources of each potential
insured. Principal factors that are considered by insureds include: an analysis
of the net present-value (after tax) of the cost of financing the insureds
expected level of losses, the amount of excess coverage provided in the event
losses exceed expected levels, cash flow and tax planning considerations, and
the expected quality and consistency of the services to be provided. The
Company believes that it is able to compete based on its experience, the
quality of its products and services, and its program-oriented approach.
However, its ability to successfully compete is dependent upon a number of
factors, many of which, including market and competitive conditions, are
outside of the Companys control.

Regulation

Regulation in General

The Companys insurance subsidiaries are subject to regulation by
government agencies in the states in which they do business. The nature and
extent of such regulation vary from jurisdiction to jurisdiction, but typically
involve prior approval of the acquisition of control of an insurance company or
of any company controlling an insurance company, regulation of certain
transactions entered into by an insurance company with any of its affiliates,
approval of premium rates, forms and policies used for many lines of insurance,
standards of solvency and minimum amounts of capital and surplus which must be
maintained, establishment of reserves required to be maintained for unearned
premium, losses and loss expense or for other purposes, limitations on types
and amounts of investments, restrictions on the size of risks which may be
insured by a single company, licensing of insurers and agents, deposits of
securities for the benefit of policyholders, and the filing of periodic reports
with respect to financial condition and other matters. In addition, state
regulatory examiners perform periodic examinations of insurance companies. Such
regulation is generally intended for the protection of policyholders rather
than security holders.

In addition to the regulatory oversight of the Companys insurance
subsidiaries, the Company is also subject to regulation under the Michigan,
Missouri, California and Florida Insurance Holding Company System Regulatory
Acts (the Holding Company Acts). The Holding Company Acts contain certain
reporting requirements including those requiring the Company, as the ultimate
parent company, to file information relating to its capital structure,
ownership, and financial condition and general business operations of its
insurance subsidiaries. The Holding Company Acts contain special reporting and
prior approval requirements with respect to transactions among affiliates.

Insurance companies are also affected by a variety of state and federal
legislative and regulatory measures and judicial decisions that define and
extend the risks and benefits for which insurance is sought and provided. These
include redefinitions of risk exposure in areas such as product liability,
environmental damage and workers compensation. In addition, individual state
insurance departments may prevent premium rates for some classes of insureds
from reflecting the level of risk assumed by the insurer for those classes.
Such developments may adversely affect the profitability of various lines of
insurance. In some cases, these adverse effects on profitability can be
minimized through re-pricing, if permitted by applicable regulations, of
coverages or limitations or cessation of the affected business.

The Companys reinsurance intermediaries are subject to regulation as
reinsurance intermediaries. Under applicable regulations, the intermediary is
responsible as a fiduciary for funds received for the account of the parties to
the reinsurance transaction and is required to hold such funds in appropriate
bank accounts subject to restrictions on withdrawals and prohibitions on
commingling.

8



---



Insurance Regulation Concerning Change or Acquisition of Control

Star, Savers, Williamsburg and Ameritrust are domestic property and
casualty insurance companies organized, respectively, under the insurance laws
(the Insurance Codes) of Michigan, Missouri, California, and Florida. The
Insurance Codes provide that the acquisition or change of control of a
domestic insurer or of any person that controls a domestic insurer cannot be
consummated without the prior approval of the relevant insurance regulatory
authority. A person seeking to acquire control, directly or indirectly, of a
domestic insurance company or of any person controlling a domestic insurance
company must generally file with the relevant insurance regulatory authority an
application for change of control containing certain information required by
statute and published regulations and provide a copy of such to the domestic
insurer. In all four states, control is generally presumed to exist if any
person, directly or indirectly, owns, controls, holds with the power to vote or
holds proxies representing 10% or more of the voting securities of any other
person.

In addition, many state insurance regulatory laws contain provisions that
require pre-notification to state agencies of a change in control of a
non-domestic admitted insurance company in that state. While such pre-
notification statutes do not authorize the state agency to disapprove the
change of control, such statutes do authorize issuance of a cease and desist
order with respect to the non-domestic admitted insurer if certain conditions
exist such as undue market concentration.

Any future transactions that would constitute a change in control of the
Company would also generally require prior approval by the Insurance
Departments of Michigan, Missouri, California, and Florida and would require
pre-acquisition notification in those states which have adopted pre-acquisition
notification provisions and in which the insurers are admitted. Such
requirements may deter, delay or prevent certain transactions that could be
advantageous to the stockholders of the Company.

