|        |
|--------|
|   |

|         |                                                                                          |
|---------|------------------------------------------------------------------------------------------|
| R       | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934     |
|    | For the year ended December 31, 2010                                                     |
|    | OR                                                                                       |
| £ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|    | For the transition period from ___________to ___________                                 |

|                                                        |
|--------------------------------------------------------|
|                                                   |
| FPIC Insurance Group, Inc.                             |
|                                                   |
| (Exact Name of Registrant as Specified in its Charter) |

|                                                                                                                                                                                   |        |                                         |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------|
| FLORIDA                                                                                                                                                                           |
| (State or Other Jurisdiction of Incorporation or Organization)                                                                                                                    |
| 1-11983                                                                                                                                                                           |   | 59-3359111                              |
| (Commission file number)                                                                                                                                                          |   | (IRS Employer Identification No.)  |
| 1000 Riverside Avenue, Suite 800Jacksonville, Florida 32204(Address of Principal Executive Offices)(904) 354-2482(Registrant's Telephone Number, Including Area Code)www.fpic.com |

|                                |                                                                                                                                           |
|--------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------|
| •     | Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes £ No R |

|                                |                                                                                                                                                |
|--------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------|
| •     | Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  Yes £ No R |

|                                |                                                                                                                                                                                                                                                                                                                                                                            |
|--------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •     | 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 R No £ |

|                                |                                                                                                                                                                                                                                                                                                                                                                                     |
|--------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •     | Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes £ 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. R |

|                                |                                                                                                                                                                                                          |
|--------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •     | Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act). |

|        |                   |         |             |   |                 |         |                           |         |
|--------|-------------------|---------|-------------|---|-----------------|---------|---------------------------|---------|
|   | Large Accelerated | £ | Accelerated | R | Non-accelerated | £ | Smaller Reporting Company | £ |

|                                |                                                                                                                                    |
|--------------------------------|------------------------------------------------------------------------------------------------------------------------------------|
| •     | Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes £ No R |

|                                |                                                                                                                                                                                                                                                                                             |
|--------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •     | The aggregate market value of the Registrant's voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of June 30, 2010 was $234,097,110. |

|                                |                                                                                                                         |
|--------------------------------|-------------------------------------------------------------------------------------------------------------------------|
| •     | As of February 22, 2011 there were 8,574,409 shares of the Registrant's Common Stock, $.10 par value, outstanding. |

|        |
|--------|
|   |

----

|            |                                                                                                              |        |
|------------|--------------------------------------------------------------------------------------------------------------|--------|
|       |                                                                                                         | Page   |
| Part I     |                                                                                                         |   |
| Item 1.    | Business                                                                                                     | 1      |
| Item 1A.   | Risk Factors                                                                                                 | 10     |
| Item 1B.   | Unresolved Staff Comments                                                                                    | 14     |
| Item 2.    | Properties                                                                                                   | 15     |
| Item 3.    | Legal Proceedings                                                                                            | 15     |
| Item 4.    | [Removed and Reserved.]                                                                                      | 15     |
|       |                                                                                                         |   |
| Part II    |                                                                                                         |   |
| Item 5.    | Market for Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities | 16     |
| Item 6.    | Selected Financial Data                                                                                      | 18     |
| Item 7.    | Management's Discussion and Analysis of Financial Condition and Results of Operations                        | 20     |
| Item 7A.   | Quantitative and Qualitative Disclosures about Market Risk                                                   | 47     |
| Item 8.    | Financial Statements and Supplementary Data                                                                  | 51     |
| Item 9.    | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure                         | 51     |
| Item 9A.   | Controls and Procedures                                                                                      | 51     |
| Item 9B.   | Other Information                                                                                            | 52     |
|       |                                                                                                         |   |
| Part III   |                                                                                                         |   |
| Item 10.   | Directors, Executive Officers and Corporate Governance                                                       | 52     |
| Item 11.   | Executive Compensation                                                                                       | 52     |
| Item 12.   | Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters               | 52     |
| Item 13.   | Certain Relationships and Related Transactions, and Director Independence                                    | 54     |
| Item 14.   | Principal Accountant Fees and Services                                                                       | 54     |
|       |                                                                                                         |   |
| Part IV    |                                                                                                         |   |
| Item 15.   | Exhibits and Financial Statement Schedules                                                                   | 54     |
|       |                                                                                                         |   |
| Signatures |                                                                                                         | 55     |

----

|        |
|--------|
| Part I |

----

|                                |                              |
|--------------------------------|------------------------------|
| •     | Pursuing disciplined growth; |

|                                |                                                                          |
|--------------------------------|--------------------------------------------------------------------------|
| •     | Maintaining our financial strength and efficiently managing our capital; |

|                                |                                     |
|--------------------------------|-------------------------------------|
| •     | Focusing on key geographic markets; |

|                                |                                                   |
|--------------------------------|---------------------------------------------------|
| •     | Maintaining disciplined underwriting and pricing; |

|                                |                                                               |
|--------------------------------|---------------------------------------------------------------|
| •     | Effectively managing loss costs and operational expenses; and |

|                                |                                                  |
|--------------------------------|--------------------------------------------------|
| •     | Recruiting and retaining experienced management. |

|                                                               |      |         |        |         |        |         |        |
|---------------------------------------------------------------|------|---------|--------|---------|--------|---------|--------|
| (in thousands)                                                | 2010 | 2009(1) | 2008   |
| Net premiums written                                          | $    | 163,873 |   | 146,349 |   | 162,282 |   |
| Statutory surplus of our insurance subsidiaries               | $    | 257,848 |   | 262,600 |   | 242,812 |   |
| Operating leverage (net premiums written / statutory surplus) | 0.6  |    | 0.6    |    | 0.7    |    |

|                             |                                                                                                                                                                                                                                                                                                                                                                                                |
|-----------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (1)     | The 2009 operating leverage shown above includes net premiums written ("NPW") of $2.2 million and statutory surplus of $31.2 million relating to Advocate, MD.  Net premiums written for the full year ended December 31, 2009 relating to Advocate, MD were $24.7 million.  Our 2009 operating leverage would remain at 0.6 when using Advocate, MD's net premiums written for the full year. |

----

|                                |                    |         |        |         |        |         |        |
|--------------------------------|--------------------|---------|--------|---------|--------|---------|--------|
| (in thousands)                 | As of December 31, |
|                           | 2010               | 2009    | 2008   |
| Long-term debt                 | $                  | 46,083  |   | 46,083  |   | 46,083  |   |
| Shareholders' equity           | $                  | 275,291 |   | 279,787 |   | 259,894 |   |
| Ratio of debt to total capital | 14.3               | %       | 14.1   | %       | 15.1   | %       |

|                                                     |                    |        |           |        |           |        |        |
|-----------------------------------------------------|--------------------|--------|-----------|--------|-----------|--------|--------|
| (shown on a settlement date basis)                  | As of December 31, |
|                                                | 2010               | 2009   | 2008      |
| Number of shares repurchased                        | 1,381,961          |   | 1,787,444 |   | 2,202,510 |   |
| Aggregate cost of repurchased shares (in thousands) | $                  | 41,357 |      | 40,385 |      | 66,310 |   |
| Average cost per common share                       | $                  | 29.93  |      | 22.59  |      | 30.11  |   |

|                             |                                                                                                                                                                                                                                                           |
|-----------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (1)     | On a trade date basis, we have repurchased an additional 347,000 shares of our common stock at an aggregate cost of $12.7 million or $36.58 per share and had remaining authority from our Board of Directors to repurchase an additional 414,270 shares. |

|                                |                                                        |
|--------------------------------|--------------------------------------------------------|
| •     | First Professionals, a wholly owned subsidiary of FPIC |

|                                |                                                                                                 |
|--------------------------------|-------------------------------------------------------------------------------------------------|
| •     | The Tenere Group, Inc. (“Tenere”), a wholly owned subsidiary of First Professionals |

|                                |                                               |
|--------------------------------|-----------------------------------------------|
| •     | Intermed, a wholly owned subsidiary of Tenere |

|                                |                                                                |
|--------------------------------|----------------------------------------------------------------|
| •     | Advocate, MD, a wholly owned subsidiary of First Professionals |

|                                |                                                                                                                                |
|--------------------------------|--------------------------------------------------------------------------------------------------------------------------------|
| •     | Advocate, MD Insurance of the Southwest Inc. (“Advocate, MD Insurance”), a wholly owned subsidiary of Advocate, MD |

|                                |                                                                              |
|--------------------------------|------------------------------------------------------------------------------|
| •     | Advocate Insurance Services, Inc., a wholly owned subsidiary of Advocate, MD |