Restrictions on Dividends and Risk-Based Capital

The information required by this item is incorporated by reference to
pages 10 and 29-30 of Companys Annual Report to Shareholders.

Effect of Federal Legislation

On November 12, 1999, President Clinton signed into law the Gramm-Leach-Bliley
Financial Services Act (S. 900). This legislation repeals provisions of the 1933 Glass-Stegall Act and amends provisions
of the Bank Holding Company Act to allow affiliations between banks, securities firms and insurance companies through
newly authorized holding companies.  This new law requires the federal Office of the Controller of the Currency (OCC)
which oversees banking regulatory matters and individual state departments of insurance which traditionally oversee regulatory
matters for insurance companies to work together cooperatively and to share information.  However, it is presently unclear
as to how the OCC and individual state departments of insurance will interact and cooperate with each other in practice of
banking, securities and insurance regulation.  Additionally, there are other federal initiatives that could affect the
insurance business in a variety of ways.  Some federal measures that may affect the insurance business include federal government
participation in tort reform, pension regulation, taxation of insurers and reinsurers, safety regulation and required minimum
levels of insurance.

NAIC-IRIS Ratios

The NAICs Insurance Regulatory Information System (IRIS) was developed
by a committee of state insurance regulators and is primarily intended to
assist state insurance departments in executing their statutory mandates to
oversee the financial condition of insurance companies operating in their
respective states. IRIS identifies 11 industry ratios and specifies usual
values for each ratio. Departure from the usual values on four or more ratios
generally leads to inquiries from individual state insurance commissioners.

In 1999, Star had three ratios that varied from the usual value range.
Stars Surplus Aid to Surplus ratio was 16% as opposed to the usual range of
less than 15%. This ratio reflects the impact of the Companys fronting and
risk sharing program business in comparison to the composition of a traditional
insurer which does not have significant fronting or risk sharing business. Stars
Two-year Overall Operating Ratio was 110% which exceeded 100% limit. Excluding
the impact of development on prior year reserves, this ratio would have been
92%. The 1999 development on prior year reserves reflects the impact of
adopting a more conservative reserving philosophy that relies on a
line-of-business analysis to supplement the program specific analysis. The
majority of the development was programs which the Company has discontinued.
The 1998 development reflects the impact of isolated programs including
professional liability for two distinct professions and two workers
compensation programs. The third ratio that fell outside the

9



---



usual range was the Liabilities to Liquid Assets which was 128% compared
to 105%. This ratio reflects the holding company reorganization that resulted
in Crest assigning Williamsburg to Star. Excluding the impact of this
transaction, the ratio would have been 85.7%.

ITEM 2. PROPERTIES

The Company currently leases its corporate offices in Southfield, Michigan
from 26600 Development Associates Limited Partnership. In 1999, the Company
paid rent in the amount of approximately $1,197,941. The term of the lease for
the offices in Southfield expires on September 30, 2004. The Company, through
its subsidiaries, is also a party to various leases for locations in which such
subsidiaries have offices. The Company does not consider any of these leases to
be material.

During 1998, the Company purchased land in close proximity
to its existing offices. The cost of the land was $3.2 million.

ITEM 3. LEGAL PROCEEDINGS

On June 26, 1995, two shareholders and an officer of a former agent (the
Primary Plaintiffs) of Star, and a former spouse of one shareholder and an
employee of the former agent (the Individual Plaintiffs) initiated legal
proceedings against, among others, Star and Meadowbrook in the District Court
for Washoe County, Reno, Nevada. All of the plaintiffs requested injunctive
relief, compensatory damages, punitive and exemplary damages, and attorneys
fees in an unspecified amount. The Nevada Insurance Department revoked the
license of one of the Primary Plaintiffs and one of the Individual Plaintiffs
and denied further licensing of the other Primary Plaintiffs.

Meadowbrook and Star vigorously defended themselves and filed
counterclaims against the Primary and Individual Plaintiffs. On April 1, 1998,
the Court issued an Order dismissing all claims of the Primary Plaintiffs with
prejudice.

On January 12, 1999, the remaining claims of the Individual Plaintiffs and
the counterclaims of Meadowbrook and Star against the Primary and Individual
Plaintiffs were tried. On February 2, 1999, the jury returned a verdict in
favor of Meadowbrook and Star against the Primary and Individual Plaintiffs. In
addition, the jury found against the Individual Plaintiffs and in favor of
Meadowbrook and Star on their remaining claims. On April 21, 1999, the Court
found in favor of Meadowbrook and Star and against the Primary and Individual
Plaintiffs on all outstanding claims for equitable relief. It is not expected
that the outcome of this litigation will have a material impact on the
financial condition of the Company.

A Final Judgment has been entered with the Court.s All Plaintiffs have
filed an appeal with the Nevada Supreme Court.

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

None.

10



---



PART II

ITEM 5. MARKET FOR THE REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS

The information required by this item is incorporated by reference to page
10 of the Companys 1999 Annual Report to Shareholders.

ITEM 6. SELECTED FINANCIAL DATA

The information required by this item is incorporated by reference to page
14 of the Companys 1999 Annual Report to Shareholders.

ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

The information required by this item is incorporated by reference to
pages 5-13 of the Companys 1999 Annual Report to Shareholders.

ITEM 7A. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK

The information required by this item is incorporated by reference to page
12 of the Companys 1999 Annual Report to Shareholders.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The information required by this item is incorporated by reference to page
16-20 of the Companys 1999 Annual Report to Shareholders.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

None

11



---



PART III

Certain information required by Part III is omitted from this Report in
that the Registrant will file a definitive Proxy Statement pursuant to
Regulation 14A (the Proxy Statement) not later than 120 days after the end of
the fiscal year covered by this report and certain information included therein
is incorporated herein by reference. Only those sections of the Proxy Statement
that specifically address the items set forth herein are incorporated by
reference.

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information required by this item is included under the caption
Directors and Executive Officers of the Companys Proxy Statement relating to
the Annual Meeting of Shareholders to be held on May 15, 2000, which is hereby
incorporated by reference.

ITEM 11. EXECUTIVE COMPENSATION

The information required by this item is included under the captions Executive
Compensation, Report of Compensation Committee on Executive Compensation and
Stock Performance Graph of the Companys Proxy Statement relating to the
Annual Meeting of Shareholders to be held on May 15, 2000, which are hereby
incorporated by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information required by this item is included under the caption
Security Ownership of Certain Beneficial Owners and Management of the
Companys Proxy Statement relating to the Annual Meeting of Shareholders to be
held on May 15, 2000, which is hereby incorporated by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required by this item is included under the caption
Directors and Executive Officers of the Companys Proxy Statement relating to
the Annual Meeting of Shareholders to be held on May 15, 2000, which is hereby
incorporated by reference.

12



---



PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(A) The following documents are filed as part of this Report:



|1. |  | List of Financial Statements: The following Consolidated Financial Statements of Meadowbrook
Insurance Group, Inc., the accompanying Notes to Consolidated Financial Statements and Report of
PricewaterhouseCoopers LLP, Independent Accountants, have been incorporated herein by reference to
their entirety, from pages 15-36 of the 1999 Annual Report to Shareholders:
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Report of PricewaterhouseCoopers LLP, Independent Accountants

Consolidated Balance Sheet  December 31, 1999 and 1998

Consolidated Statement of Income  For Years Ended December 31, 1999, 1998 and 1997

Consolidated Statement of Comprehensive Income For Years Ended December 31, 1999, 1998 and 1997

Consolidated Statement of Shareholders Equity  For Years Ended December 31, 1999, 1998, and 1997

Consolidated Statement of Cash Flows  For Years Ended December 31, 1999, 1998 and 1997

Notes to Consolidated Financial Statements



|   |  |                                                                                                                                                                                                                             
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2. |  | Report of Independent Accountants on Financial Statement Schedule Listed Under 14(a)3 of this
Form 10-K (attached on page 16)                                                                                               
|  
|3. |  | Financial Statement Schedule                                                                                                                                                                                                
|   |  |                                                                                                                                                                                                                             
|   |  | Schedule II Condensed Financial Information of
Registrant (attached on pages 17-19)                                                                                                                                         
|   |  |                                                                                                                                                                                                                             
|   |  | Schedules not listed above have been omitted because they are not
applicable or are not required or the information required to be set forth
therein is included in the Consolidated Financial Statements and Notes
thereto.
|   |  |                                                                                                                                                                                                                             
|4. |  | Exhibits: The Exhibits listed on the accompanying Exhibit Index
immediately following the financial statement schedule are filed as part
of, or incorporated by reference into, this Form 10-K.                             