----

|                                |                                                                                                          |
|--------------------------------|----------------------------------------------------------------------------------------------------------|
| •     | Anesthesiologists Professional Assurance Company (“APAC”), a wholly owned subsidiary of FPIC |

|                                |                                                                |
|--------------------------------|----------------------------------------------------------------|
| •     | FPIC Insurance Agency, Inc., a wholly owned subsidiary of FPIC |

|                |                                 |            |        |            |        |            |        |     |        |         |        |     |   |
|----------------|---------------------------------|------------|--------|------------|--------|------------|--------|-----|--------|---------|--------|-----|---|
| (in thousands) | For the year ended December 31, |
|           | 2010                            | % of Total | 2009   | % of Total | 2008   | % of Total |
| Florida        | $                               | 123,934    |   | 65         | %      | 130,796    |   | 77  | %      | 148,130 |   | 80  | % |
| Texas (1)      | 29,563                          |       | 15     | %          | 4,214  |       | 2      | %   | 1,983  |    | 1      | %   |
| Georgia        | 11,982                          |       | 6      | %          | 12,608 |       | 7      | %   | 12,918 |    | 7      | %   |
| Arkansas       | 8,700                           |       | 5      | %          | 10,116 |       | 6      | %   | 10,196 |    | 5      | %   |
| Missouri       | 4,289                           |       | 2      | %          | 4,855  |       | 3      | %   | 6,344  |    | 3      | %   |
| All other      | 12,674                          |       | 7      | %          | 7,804  |       | 5      | %   | 6,259  |    | 4      | %   |
| All states     | $                               | 191,142    |   | 100        | %      | 170,393    |   | 100 | %      | 185,830 |   | 100 | % |

|                             |                                                                                                                                                                                                                                                                                                  |
|-----------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (1)     | 2010 and 2009 DPW in Texas include $27.8 million and $2.4 million in DPW of Advocate, MD Insurance.  For additional information on our acquisition of Advocate, MD in November 2009, see Note 3, Acquisition of Advocate, MD to the consolidated financial statements included elsewhere herein. |

|                                 |        |                                 |         |        |         |        |         |   |
|---------------------------------|--------|---------------------------------|---------|--------|---------|--------|---------|---|
| (in thousands)                  |   | For the year ended December 31, |
|                            |   | 2010                            | 2009    | 2008   |
| Excess of loss reinsurance      |   | $                               | (21,235 | )      | (18,000 | )      | (19,123 | ) |
| Fronting and other programs (1) |   | (6,180                          | )       | (6,102 | )       | (4,425 | )       |
| Total ceded premiums written    |   | $                               | (27,415 | )      | (24,102 | )      | (23,548 | ) |

----

|                |                                 |            |        |            |        |            |        |     |        |         |        |     |   |
|----------------|---------------------------------|------------|--------|------------|--------|------------|--------|-----|--------|---------|--------|-----|---|
| (in thousands) | For the year ended December 31, |
|           | 2010                            | % of Total | 2009   | % of Total | 2008   | % of Total |
| Florida        | $                               | 110,155    |   | 67         | %      | 116,227    |   | 79  | %      | 132,453 |   | 82  | % |
| Texas (1)      | 26,400                          |       | 16     | %          | 3,650  |       | 2      | %   | 1,647  |    | 1      | %   |
| Georgia        | 10,291                          |       | 6      | %          | 10,999 |       | 8      | %   | 11,197 |    | 7      | %   |
| Arkansas       | 7,252                           |       | 4      | %          | 8,482  |       | 6      | %   | 8,644  |    | 5      | %   |
| Missouri       | 3,808                           |       | 2      | %          | 3,772  |       | 3      | %   | 4,930  |    | 3      | %   |
| All other      | 5,967                           |       | 5      | %          | 3,219  |       | 2      | %   | 3,411  |    | 2      | %   |
| All states     | $                               | 163,873    |   | 100        | %      | 146,349    |   | 100 | %      | 162,282 |   | 100 | % |

|                             |                                                                                                                                                                                                                                                                                                  |
|-----------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (1)     | 2010 and 2009 NPW in Texas include $24.9 million and $2.1 million in NPW of Advocate, MD Insurance.  For additional information on our acquisition of Advocate, MD in November 2009, see Note 3, Acquisition of Advocate, MD to the consolidated financial statements included elsewhere herein. |

|                             |        |            |        |            |        |            |     |   |        |        |     |   |
|-----------------------------|--------|------------|--------|------------|--------|------------|-----|---|--------|--------|-----|---|
|                        | 2010   | % of Total | 2009   | % of Total | 2008   | % of Total |
| MPL policyholders by state: |   |       |   |       |   |       |
| Florida                     | 11,566 |       | 62     | %          | 11,910 |       | 65  | % | 11,407 |   | 82  | % |
| Texas                       | 4,364  |       | 23     | %          | 3,745  |       | 20  | % | 180    |   | 1   | % |
| Georgia                     | 793    |       | 4      | %          | 815    |       | 5   | % | 770    |   | 6   | % |
| Arkansas                    | 477    |       | 3      | %          | 622    |       | 3   | % | 528    |   | 4   | % |
| Missouri                    | 516    |       | 3      | %          | 509    |       | 3   | % | 551    |   | 4   | % |
| All other                   | 927    |       | 5      | %          | 684    |       | 4   | % | 466    |   | 3   | % |
| Total                       | 18,643 |       | 100    | %          | 18,285 |       | 100 | % | 13,902 |   | 100 | % |

|                            |        |            |         |            |        |            |         |   |        |        |     |   |
|----------------------------|--------|------------|---------|------------|--------|------------|---------|---|--------|--------|-----|---|
|                       | 2010   | % of Total | 2009    | % of Total | 2008   | % of Total |
| MPL policyholders by type: |   |       |    |       |   |       |
| Physicians                 | 12,457 |       | 67      | %          | 12,390 |       | 68      | % | 9,128  |   | 66  | % |
| Dentists                   | 3,853  |       | 21      | %          | 3,846  |       | 21      | % | 3,714  |   | 27  | % |
| Allied                     | 1,739  |       | 9       | %          | 1,517  |       | 8       | % | 631    |   | 4   | % |
| Optometrist                | 510    |       | 3       | %          | 455    |       | 3       | % | 344    |   | 2   | % |
| Other                      | 84     |       | — | %          | 77     |       | — | % | 85     |   | 1   | % |
| Total policyholders        | 18,643 |       | 100     | %          | 18,285 |       | 100     | % | 13,902 |   | 100 | % |

----

|            |              |      |      |   |    |   |
|------------|--------------|------|------|---|----|---|
|       | December 31, |
|       | 2010         | 2009 | 2008 |
| Nationwide | 94           | %    | 95   | % | 96 | % |
| Florida    | 96           | %    | 95   | % | 96 | % |

|                                |                    |      |      |   |    |   |
|--------------------------------|--------------------|------|------|---|----|---|
|                           | As of December 31, |
| Policy limits of:              | 2010               | 2009 | 2008 |
| $0.25 million per loss or less | 69                 | %    | 70   | % | 69 | % |
| $0.5 million per loss or less  | 83                 | %    | 83   | % | 83 | % |

|                               |                    |      |    |   |
|-------------------------------|--------------------|------|----|---|
|                          | As of December 31, |
| Policy limits of:             | 2010               | 2009 |
| $0.2 million per loss or less | 66                 | %    | 70 | % |
| $0.5 million per loss or less | 91                 | %    | 85 | % |