13



---



EXHIBIT INDEX

|        |  |                                                                                                                                                                                                                                                                                                          |  |             
|------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------
|Exhibit
|No.     |  | Description                                                                                                                                                                                                                                                                                              |  | Filing Basis
|        |  |                                                                                                                                                                                                                                                                                                          |  |             
|3.1     |  | Articles of Incorporation of the Company, including Certificate of Amendment to the Articles
of Incorporation                                                                                                                                                                                            |  | *           
|       
|       
|       
|       
|3.2     |  | Amended and Restated Bylaws of the Company.                                                                                                                                                                                                                                                             
|       
|       
|       
|       
|10.1    |  | Employment Agreement between the Company and James R. Parry, Sr. (Parry) dated January 1,
1993.                                                                                                                                                                                                        |  | *           
|       
|       
|       
|       
|10.2    |  | Management Services Agreement and Addendums among the Company, Star, Savers and
Meadowbrook dated January 1, 1998.                                                                                                                                                                                       |  |             
|       
|       
|       
|       
|10.3    |  | Meadowbrook Insurance Group, Inc. 1995 Stock Option Plan.                                                                                                                                                                                                                                                |  | *           
|       
|       
|       
|       
|10.4    |  | Lease between Meadowbrook and 26600 Development Associates Limited Partnership, with fourth
amendment to lease dated March 21, 1995.                                                                                                                                                                     |  | *           
|       
|       
|       
|       
|10.5    |  | Fifth and sixth Amendments to Lease between Meadowbrook and 26600 Development Associates
Limited Partnership dated August 7, 1995 and May 13, 1996.                                                                                                                                                      |  | *           
|       
|       
|       
|       
|10.6    |  | Meadowbrook, Inc. 401(k) Profit Sharing Plan Trust, amended and restated December 31, 1994                                                                                                                                                                                                               |  | *           
|       
|       
|       
|       
|10.7    |  | Employment Agreement, Covenant Not to Compete and Restricted Stock Agreement dated as of
August 1, 1995 between Meadowbrook and Robert A. Engle.                                                                                                                                                         |  | *           
|       
|       
|       
|       
|10.8    |  | Employment Agreement, Covenant Not to Compete and Restricted Stock Agreement dated as of
August 1, 1995 between Meadowbrook and Robert A. Engle, Amendment.                                                                                                                                              |  | *           
|       
|       
|       
|       
|10.9    |  | Stock Purchase Agreement dated August 1, 1995 among the Company, Robert A. Engle, Trustee of
the Robert A. Engle Revocable Trust dated November 24, 1993, Merton J. Segal and certain
other employees of the Company.                                                                                    |  | *           
|       
|       
|       
|       
|10.10   |  | Stock Purchase Agreement dated August 1, 1995 among the Company, Robert A. Engle, Trustee of
the Robert A. Engle Revocable Trust dated November 24, 1993, Merton J. Segal and certain
other employees of the Company, Amendment.                                                                         |  | *           
|       
|       
|       
|       
|10.11   |  | Revolving Credit Agreement between Meadowbrook Insurance Group, Inc. and Comerica Bank dated
as of July 24, 1998                                                                                                                                                                                         |  | ***         
|       
|       
|       
|       
|10.12   |  | Demand Note dated November 9, 1998 among the Company and Robert S. Cubbin and Kathleen D.
Cubbin and Stock Pledge Agreement.                                                                                                                                                                             |  | *****       
|       
|       
|       
|       
|10.13   |  | Employment Agreement between the Company and William J. Lohmeyer, III dated January 25, 1999.                                                                                                                                                                                                            |  | *****       
|       
|       
|       
|       
|10.14   |  | Seventh and eighth Amendments to Lease between Meadowbrook and 26600 Development Associates
Limited Partnership dated February 6, 1998 and September 16, 1999.                                                                                                                                          
|       
|       
|       
|       
|10.15   |  | Amendment No. 1 to Revolving Credit Agreement between Meadowbrook Insurance Group, Inc. and Comerica Bank dated
as of March 27, 2000.                                                                                                                                                                   
|       
|       
|       
|       
|11      |  | Statement re computation of per share earnings.                                                                                                                                                                                                                                                          |  |             
|       
|       
|       
|       
|13      |  | 1999 Annual Report to Shareholders                                                                                                                                                                                                                                                                       |  |             
|       
|       
|       
|       
|21      |  | List of Subsidiaries.                                                                                                                                                                                                                                                                                    |  |             
|       
|       
|       
|       
|23      |  | Consent of Independent Accountants                                                                                                                                                                                                                                                                       |  |             
|       
|       
|       
|       
|24      |  | Power of attorney.                                                                                                                                                                                                                                                                                       |  |             
|       
|       
|       
|       
|27      |  | Financial Data Schedule.                                                                                                                                                                                                                                                                                 |  |             
|       
|       
|       
|       
|28.1    |  | Star Insurance Companys 1999 Schedule P.                                                                                                                                                                                                                                                                |  | **          
|       
|       
|       
|       
|28.2    |  | Savers Property & Casualty Insurance Companys 1999 Schedule P.                                                                                                                                                                                                                                          |  | **          
|       
|       
|       
|       
|28.3    |  | Williamsburg National Insurance Companys 1999 Schedule P.                                                                                                                                                                                                                                               |  | **          
|       
|       
|       
|       
|28.4    |  | Ameritrust Insurance Companys 1999 Schedule P.                                                                                                                                                                                                                                                          |  | **          
|       
|       
|       
|       
|99.1    |  | Rights Agreement, dated as of September 30, 1999, by and between Meadowbrook Insurance
Group, Inc. and First Chicago Trust Company of New York, including the Certificate of
Designation, the form of Rights Certificate and the Summary of Rights attached thereto as
Exhibits A, B and C, respectively |  | ****        



| |  | (*) Incorporated by reference to Form S-1 Registration Statement (No.
33-2626206) of Meadowbrook Insurance Group, Inc. declared effective
November 20, 1995.
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | (**) Submitted in paper format under separate cover; see Form SE filing.                                                                                    
|
| |  | (***) Filed as Exhibit to Form 10Q for the period ending September 30, 1998.                                                                                
|
| |  | (****) Incorporated by reference to Exhibit 99.1 to the Companys Form 8-A
filed with the Securities and Exchange Commission on October 12, 1999.           
|
| |  | (*****) Filed as Exhibit to Form 10K for the year ending December 31, 1998.                                                                                 
|
| |  | (B) Reports on Form 8-K                                                                                                                                     

No reports on Form 8-K were filed by the Registrant during the quarter
ended December 31, 1999.

14



---



MEADOWBROOK INSURANCE GROUP, INC.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, the Registrant has duly caused this Report to be signed
on its behalf by the undersigned, thereunto duly authorized, in Southfield,
Michigan.



| | MEADOWBROOK INSURANCE GROUP,
INC.
| | ---------------------------------



| | By:          **
       ______________________________
| | -----------------------------------------------------



| | Merton J. Segal
Chairman and Chief Executive Officer
(Principal Executive Officer)
| | ----------------------------------------------------------------------------------



| | By: /s/ WILLIAM J. LOHMEYER
       ______________________________
                 Senior Vice President
                Chief Financial Officer
            (Principal
Financial Officer)
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Dated: March 17, 2000

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

|                                                              |  |                                                                                           |  |               
|------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------- |  | --------------
|Signature                                                     |  | Title                                                                                     |  | Date          
|                                                              |  |                                                                                           |  |               
|**

Merton J. Segal                                           |  | Chairman, Chief Executive Officer and
Director (Principal Executive Officer)              |  | March 17, 2000
|                                                             
|/s/ ROBERT S. CUBBIN
Robert S. Cubbin                         |  | President and Director                                                                    |  | March 17, 2000
|                                                             
|**

Joseph C. Henry                                           |  | Executive Vice President and Director                                                     |  | March 17, 2000
|                                                             
|**

William J. Lohmeyer                                       |  | Senior Vice President, Chief Financial Officer
and Director (Principal Financial Officer) |  | March 17, 2000
|                                                             
|**

Hugh W. Greenberg                                         |  | Director                                                                                  |  | March 17, 2000
|                                                             
|**

Irvin F. Swider, Sr.                                      |  | Director                                                                                  |  | March 17, 2000
|                                                             
|**

Bruce E. Thal                                             |  | Director                                                                                  |  | March 17, 2000
|                                                             
|**

Joseph S. Dresner                                         |  | Director                                                                                  |  | March 17, 2000
|                                                             
|**