----

|                      |                  |                                           |
|----------------------|------------------|-------------------------------------------|
| Insurance Subsidiary | Effective Date   | Florida MPL Premium Effective Rate Change |
| First Professionals  | August 1, 2010   | 0.0 percent                               |
| APAC                 | August 1, 2010   | 0.0 percent                               |
| First Professionals  | December 1, 2008 | 12.0 percent decrease                     |
| APAC                 | December 1, 2008 | 12.0 percent decrease                     |
| First Professionals  | December 1, 2007 | 8.5 percent decrease (1)                  |
| APAC                 | December 1, 2007 | 8.5 percent decrease (1)                  |
| First Professionals  | December 1, 2006 | 9.2 percent decrease (1)                  |
| APAC                 | July 1, 2006     | 12.6 percent decrease (1)                 |

|                             |                                                                                                                                                                                                                                                                                                                                                |
|-----------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (1)     | As adjusted to reflect the factor in our rate filings with respect to insurance guaranty fund assessments levied by the Florida OIR.  For additional information on the assessments levied in 2006 and 2007 by the Florida OIR, see Note 19, Commitments and Contingencies to the consolidated financial statements included elsewhere herein. |

----

|        |                                            |        |                                 |
|--------|--------------------------------------------|--------|---------------------------------|
| • | MAG Mutual Insurance Company;              | • | The Doctors Company; and        |
| • | ProAssurance Corporation ("ProAssurance"); | • | The Medical Protective Company. |

|        |                                                                                         |        |                                     |
|--------|-----------------------------------------------------------------------------------------|--------|-------------------------------------|
| • | Texas Medical Liability Trust;                                                          | • | The Medical Protective Company; and |
| • | American Physicians Insurance Company (acquired by ProAssurance in November 2010); | • | Medicus Insurance Company.          |

----

----

|                                                                                                                                                                                                                                     |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Our operations are concentrated in the MPL insurance industry, and our profitability may be adversely affected by current “soft market” conditions and any negative developments and cyclical changes in that industry. |

|                                                                                                                                            |
|--------------------------------------------------------------------------------------------------------------------------------------------|
| We operate in a competitive environment, and our success depends upon our ability to retain existing business and to develop new business. |

|                                                                                                          |
|----------------------------------------------------------------------------------------------------------|
| Our success depends on our ability to underwrite risks accurately and to price our products accordingly. |

----

|                                |                                                    |
|--------------------------------|----------------------------------------------------|
| •     | Competition from other providers of MPL insurance; |

|                                |                                                       |
|--------------------------------|-------------------------------------------------------|
| •     | Price regulation by insurance regulatory authorities; |

|                                |                                                                                             |
|--------------------------------|---------------------------------------------------------------------------------------------|
| •     | Selection and implementation of appropriate rating formulae or other pricing methodologies; |

|                                |                                           |
|--------------------------------|-------------------------------------------|
| •     | Availability of sufficient reliable data; |

|                                |                                                                |
|--------------------------------|----------------------------------------------------------------|
| •     | Uncertainties inherent in estimates and assumptions generally; |

|                                |                                   |
|--------------------------------|-----------------------------------|
| •     | Adverse changes in claim results; |

|                                |                                                     |
|--------------------------------|-----------------------------------------------------|
| •     | Incorrect or incomplete analysis of available data; |

|                                |                                                                                                                                                                                |
|--------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •     | Our ability to predict policyholder retention, investment yields and the duration of our liability for losses and loss adjustment expenses (“LAE”) accurately; and |

|                                |                                                                                                                              |
|--------------------------------|------------------------------------------------------------------------------------------------------------------------------|
| •     | Unanticipated effects of court decisions, legislation, or regulation, including those related to tort and healthcare reform. |

|                                                                                                                                                                                  |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Our results and financial condition may be affected by our failure to establish adequate loss and LAE reserves or by reductions in favorable development of prior year reserves. |

|                                                                                                                                                                                                                                                  |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Our exposure to claims for extra-contractual obligations and losses in excess of policy limits and the unpredictability of court decisions could have a material adverse impact on our financial condition, results of operations or cash flows. |

|                                                                                                                                        |
|----------------------------------------------------------------------------------------------------------------------------------------|
| Significant changes in the healthcare delivery system, through healthcare reform or otherwise, could materially affect our operations. |

----

|                                                                                                                                                                                                                                                                                                                                                                                                  |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| We are heavily regulated by the states in which we operate and are subject to legislative initiatives, regulatory oversight and, indirectly, to pressure from consumer groups and representatives (including the statutorily appointed Florida Insurance Consumer Advocate) and others, that may affect the adequacy of our premium rates; and we may be limited in the way in which we operate. |

|                                |                                               |
|--------------------------------|-----------------------------------------------|
| •     | Premium rates charged to insurance customers; |

|                                |                                                                      |
|--------------------------------|----------------------------------------------------------------------|
| •     | Permitted investments and prescribed statutory accounting practices; |

|                                |                  |
|--------------------------------|------------------|
| •     | Trade practices; |

|                                |                             |
|--------------------------------|-----------------------------|
| •     | Licensing requirements; and |

|                                |                                           |
|--------------------------------|-------------------------------------------|
| •     | Minimum capital and surplus requirements. |

|                                                                                         |
|-----------------------------------------------------------------------------------------|
| Judicial and legislative review of tort reforms could negatively affect our operations. |

|                                                                        |
|------------------------------------------------------------------------|
| We are subject to assessment by state insurance guaranty associations. |

----

|                                                                                                                                                           |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------|
| Our geographic concentration means that our performance may be affected by economic, regulatory and demographic conditions of states in which we operate. |

|                                                                                                                                      |
|--------------------------------------------------------------------------------------------------------------------------------------|
| Our revenues and financial results may fluctuate with interest rates, investment results and developments in the securities markets. |

|                                                  |
|--------------------------------------------------|
| The trading price of our shares may be volatile. |

|                                |                                                                                                        |
|--------------------------------|--------------------------------------------------------------------------------------------------------|
| •     | actual or anticipated variations in our quarterly results, including per share results, of operations; |

|                                |                                                                                                        |
|--------------------------------|--------------------------------------------------------------------------------------------------------|
| •     | the level of our share repurchases and the effect of such repurchases on our per share financial data; |

|                                |                                                                                                  |
|--------------------------------|--------------------------------------------------------------------------------------------------|
| •     | changes in market valuations of companies in the property casualty and MPL insurance industries; |

|                                |                                                                                                         |
|--------------------------------|---------------------------------------------------------------------------------------------------------|
| •     | changes in expectations of future financial performance or changes in estimates of securities analysts; |

|                                |                                                          |
|--------------------------------|----------------------------------------------------------|
| •     | fluctuations in stock market prices and trading volumes; |

|                                |                                                                                                     |
|--------------------------------|-----------------------------------------------------------------------------------------------------|
| •     | our relatively small market capitalization and the relatively low trading volume of our shares; and |

|                                |                                                                                |
|--------------------------------|--------------------------------------------------------------------------------|
| •     | announcements by us or our competitors of acquisitions or strategic alliances. |

|                                                                                                                                                                                                   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Our status as an insurance holding company with no direct operations could adversely affect our ability to fund operations, conduct future share repurchases, or meet our debt obligations.  |

|                                                                                                                                                                          |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| If market conditions cause reinsurance to be more costly or unavailable, we may be required to bear increased risks or reduce the level of our underwriting commitments. |

----

|                                                                                                                                                                                                                        |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| We cannot guarantee that our reinsurers will pay us in a timely fashion, if at all. In addition, we remain primarily liable to our insureds, whether our reinsurers pay or not, and therefore could experience losses. |

|                                                                                                                |
|----------------------------------------------------------------------------------------------------------------|
| Any acquisitions we make could disrupt our business and harm our financial condition or results of operations. |

|                                |                                                                          |
|--------------------------------|--------------------------------------------------------------------------|
| •     | Problems integrating the acquired operations with our existing business; |

|                                |                                                                                             |
|--------------------------------|---------------------------------------------------------------------------------------------|
| •     | Operating and underwriting results of the acquired operations not meeting our expectations; |

|                                |                                                                          |
|--------------------------------|--------------------------------------------------------------------------|
| •     | Diversion of management's time and attention from our existing business; |

|                                |                                                                   |
|--------------------------------|-------------------------------------------------------------------|
| •     | Need for financial resources above our planned investment levels; |

|                                |                                                                                                         |
|--------------------------------|---------------------------------------------------------------------------------------------------------|
| •     | Difficulties in retaining business relationships with agents and policyholders of the acquired company; |

|                                |                                                                                     |
|--------------------------------|-------------------------------------------------------------------------------------|
| •     | Risks associated with entering markets in which we lack extensive prior experience; |

|                                |                                          |
|--------------------------------|------------------------------------------|
| •     | Tax issues associated with acquisitions; |

|                                |                                                                                             |
|--------------------------------|---------------------------------------------------------------------------------------------|
| •     | Acquisition-related disputes, including disputes over contingent consideration and escrows; |

|                                |                                                              |
|--------------------------------|--------------------------------------------------------------|
| •     | Potential loss of key employees of the acquired company; and |

|                                |                                                                 |
|--------------------------------|-----------------------------------------------------------------|
| •     | Potential impairment of related goodwill and intangible assets. |

|                                                         |
|---------------------------------------------------------|
| Our goodwill and intangible assets may become impaired. |

|                                                                                    |
|------------------------------------------------------------------------------------|
| Our business could be adversely affected by the loss of one or more key employees. |

|                                                                                                                                                           |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------|
| If we are unable to maintain a favorable financial strength rating, it may be more difficult for us to write new business or renew our existing business. |

----

|                                              |                                                                                             |                  |                 |                            |        |
|----------------------------------------------|---------------------------------------------------------------------------------------------|------------------|-----------------|----------------------------|--------|
| Description                                  | Location                                                                                    | Type of Property | Owned or Leased | Approximate Square Footage |
| Corporate offices and Insurance subsidiaries | Jacksonville, Florida                                                                       | Offices          | Owned           | 72,000                     |   |
|                                         |                                                                                        |             |            |                       |
| Insurance subsidiaries                       | Plantation, Tampa, Coral Gables and Winter Park, Florida Springfield, MissouriAustin, Texas | Offices          | Leased          | 21,000                     |   |

----

|         |
|---------|
| Part II |

|                |      |       |        |       |        |       |        |       |        |
|----------------|------|-------|--------|-------|--------|-------|--------|-------|--------|
|           | 2010 | 2009  |
|           | High | Low   | High   | Low   |
| First quarter  | $    | 28.23 |   | 23.31 |   | 29.54 |   | 21.17 |   |
| Second quarter | $    | 29.14 |   | 25.51 |   | 25.80 |   | 18.41 |   |
| Third quarter  | $    | 35.24 |   | 24.96 |   | 24.39 |   | 20.06 |   |
| Fourth quarter | $    | 39.24 |   | 34.14 |   | 26.19 |   | 21.94 |   |

|                         |                                  |        |                              |        |                                                                                      |        |                                                                                                    |         |        |        |         |        |
|-------------------------|----------------------------------|--------|------------------------------|--------|--------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------|---------|--------|--------|---------|--------|
| Period                  | Total Number of Shares Purchased |   | Average Price Paid per Share |   | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) |   | Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs at End of Month (1) |
| October 2010            |                             |   |                         |   |                                                                                 |   |                                                                                               |
| Repurchase programs (1) | 14,517                           |   |                         | $      | 34.78                                                                                |   |                                                                                               | 14,517  |   |   | 588,917 |   |
| November 2010           |                             |   |                         |   |                                                                                 |   |                                                                                               |
| Repurchase programs (1) | 117,817                          |   |                         | $      | 36.70                                                                                |   |                                                                                               | 117,817 |   |   | 471,100 |   |
| December 2010           |                             |   |                         |   |                                                                                 |   |                                                                                               |
| Repurchase programs (1) | 209,830                          |   |                         | $      | 37.95                                                                                |   |                                                                                               | 209,830 |   |   | 761,270 |   |
| Total                   | 342,164                          |   |                         | $      | 37.39                                                                                |   |                                                                                               | 342,164 |   |   | 761,270 |   |

|                             |                                                                                                                                                                                                                                                                                                                                  |
|-----------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (1)     | Our Board of Directors approved our share repurchase program in July 2006 and approved increases of 500,000 shares each in December 2006, in July and August 2007, in April, June and November 2008, in March, July and December 2009, and in August and December 2010.  We publicly announced the program on August 8, 2006 and |

----

|                            |               |            |            |            |            |            |        |        |        |        |        |        |        |
|----------------------------|---------------|------------|------------|------------|------------|------------|--------|--------|--------|--------|--------|--------|--------|
|                       | Period Ending |
| Index                      | 12/31/2005    | 12/31/2006 | 12/31/2007 | 12/31/2008 | 12/31/2009 | 12/31/2010 |
| FPIC Insurance Group, Inc. | $             | 100.00     |       | 112.31     |       | 123.86     |   | 126.17 |   | 111.30 |   | 159.77 |   |
| Russell 2000               | $             | 100.00     |       | 118.37     |       | 116.51     |   | 77.15  |   | 98.11  |   | 124.46 |   |
| FPIC Peer Group 2009 (1)   | $             | 100.00     |       | 107.83     |       | 118.00     |   | 118.21 |   | 117.37 |   | 139.98 |   |
| FPIC Peer Group 2010 (2)   | $             | 100.00     |       | 102.63     |       | 112.91     |   | 108.51 |   | 110.42 |   | 124.59 |   |

|                             |                                                                                                            |
|-----------------------------|------------------------------------------------------------------------------------------------------------|
| (1)     | The FPIC Peer Group 2009 includes ProAssurance Corporation, American Physicians Capital, Inc. and American |

----

|                             |                                                                                                                                                                                                        |
|-----------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2)     | The FPIC Peer Group 2010 includes ProAssurance Corporation (American Physicians Capital, Inc. and American Physicians Service Group Inc. were acquired during 2010 and are no longer publicly traded). |

|                                                   |                    |         |        |           |        |         |          |           |        |           |        |
|---------------------------------------------------|--------------------|---------|--------|-----------|--------|---------|----------|-----------|--------|-----------|--------|
| (in thousands)                                    | As of December 31, |
|                                              | 2010               | 2009    | 2008   | 2007      | 2006   |
|                                              |               | (1      | )      |      | (4     | )       | (5), (6) |      |
| Total cash and investments                        | $                  | 707,087 |   | 744,813   |   | 712,665 |     | 782,310   |   | 866,836   |   |
| Total assets                                      | $                  | 986,263 |   | 1,031,483 |   | 997,985 |     | 1,077,022 |   | 1,219,059 |   |
| Liability for losses and loss adjustment expenses | $                  | 520,546 |   | 559,257   |   | 555,848 |     | 585,087   |   | 642,955   |   |
| Long-term debt                                    | $                  | 46,083  |   | 46,083    |   | 46,083  |     | 46,083    |   | 46,083    |   |
| Total liabilities                                 | $                  | 710,972 |   | 751,696   |   | 738,091 |     | 781,425   |   | 933,805   |   |
| Shareholders' equity                              | $                  | 275,291 |   | 279,787   |   | 259,894 |     | 295,597   |   | 285,254   |   |