Herbert Tyner                                             |  | Director                                                                                  |  | March 17, 2000
|                                                             
|**By: /s/ ROBERT S. CUBBIN
Robert S. Cubbin,
Attorney-in-fact

15



---



[PRICEWATERHOUSECOOPERS LLP LETTERHEAD]

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Shareholders of 
Meadowbrook Insurance Group, Inc.:

In our opinion, the consolidated financial statements, which are included on
pages 17 through 36 of the 1999 Annual Report to Shareholders of Meadowbrook
Insurance Group, Inc. and Subsidiaries (the Company), present fairly, in all
material respects, the financial position of the Company at December 31, 1999
and 1998, and the results of their operations and their cash flows for each of
the three years in the period ended December 31, 1999 in conformity with
accounting principles generally accepted in the United States. In addition, in
our opinion, the financial statement schedule listed under Item 14(A)3 of this
Form 10-K, present fairly, in all material respects, the information set forth
therein when read in conjunction with the related consolidated financial
statements. These financial statements and financial statement schedule are the
responsibility of the Companys management; our responsibility is to express an
opinion on these financial statements and financial statement schedule based on
our audits. We conducted our audits of these statements in accordance with
auditing standards generally accepted in the United States, which require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for the opinion expressed above.

PricewaterhouseCoopers LLP
Detroit, Michigan
March 17, 2000

16



---



SCHEDULE II
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
MEADOWBROOK INSURANCE GROUP, INC.
PARENT COMPANY ONLY

INCOME STATEMENT

|                                                       |                  |                          |            |                                  |           |      |            |         |           |   |            |         |         | 
|------------------------------------------------------ | ---------------- | ------------------------ | ---------- | -------------------------------- | --------- | ---- | ---------- | ------- | --------- | - | ---------- | ------- | ------- | 
|                                                       |                  |                          |            | For the Years Ended December 31,
|                                                       |                  |                          |            |                                 
|                                                       |                  |                          |            | 1999                             |           | 1998 |            | 1997   
|                                                       |                  |                          |            |                                  |           |      |            |        
|Revenue                                                |                  | $                        | 71,641     |                                  |           | $    | 11,131     |         |           | $ | 23,970     |        
|                                                      
|                                                      
|                                                      
|                                                      
|Operating expenses:                                   
|                                                      
|                                                      
|                                                      
|                                                      
|                                                       | Interest expense |                          |            | 1,633,060                        |           |      |            | 745,393 |           |   |            | 370,875 |        
|                                                      
|                                                      
|                                                      
|                                                      
|                                                       | Other expenses   |                          |            | 778,984                          |           |      |            | 686,858 |           |   |            | 488,274 |        
|                                                       |                  |                          |            |                                  |           |      |            |         |           |   |            |        
|                                                       |                  | Total Operating Expenses |            |                                  | 2,412,044 |      |            |         | 1,432,251 |   |            |         | 859,149 | 
|                                                       |                  |                          |            |                                  |           |      |            |         |           |   |            |        
|Loss before federal income taxes and subsidiary equity |                  |                          | (2,340,403 | )                                |           |      | (1,421,120 | )       |           |   | (835,179   | )      
|                                                      
|                                                      
|                                                      
|                                                      
|Federal income tax benefit                             |                  |                          | (717,579   | )                                |           |      | (405,093   | )       |           |   | (293,955   | )      
|                                                       |                  |                          |            |                                  |           |      |            |         |           |   |            |        
|Net loss before subsidiary equity earnings             |                  |                          | (1,622,824 | )                                |           |      | (1,016,027 | )       |           |   | (541,224   | )      
|                                                       |                  |                          |            |                                  |           |      |            |         |           |   |            |        
|Subsidiary equity earnings                             |                  |                          | (7,930,403 | )                                |           |      | 6,885,996  |         |           |   | 13,583,680 |        
|                                                       |                  |                          |            |                                  |           |      |            |         |           |   |            |        
|Net (loss) income                                      |                  | $                        | (9,553,227 | )                                |           | $    | 5,869,969  |         |           | $ | 13,042,456 |        
|                                                       |                  |                          |            |                                  |           |      |            |         |           |   |            |        

SCHEDULE II
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
MEADOWBROOK INSURANCE GROUP, INC.
PARENT COMPANY ONLY

STATEMENT OF COMPREHENSIVE INCOME

|                  |                                                |                                                                             |            |                                  |            |      |           |           |         |   |            |            |           |  
|----------------- | ---------------------------------------------- | --------------------------------------------------------------------------- | ---------- | -------------------------------- | ---------- | ---- | --------- | --------- | ------- | - | ---------- | ---------- | --------- | -
|                  |                                                |                                                                             |            | For the Years Ended December 31,
|                  |                                                |                                                                             |            |                                 
|                  |                                                |                                                                             |            | 1999                             |            | 1998 |           | 1997     
|                  |                                                |                                                                             |            |                                  |            |      |           |          
|Net (loss) income |                                                | $                                                                           | (9,553,227 | )                                |            | $    | 5,869,969 |           |         | $ | 13,042,456 |           
|                 
|                 
|                 
|                 
|                  | Other comprehensive
(loss) income, net of tax:
|                 
|                 
|                 
|                 
|                  |                                                | Unrealized (losses) gains on securities:                                    |            |                                  | (6,746,015 | )    |           |           | 919,075 |   |            |            | 3,251,964 |  
|                 
|                 
|                 
|                 
|                  |                                                | Less: reclassification adjustment for losses (gains) included
in net income |            |                                  | 227,201    |      |           |           | (51,608 | ) |            |            | (133,549  | )
|                  |                                                |                                                                             |            |                                  |            |      |           |           |         |   |            |           
|                  | Other comprehensive
(loss) income              |                                                                             |            | (6,518,814                       | )          |      |           | 867,467   |         |   |            | 3,118,415  |          
|                  |                                                |                                                                             |            |                                  |            |      |           |           |         |   |            |           
|                  | Comprehensive (loss) income                    |                                                                             | $          | (16,072,041                      | )          |      | $         | 6,737,436 |         |   | $          | 16,160,871 |          
|                  |                                                |                                                                             |            |                                  |            |      |           |           |         |   |            |           

17



---



SCHEDULE II
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
MEADOWBROOK INSURANCE GROUP, INC.
PARENT COMPANY ONLY

BALANCE SHEET

|                                                                        |                            |                                            |                      |             |             |              |             |             |             |  |  | 
|----------------------------------------------------------------------- | -------------------------- | ------------------------------------------ | -------------------- | ----------- | ----------- | ------------ | ----------- | ----------- | ----------- |  |  | 
|                                                                        |                            |                                            |                      |             |             | December 31,
|                                                                        |                            |                                            |                      |             |             |             
|                                                                        |                            |                                            |                      |             |             | 1999         |             | 1998       
|                                                                        |                            |                                            |                      |             |             |              |             |            
|                                                                        |                            |                                            |                      | ASSETS     
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Cash and cash equivalents                                               |                            | $                                          | 100,371              |             |             | $            | 132,545     |            
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Investment in subsidiaries                                              |                            |                                            | 121,826,962          |             |             |              | 119,961,423 |            
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Receivables from subsidiaries                                           |                            |                                            | 5,032,921            |             |             |              | 7,580,275   |            
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Intangible assets                                                       |                            |                                            | 3,230,832            |             |             |              | 3,290,316   |            
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Other assets                                                            |                            |                                            | 1,683,661            |             |             |              | 966,565     |            
|                                                                        |                            |                                            |                      |             |             |              |             |            
|                                                                        | Total assets               |                                            | $                    | 131,874,747 |             |              | $           | 131,931,124 |            
|                                                                        |                            |                                            |                      |             |             |              |             |            
|                                                                        |                            |                                            |                      | LIABILITIES
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Other liabilities                                                       |                            | $                                          | 537,189              |             |             | $            | 1,338,888   |            
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Line of credit                                                          |                            |                                            | 30,929,606           |             |             |              | 11,024,507  |            
|                                                                        |                            |                                            |                      |             |             |              |             |            
|                                                                        | Total liabilities          |                                            |                      | 31,466,795  |             |              |             | 12,363,395  |            
|                                                                        |                            |                                            |                      |             |             |              |             |            
|                                                                        |                            |                                            | SHAREHOLDERS EQUITY
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Common stock                                                            |                            |                                            | 85,116               |             |             |              | 86,634      |            
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Additional paid-in capital                                              |                            |                                            | 67,907,168           |             |             |              | 71,190,583  |            
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Retained earnings                                                       |                            |                                            | 35,808,987           |             |             |              | 45,105,585  |            
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Note receivable from officer                                            |                            |                                            | (720,251             | )           |             |              | (660,789    | )          
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Unrealized (depreciation) appreciation on available for sale securities |                            |                                            | (2,673,068           | )           |             |              | 3,845,716   |            
|                                                                        |                            |                                            |                      |             |             |              |             |            
|                                                                        | Total shareholders equity |                                            |                      | 100,407,952 |             |              |             | 119,567,729 |            
|                                                                        |                            |                                            |                      |             |             |              |             |            
|                                                                        |                            | Total liabilities and shareholders equity |                      | $           | 131,874,747 |              |             | $           | 131,931,124 | 
|                                                                        |                            |                                            |                      |             |             |              |             |            