|                                                       |                                 |               |         |          |         |          |         |               |         |         |        |
|-------------------------------------------------------|---------------------------------|---------------|---------|----------|---------|----------|---------|---------------|---------|---------|--------|
| (in thousands)                                        | For the year ended December 31, |
|                                                  | 2010                            | 2009          | 2008    | 2007     | 2006    |
|                                                  |                            | (1), (2), (3) |    | (2), (3) |    | (2), (4) |    | (2), (5), (6) |    |
| Direct and assumed premiums written                   | $                               | 191,288       |    | 170,451  |    | 185,830  |    | 151,575       |    | 251,424 |   |
| Net premiums written                                  | $                               | 163,873       |    | 146,349  |    | 162,282  |    | 127,943       |    | 222,423 |   |
|                                                  |                            |          |    |     |    |
| Revenues                                              |                            |          |    |     |    |
| Net premiums earned                                   | $                               | 168,085       |    | 156,474  |    | 172,830  |    | 198,899       |    | 226,965 |   |
| Net investment income                                 | 24,941                          |          | 27,749  |     | 30,295  |     | 31,309  |          | 32,242  |    |
| Net realized investment gains (losses)                | 4,148                           |          | 2,565   |     | (13,552 | )        | (565    | )             | 80      |    |
| Other income                                          | 535                             |          | 510     |     | 432     |     | 381     |          | 485     |    |
| Total revenues                                        | 197,709                         |          | 187,298 |     | 190,005 |     | 230,024 |          | 259,772 |    |
|                                                  |                            |          |    |     |    |
| Expenses                                              |                            |          |    |     |    |
| Net losses and loss adjustment expenses               | 97,329                          |          | 92,185  |     | 99,721  |     | 103,852 |          | 151,648 |    |
| Other underwriting expenses                           | 48,547                          |          | 41,376  |     | 37,992  |     | 44,488  |          | 50,983  |    |
| Interest expense on debt                              | 3,614                           |          | 3,620   |     | 3,827   |     | 4,472   |          | 4,291   |    |
| Other expenses                                        | 3,053                           |          | 964     |     | 412     |     | 454     |          | 5,729   |    |
| Total expenses                                        | 152,543                         |          | 138,145 |     | 141,952 |     | 153,266 |          | 212,651 |    |
|                                                  |                            |          |    |     |    |
| Income from continuing operations before income taxes | 45,166                          |          | 49,153  |     | 48,053  |     | 76,758  |          | 47,121  |    |
| Less:  Income tax expense                             | 15,570                          |          | 15,545  |     | 15,953  |     | 25,668  |          | 14,182  |    |
| Income from continuing operations                     | $                               | 29,596        |    | 33,608   |    | 32,100   |    | 51,090        |    | 32,939  |   |

----

|                                                                          |                                 |               |        |          |         |          |        |               |        |        |        |
|--------------------------------------------------------------------------|---------------------------------|---------------|--------|----------|---------|----------|--------|---------------|--------|--------|--------|
| (in thousands, except earnings per common share)                         | For the year ended December 31, |
|                                                                     | 2010                            | 2009          | 2008   | 2007     | 2006    |
|                                                                     |                            | (1), (2), (3) |   | (2), (3) |    | (2), (4) |   | (2), (5), (6) |   |
| Discontinued operations                                                  |                            |          |   |     |    |
| Gain (loss) on disposal of discontinued operations (net of income taxes) | $                               | —       |   | 411      |    | —  |   | (191          | )      | 18,649 |   |
| Discontinued operations                                                  | —                         |          | 411    |     | — |     | (191   | )             | 18,649 |   |
|                                                                     |                            |          |   |     |    |
| Net income                                                               | $                               | 29,596        |   | 34,019   |    | 32,100   |   | 50,899        |   | 51,588 |   |
|                                                                     |                            |          |   |     |    |
| Basic Earnings per Common Share:                                         |                            |          |   |     |    |
| Income from continuing operations                                        | $                               | 3.10          |   | 3.11     |    | 2.53     |   | 3.58          |   | 2.11   |   |
| Discontinued operations                                                  | —                         |          | 0.04   |     | — |     | (0.01  | )             | 1.20   |   |
| Net income                                                               | $                               | 3.10          |   | 3.15     |    | 2.53     |   | 3.57          |   | 3.31   |   |
|                                                                     |                            |          |   |     |    |
| Basic weighted-average shares outstanding                                | 9,537                           |          | 10,801 |     | 12,674  |     | 14,268 |          | 15,577 |   |
|                                                                     |                            |          |   |     |    |
| Diluted Earnings per Common Share:                                       |                            |          |   |     |    |
| Income from continuing operations                                        | $                               | 3.03          |   | 3.05     |    | 2.46     |   | 3.46          |   | 2.04   |   |
| Discontinued operations                                                  | —                         |          | 0.04   |     | — |     | (0.01  | )             | 1.16   |   |
| Net income                                                               | $                               | 3.03          |   | 3.09     |    | 2.46     |   | 3.45          |   | 3.20   |   |
|                                                                     |                            |          |   |     |    |
| Diluted weighted-average shares outstanding                              | 9,761                           |          | 11,026 |     | 13,042  |     | 14,741 |          | 16,121 |   |

|                             |                                                                                                                                                                                                                                                                                                                                                  |
|-----------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (1)     | In November 2009, First Professionals acquired all of the issued and outstanding stock of Advocate, MD. For additional information see Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations and Note 3, Acquisition of Advocate, MD to the consolidated financial statements included elsewhere herein. |

|                             |                                                                                                                                                                                                                                                                                                                                                                              |
|-----------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2)     | Other underwriting expenses include the following with respect to guaranty fund assessments levied by the Florida OIR:   2010: recoveries of $0.3 million; 2009: a charge of $1.2 million (offset by recoveries of $1.2 million); 2008: recoveries of $2.7 million; 2007: charges of $4.2 million (offset by recoveries of $0.7 million); and 2006: charges of $9.4 million. |

|                             |                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|-----------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (3)     | During 2009 and 2008, we recorded pre-tax charges of $2.1 million and $13.5 million, respectively, for certain investments that were deemed other-than-temporarily impaired.  In 2008, we recorded a valuation allowance of $0.7 million against our deferred tax assets associated with these realized losses on investments.  In 2009, the valuation allowance against our deferred tax assets was no longer deemed necessary. |

|                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|-----------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (4)     | Effective January 1, 2007, First Professionals commuted all assumed reinsurance treaties with Physicians' Reciprocal Insurers ("PRI") under which First Professionals acted as a reinsurer.  Under the terms of the commutation agreements, First Professionals paid cash and delivered securities with an aggregate value of $87.7 million to PRI as full settlement of all past and future obligations for policy risks previously reinsured by First Professionals.  The corresponding net liabilities related to these agreements carried by First Professionals totaled $103.4 million.  We recognized an after-tax gain of $9.7 million as a result of the commutation. |

|                             |                                                                                                                                        |
|-----------------------------|----------------------------------------------------------------------------------------------------------------------------------------|
| (5)     | During 2006, we disposed of our insurance management operations and ultimately recognized an $11.6 million after tax-gain on the sale. |

|                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|-----------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (6)     | Effective July 1, 2002, our subsidiary, First Professionals, entered into a finite quota share reinsurance agreement with Hannover Re.  In accordance with the agreement, First Professionals ceded quota share portions of its 2002, 2003 and 2004 DPW, net of other reinsurance.  The agreement was terminated effective June 30, 2004 and commuted effective December 31, 2006.  As a result of the commutation, we no longer incurred the finance charges previously associated with funds withheld under the agreement. |

----

|                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|--------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •     | Income from continuing operations and net income decreased 12 percent and 13 percent (1 percent and 2 percent, respectively, on a per diluted common share basis), respectively for the year ended December 31, 2010 compared to 2009. Our 2009 consolidated results include $0.5 million in income from continuing operations and net income from the operations of Advocate, MD after its acquisition on November 13, 2009.  Our 2009 net income also includes $0.4 million in discontinued operations related to the resolution of a contingency related to certain consolidated tax returns that included the discontinued operations (2005 and prior), and the expiration of federal and state statutes of limitations for those tax years.  The decline in consolidated income from continuing operations is primarily attributable to lower net investment income, higher losses and LAE incurred, other underwriting expenses and other expenses offset by growth in net premiums earned and an increase in net |