18



---



SCHEDULE II
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
MEADOWBROOK INSURANCE GROUP, INC.
PARENT COMPANY ONLY

STATEMENT OF CASH FLOWS

|                                                     |                                  |                                                     |                                                     |             |                                  |            |         |            |           |            |           |            |            |           | 
|---------------------------------------------------- | -------------------------------- | --------------------------------------------------- | --------------------------------------------------- | ----------- | -------------------------------- | ---------- | ------- | ---------- | --------- | ---------- | --------- | ---------- | ---------- | --------- | 
|                                                     |                                  |                                                     |                                                     |             | For the Years Ended December 31,
|                                                     |                                  |                                                     |                                                     |             |                                 
|                                                     |                                  |                                                     |                                                     |             | 1999                             |            | 1998    |            | 1997     
|                                                     |                                  |                                                     |                                                     |             |                                  |            |         |            |          
|Net cash (used in) provided by operating activities: |                                  | $                                                   | (434,781                                            | )           |                                  | $          | 129,569 |            |           | $          | 445,015   |           
|                                                     |                                  |                                                     |                                                     |             |                                  |            |         |            |           |            |           |           
|Cash Flow from Investing Activities:                
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Dividend from subsidiary         |                                                     |                                                     |            |                                  |            |         | 5,000,000  |           |            |           |           |           
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Investment in subsidiaries       |                                                     |                                                     | (16,372,789 | )                                |            |         | (2,944,502 | )         |            |           | (9,513,711 | )         
|                                                     |                                  |                                                     |                                                     |             |                                  |            |         |            |           |            |           |           
|                                                     |                                  | Net cash (used in) provided by investing activities |                                                     |             | (16,372,789                      | )          |         |            | 2,055,498 |            |           |            | (9,513,711 | )        
|                                                     |                                  |                                                     |                                                     |             |                                  |            |         |            |           |            |           |           
|Cash Flow from Financing Activities:                
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Proceeds from borrowings         |                                                     |                                                     | 58,255,494  |                                  |            |         | 5,285,000  |           |            |           | 11,139,507 |           
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Principal payments on borrowings |                                                     |                                                     | (38,350,395 | )                                |            |         | (3,900,000 | )         |            |           | (2,146,940 | )         
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Dividends paid on common stock   |                                                     |                                                     | (1,036,861  | )                                |            |         | (782,861   | )         |            |           | (692,683   | )         
|                                                    
|                                                    
|                                                    
|                                                    
|                                                     | Retirement of common stock       |                                                     |                                                     | (2,092,842  | )                                |            |         | (2,719,657 | )         |            |           | (222,616   | )         
|                                                     |                                  |                                                     |                                                     |             |                                  |            |         |            |           |            |           |           
|                                                     |                                  |                                                     | Net cash provided by (used in) financing activities |             |                                  | 16,775,396 |         |            |           | (2,117,518 | )         |            |            | 8,077,268 | 
|                                                     |                                  |                                                     |                                                     |             |                                  |            |         |            |           |            |           |           
|Increase (decrease) in cash and cash equivalents     |                                  |                                                     | (32,174                                             | )           |                                  |            | 67,549  |            |           |            | (991,428  | )         
|                                                    
|                                                    
|                                                    
|                                                    
|Cash and cash equivalents, beginning of year         |                                  |                                                     | 132,545                                             |             |                                  |            | 64,996  |            |           |            | 1,056,424 |           
|                                                     |                                  |                                                     |                                                     |             |                                  |            |         |            |           |            |           |           
|Cash and cash equivalents, end of year               |                                  | $                                                   | 100,371                                             |             |                                  | $          | 132,545 |            |           | $          | 64,996    |           
|                                                     |                                  |                                                     |                                                     |             |                                  |            |         |            |           |            |           |           

19