----

|                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|--------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •     | The number of professional liability policyholders, excluding policyholders under alternative risk arrangements, increased 2 percent to 18,374 policyholders at December 31, 2010 compared to 18,003 policyholders at December 31, 2009 mainly as a result of an increase in Texas policyholders.  Our national policyholder retention was 94 percent and 95 percent for 2010 and 2009, respectively.   Florida policyholder retention was 96 percent for 2010 and 95 percent for 2009. |

|                                |                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|--------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •     | Net premiums written increased 12 percent for the year ended December 31, 2010 compared to 2009 as a result of the acquisition of Advocate, MD.  Excluding Advocate, MD, net premiums written decreased 4 percent for 2010 compared to 2009, primarily as the result of a higher level of tail premiums written during 2009, differences in business mix and a 2 percent decline in FPIC pre-acquisition policyholders. |

|                                |                                                                                                                                                                                                                                                                                                    |
|--------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •     | During 2008, we launched an initiative to provide management services for alternative risk arrangements.  Direct premiums written for 2010 totaled $5.3 million with 269 policyholders related to such business compared to $4.8 million of direct premiums written and 282 policyholders in 2009. |

|                                |                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|--------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •     | Net premiums earned increased 7 percent for 2010 compared to 2009 as a result of the acquisition of Advocate, MD.  Excluding the impact of the Advocate, MD acquisition, net premiums earned declined 7 percent, primarily as the result of a prior rate decrease in our Florida market that was reflected in net premiums earned during 2010, a higher level of tail premiums written during 2009 and differences in business mix. |

|                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|--------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •     | Net investment income was 10 percent lower in 2010 compared to 2009, primarily as the result of lower average invested assets and a decline in yields on fixed income securities and cash and cash equivalents due to lower prevailing interest rates.  Net realized investment gains increased 62 percent to $4.1 million in 2010.  As of December 31, 2010, we had a total of $707.1 million in cash and investments, of which 89 percent were fixed income securities, 2 percent were equity securities, 8 percent were cash and 1 percent were other invested assets.  Our fixed income portfolio had an overall average credit quality of Aa3, based on the lower of the available credit ratings from Moody's Investment Services (“Moody's”) and Standard & Poor's (“S&P”). |

|                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|--------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •     | As a result of the continuation of favorable loss trends, we recognized favorable net loss development related to previously established reserves of $23.0 million during 2010 compared to $19.0 million in 2009.    Losses and LAE incurred related to the current year increased approximately 8 percent in 2010 primarily as the result of higher net premiums earned resulting from the acquisition of Advocate, MD.  Our 2010 loss ratio (defined as the ratio of net losses and LAE to net premiums earned) related to the current year (excluding prior year development) was 71.6 percent compared to 71.0 percent for 2009. Our current year loss ratio has increased in recent years as a result of lower premium rates. |

|                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|--------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •     | Other underwriting expenses increased 17 percent for 2010 compared to 2009, primarily as the result of the acquisition of Advocate, MD.  Excluding the impact of the Advocate, MD acquisition, other underwriting expenses were essentially level. Our underwriting expense ratio (defined as the ratio of other underwriting expenses to net premiums earned) was 28.9 percent for 2010 compared to 26.5 percent for 2009.  The higher expense ratio for the year 2010 is primarily the result of a prior rate decrease in our Florida market that was reflected in net premiums earned during 2010, higher commission expenses in relation to net premiums earned as compared to 2009 and the acquisition of Advocate, MD. |

|                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|--------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •     | Other expenses increased $2.1 million for 2010 compared to 2009 primarily as a result of the acquisition of Advocate, MD.  Other expenses includes an adjustment of $2.5 million to the contingent consideration expected to be paid to former shareholders of Advocate, MD as a result of Advocate, MD's expected performance related to the attainment of targets for direct premiums written, combined ratio and underwriting profit under the earnout agreement entered into in connection with the acquisition.  Other expenses for 2009 includes transaction costs associated with the acquisition of Advocate, MD of $0.5 million. |

|                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|--------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •     | On a trade date basis, we repurchased 1,393,541 shares of our common stock during 2010 at an average price of $30.13 per share and as of December 31, 2010, had remaining authority from our Board of Directors to repurchase 761,270 more shares under our stock repurchase program.  Through February 22, 2011, we have repurchased an additional 347,000 shares of our common stock, on a trade date basis, at an average price of $36.58 per share and had remaining authority from our Board of Directors to repurchase an additional 414,270 shares as of that date. |

|                                |                                                                                                                                                                                                                                    |
|--------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •     | Book value per common share increased 12 percent to $30.84 as of December 31, 2010 compared to $27.58 as of December 31, 2009.  We received $41.9 million in dividends from our insurance subsidiaries during 2010.  The |

----

|                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|--------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •     | In November 2009, at the request of the FIGA, the Florida OIR levied a 0.8 percent assessment ($1.2 million) against our 2008 Florida direct written premiums with respect to the insolvency of property and casualty insurance companies operating in Florida. The assessment is included in our consolidated other underwriting expenses for 2009. No such assessments were levied in 2010.  As allowed by Florida law, FPIC's insurance subsidiaries are entitled to recoup this assessment from their Florida policyholders and are doing so. |

|                                |                         |                         |                |               |        |                |        |         |        |         |        |         |        |
|--------------------------------|-------------------------|-------------------------|----------------|---------------|--------|----------------|--------|---------|--------|---------|--------|---------|--------|
| (in thousands)                 | As of December 31, 2010 | As of December 31, 2009 |
|                           | Case reserves           | IBNR *                  | Total reserves | Case reserves | IBNR * | Total reserves |
| Gross basis:                   |                    |                    |           |          |   |           |
| Medical professional liability | $                       | 242,082                 |           | 261,635       |   | 503,717        |   | 277,194 |   | 274,572 |   | 551,766 |   |
| Other lines                    | 10,577                  |                    | 6,252          |          | 16,829 |           | 8,549  |    | (1,058 | )       | 7,491  |    |
| Total gross reserves           | $                       | 252,659                 |           | 267,887       |   | 520,546        |   | 285,743 |   | 273,514 |   | 559,257 |   |
|                           |                    |                    |           |          |   |           |
| Net basis:                     |                    |                    |           |          |   |           |
| Medical professional liability | $                       | 209,133                 |           | 162,115       |   | 371,248        |   | 235,346 |   | 189,892 |   | 425,238 |   |
| Other lines                    | 8,804                   |                    | 6,271          |          | 15,075 |           | 2,092  |    | (1,518 | )       | 574    |    |
| Total net reserves             | $                       | 217,937                 |           | 168,386       |   | 386,323        |   | 237,438 |   | 188,374 |   | 425,812 |   |

----

|                                |                                    |
|--------------------------------|------------------------------------|
| •     | Includes case reserve development. |

|                                |                                                           |
|--------------------------------|-----------------------------------------------------------|
| •     | Loss Development Methods (Incurred and Paid Development); |

|                                |                                                  |
|--------------------------------|--------------------------------------------------|
| •     | Berquist-Sherman Case Reserve Adjustment Method; |

|                                |                             |
|--------------------------------|-----------------------------|
| •     | Frequency/Severity Methods; |

|                                |                                                                                                             |
|--------------------------------|-------------------------------------------------------------------------------------------------------------|
| •     | Allocated Loss Adjustment Expense (“ALAE”) Development Methods (Incurred and Paid Development); |

|                                |                                                            |
|--------------------------------|------------------------------------------------------------|
| •     | Bornhuetter-Ferguson Expected Loss Projection Methods; and |

|                                |                            |
|--------------------------------|----------------------------|
| •     | Backward Recursive Method. |

----

|                                |                                                                                                                 |
|--------------------------------|-----------------------------------------------------------------------------------------------------------------|
| •     | Frequency and severity trends (the numbers of claims and how much we expect to ultimately pay for such claims); |

|                                |                                           |
|--------------------------------|-------------------------------------------|
| •     | The timing or pattern of future payments; |

|                                |                                                                            |
|--------------------------------|----------------------------------------------------------------------------|
| •     | The amount of defense costs we will pay for each claim or group of claims; |

|                                |                                                                                                                                                                                                       |
|--------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •     | Frequency of claims closed with indemnity payments (the percentage of claims received that ultimately result in a loss payment versus those that are resolved and closed without a loss payment); and |

|                                |                                                                                |
|--------------------------------|--------------------------------------------------------------------------------|
| •     | Inflationary trends that are expected to bear on future loss and LAE payments. |

|                                                             |                                 |        |        |        |        |        |        |
|-------------------------------------------------------------|---------------------------------|--------|--------|--------|--------|--------|--------|
|                                                        | For the year ended December 31, |
|                                                        | 2010                            | 2009   | 2008   |
| Loss payments - indemnity only (in thousands)               | $                               | 88,283 |   | 74,248 |   | 66,692 |   |
| Number of claims with an indemnity payment                  | 389                             |   | 357    |   | 330    |   |
| Average indemnity payment per claim (in thousands) (1) | $                               | 227    |   | 208    |   | 202    |   |

|                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|-----------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (1)     | The higher average indemnity payment per claim in 2010 resulted from First Professionals resolving two related claims from the 2002 accident year against an insured with payments in excess of each claim's $1.0 million policy limit.  The amount paid by First Professionals in excess of the policy limit was $10.0 million for each of the two claims, net of applicable reinsurance of $2.0 million per claim.  Such amounts were fully contemplated in previously established reserves.  Excluding the impact of these payments, the average indemnity payment per claim declined 16 percent in 2010. |

----

|                                                                    |                                    |                                                                           |                                    |         |        |         |        |
|--------------------------------------------------------------------|------------------------------------|---------------------------------------------------------------------------|------------------------------------|---------|--------|---------|--------|
| (in thousands)    Variable:                    | Hypothetical increase of 5 percent | Liability for Losses and LAE as of December 31, 2010 (net of reinsurance) | Hypothetical decrease of 5 percent |
| Average Indemnity per Claim                                        | $                                  | 395,590                                                                   |                               | 386,323 |   | 377,056 |   |
| Defense Costs per Claim                                            | $                                  | 396,372                                                                   |                               | 386,323 |   | 376,274 |   |
| Change in the Frequency of Claims Closed with an Indemnity Payment | $                                  | 395,590                                                                   |                               | 386,323 |   | 377,056 |   |

|                                                                                                     |        |                                 |         |          |         |          |         |        |
|-----------------------------------------------------------------------------------------------------|--------|---------------------------------|---------|----------|---------|----------|---------|--------|
| (in thousands)                                                                                      |   | For the year ended December 31, |
|                                                                                                |   | 2010                            | 2009    | 2008     |
| Net loss and LAE reserves, January 1                                                                |   | $                               | 425,812 |     | 419,997 |     | 440,752 |   |
|                                                                                                |   |                            |    |     |
| Reserves acquired from acquisition, net of receivable from reinsurers of $5.0 million (1) |   | —                         |    | 33,821   |    | —  |    |
|                                                                                                |   |                            |    |     |
| Incurred Related To:                                                                                |   |                            |    |     |
| Current year                                                                                        |   | 120,302                         |    | 111,176  |    | 116,721  |    |
| Prior years                                                                                         |   | (22,973                         | )       | (18,991  | )       | (17,000  | )       |
| Total incurred                                                                                      |   | 97,329                          |    | 92,185   |    | 99,721   |    |
|                                                                                                |   |                            |    |     |
| Paid Related To:                                                                                    |   |                            |    |     |
| Current Year                                                                                        |   | (13,628                         | )       | (14,262  | )       | (10,922  | )       |
| Prior Years                                                                                         |   | (123,190                        | )       | (105,929 | )       | (109,554 | )       |
| Total paid                                                                                          |   | (136,818                        | )       | (120,191 | )       | (120,476 | )       |
|                                                                                                |   |                            |    |     |
| Net balance, December 31                                                                            |   | 386,323                         |    | 425,812  |    | 419,997  |    |
| Plus reinsurance recoverables                                                                       |   | 134,223                         |    | 133,445  |    | 135,851  |    |
| Gross balance, December 31                                                                          |   | $                               | 520,546 |     | 559,257 |     | 555,848 |   |

|                             |                                                                                                                                                            |
|-----------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (1)     | In November 2009, we acquired all of the issued and outstanding stock of Advocate, MD, which then became a wholly owned subsidiary of First Professionals. |

----

|                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|--------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •     | For accident years 2000 through 2002, we experienced higher than expected claims trends in Missouri.  We also experienced adverse development in our core Florida book primarily due to increases in ALAE for those report years as a result of the stricter claims handling philosophy we implemented in 2001.  This philosophy resulted in increases in ALAE costs for open claims including claims for prior accident years.  Although our claims handling philosophy has positively impacted our overall loss costs, it had an adverse affect on older accident years where higher LAE were not entirely offset by lower indemnity expenses for those years. |

|                                |                                                                                                                                                                                                                                                                                                                                                                      |
|--------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •     | First Professionals resolved two related claims from the 2002 accident year during 2010 against an insured with payments in excess of each claim's $1.0 million policy limit.  The amount paid by First Professionals in excess of the policy limit was $10.0 million for each of the two claims, net of applicable reinsurance of $2.0 million per claim. |

----

|                                |                                                                                                                                                                                                                          |
|--------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •     | For accident years 2000 through 2004, we experienced adverse development related to an assumed reinsurance program. This reinsurance program was placed into run-off in 2004 and was commuted effective January 1, 2007. |

|                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|--------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •     | Accident years 2005 through 2009 have developed favorably overall, in particular accident years 2005 through 2008. We have experienced favorable development on these years as the result of changes in our previous estimates of incident to claim development, payment frequency and / or payment severity for the respective accident years.  A broad range of factors likely contributed to the improved claim results, including tort reform and the stricter claims philosophy we implemented in 2001. |

----

|                                            |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |        |
|--------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| (in millions)                              |   |   |   |   |   |   |   |   |   |   |   |   |
|                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Year Ended December 31,                    |   | 2010   | 2009   | 2008   | 2007   | 2006   | 2005   | 2004   | 2003   | 2002   | 2001   | 2000   |
| Liability for losses and LAE, net          | $      | 386.3  |   | 425.8  |   | 420.0  |   | 440.8  |   | 484.1  |   | 359.6  |   | 301.7  |   | 298.8  |   | 272.0  |   | 238.1  |   | 223.6  |   |
|                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Re-estimated net liability as of:          |   |   |   |   |   |   |   |   |   |   |   |   |
| One Year Later                             |   |   | 402.8  |   | 401.0  |   | 423.8  |   | 454.1  |   | 354.6  |   | 301.7  |   | 299.2  |   | 272.5  |   | 240.5  |   | 232.2  |   |
| Two Years Later                            |   |   |   | 381.0  |   | 404.8  |   | 441.6  |   | 331.6  |   | 299.5  |   | 326.6  |   | 288.2  |   | 250.1  |   | 231.6  |   |
| Three Years Later                          |   |   |   |   | 394.8  |   | 429.6  |   | 345.8  |   | 296.0  |   | 335.2  |   | 320.3  |   | 273.2  |   | 238.8  |   |
| Four Years Later                           |   |   |   |   |   | 433.6  |   | 340.8  |   | 325.2  |   | 335.2  |   | 328.5  |   | 297.4  |   | 255.6  |   |
| Five Years Later                           |   |   |   |   |   |   | 358.9  |   | 325.2  |   | 372.0  |   | 328.5  |   | 301.2  |   | 269.3  |   |
| Six Years Later                            |   |   |   |   |   |   |   | 355.3  |   | 372.0  |   | 353.5  |   | 301.2  |   | 268.8  |   |
| Seven Years Later                          |   |   |   |   |   |   |   |   | 403.6  |   | 353.5  |   | 309.0  |   | 268.8  |   |
| Eight Years Later                          |   |   |   |   |   |   |   |   |   | 377.2  |   | 309.0  |   | 271.6  |   |
| Nine Years Later                           |   |   |   |   |   |   |   |   |   |   | 311.0  |   | 271.6  |   |
| Ten Years Later                            |   |   |   |   |   |   |   |   |   |   |   | 270.7  |   |
|                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Cumulative paid as of:                     |   |   |   |   |   |   |   |   |   |   |   |   |
| One Year Later                             |   |   | 123.1  |   | 105.9  |   | 109.6  |   | 137.3  |   | 17.0   |   | 97.9   |   | 105.7  |   | 89.0   |   | 96.5   |   | 95.9   |   |
| Two Years Later                            |   |   |   | 194.5  |   | 192.1  |   | 231.8  |   | 135.4  |   | 97.5   |   | 192.8  |   | 177.4  |   | 162.9  |   | 163.9  |   |
| Three Years Later                          |   |   |   |   | 255.3  |   | 291.6  |   | 207.5  |   | 189.9  |   | 208.6  |   | 237.4  |   | 214.8  |   | 200.8  |   |
| Four Years Later                           |   |   |   |   |   | 339.8  |   | 257.2  |   | 243.8  |   | 273.0  |   | 265.5  |   | 248.4  |   | 223.0  |   |
| Five Years Later                           |   |   |   |   |   |   | 298.3  |   | 280.4  |   | 313.7  |   | 296.9  |   | 269.9  |   | 240.3  |   |
| Six Years Later                            |   |   |   |   |   |   |   | 316.7  |   | 337.9  |   | 320.2  |   | 281.0  |   | 250.4  |   |
| Seven Years Later                          |   |   |   |   |   |   |   |   | 369.3  |   | 333.6  |   | 293.4  |   | 256.2  |   |
| Eight Years Later                          |   |   |   |   |   |   |   |   |   | 360.4  |   | 337.9  |   | 264.6  |   |
| Nine Years Later                           |   |   |   |   |   |   |   |   |   |   | 302.2  |   | 266.8  |   |
| Ten Years Later                            |   |   |   |   |   |   |   |   |   |   |   | 268.1  |   |
|                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Cumulative net redundancy / (deficiency)   | $      |   | 23.0   |   | 39.0   |   | 46.0   |   | 50.5   |   | 0.7    |   | (53.6  | )      | (104.8 | )      | (105.2 | )      | (72.9  | )      | (47.1  | )      |
| Percent Redundant / (Deficient)            |   |   | 5      | %      | 9      | %      | 10     | %      | 10     | %      | 0      | %      | (18    | )%     | (35    | )%     | (39    | )%     | (31    | )%     | (21    | )%     |
|                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Gross liability-end of year                | $      | 520.5  |   | 559.3  |   | 555.8  |   | 585.1  |   | 643.0  |   | 663.4  |   | 635.1  |   | 574.5  |   | 440.2  |   | 318.5  |   | 281.3  |   |
| Reinsurance recoverables-end of year       |   | 134.2  |   | 133.5  |   | 135.8  |   | 144.3  |   | 158.9  |   | 303.8  |   | 333.4  |   | 275.7  |   | 168.2  |   | 80.4   |   | 57.7   |   |
| Net liability-end of year                  | $      | 386.3  |   | 425.8  |   | 420.0  |   | 440.8  |   | 484.1  |   | 359.6  |   | 301.7  |   | 298.8  |   | 272.0  |   | 238.1  |   | 223.6  |   |
|                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Gross re-estimated liability-latest        | $      |   | 538.2  |   | 521.3  |   | 552.2  |   | 606.1  |   | 675.3  |   | 735.5  |   | 752.4  |   | 637.4  |   | 434.9  |   | 352.1  |   |
| Reinsurance recoverables-latest            |   |   | 135.4  |   | 140.3  |   | 157.4  |   | 172.5  |   | 316.4  |   | 380.2  |   | 348.8  |   | 260.2  |   | 124.0  |   | 81.4   |   |
| Net re-estimated liability-latest          | $      |   | 402.8  |   | 381.0  |   | 394.8  |   | 433.6  |   | 358.9  |   | 355.3  |   | 403.6  |   | 377.2  |   | 310.9  |   | 270.7  |   |
|                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Gross cumulative redundancy / (deficiency) | $      |   | 21.1   |   | 34.5   |   | 32.9   |   | 36.9   |   | (11.9  | )      | (100.4 | )      | (177.9 | )      | (197.2 | )      | (116.4 | )      | (70.8  | )      |

----

|                                |                                                                                                                                                                   |
|--------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •     | Quoted Prices in Active Markets for Identical Assets:  Level 1 includes unadjusted quoted prices for identical assets or liabilities in active markets. |

|                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|--------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •     | Significant Other Observable Inputs: Level 2 includes inputs other than quoted prices included within Level 1 that are observable for assets or liabilities either directly or indirectly.  Level 2 inputs include, among other items, quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, and inputs other than quoted prices that are observable for the asset or liability such as interest rates and yield curves. |

|                                |                                                                                                                                                                                            |
|--------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •     | Significant Unobservable Inputs: Level 3 inputs are unobservable and reflect management's judgments about assumptions that market participants would use in pricing an asset or liability. |

----

|                                |                                                                                                                                                                                                                                 |
|--------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •     | U.S. Treasuries include those securities issued by the U.S government or a U.S. Agency.  These securities have an average credit quality of Aaa and represent approximately 7 percent of our fixed income securities. |

|                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|--------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •     | States, municipalities and political subdivisions include securities issued by state and local governments.  General obligation bonds are backed by the full faith and credit of the issuing entity (e.g., government authority) and revenue bonds are backed by a specific revenue stream.  Lease revenue bonds are backed by specific lease arrangements, where the principal and interest are generally paid from annual appropriations from the governmental entity that benefits from the facility (e.g., school, prison facility).  Pre-refunded bonds are backed by Treasuries and/or Agencies.  These 'sub'-sectors (e.g., general obligation, revenue, lease, pre-refunded) can be taxable or tax-advantaged.  These securities are diversified throughout the U.S, have an average credit quality of Aa1 and represent approximately 32 percent of our fixed income securities. |

|                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|--------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •     | Corporate securities include securities issued by various corporate entities across different industries.  Both investment grade and non-investment grade securities are included within this category.  The average credit quality of investment grade corporate securities is A2 and these securities represent approximately 32 percent of our fixed income securities.  The average credit quality of non-investment grade corporate securities is Ba3 and these securities represent approximately 3 percent of our fixed income securities. |

|                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|--------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •     | Residential mortgage-backed securities include structured securities that are issued based on underlying residential mortgages.  Within this category are bonds that are agency or non-agency related.  Agency related bonds are from the vintage years 1988 through 2010, have an average credit quality of Aaa and represent approximately 14 percent of our fixed income securities.  Non-agency related bonds are from the vintage years 2002 through 2007, have an average credit quality of Baa3 and represent approximately 1 percent of our fixed income securities. |

|                                |                                                                                                                                                                                                                                                                                                                                                                        |
|--------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •     | Commercial mortgage-backed securities ("CMBS") reflect structured securities issued based on underlying commercial mortgages (such as on hotels, malls, or offices) and are from the vintage years 2002 and 2005 through 2008.  These securities have an average credit quality of Aa3 and represent approximately 6 percent of our fixed income securities. |

|                                |                                                                                                                                                                                                                                                                                                             |
|--------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •     | Asset-backed securities include structured securities issued based on underlying assets, primarily automobile loans, credit cards, and home equity lines of credit.  These securities have an average credit quality of Aa1 and represent approximately 4 percent of our fixed income securities. |

|                                |                                                                                                                                                                                                                                                                                           |
|--------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •     | Foreign government securities include securities issued by the Canadian government, a Canadian agency or one of its provinces.  These securities are denominated in U.S. dollars, have an average credit quality of Aa1 and represent 1 percent of our fixed income securities. |

|                                |                                                                                                                                                                                                    |
|--------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •     | Common and preferred equity securities that trade in active markets are classified within Level 1, as fair values are based on quoted market prices for identical assets as of the reporting date. |

|                                |                                                                                                                                                                                                                                                                                                        |
|--------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •     | Preferred equity securities that trade in less active markets are classified within Level 2, as fair values are based on valuation methodologies, the significant inputs into which may include, but are not limited to, benchmark yields, reported trades, broker / dealer quotes and issuer spreads. |

----

|                                |                                                                                                                                                                                                                                                                                   |
|--------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •     | Securities, predominantly mutual funds, held in rabbi trusts maintained by the Company for deferred compensation plans, are included in other invested assets and classified within the valuation hierarchy on the same basis as the Company's actively traded equity securities. |

|                                |                                                                                                                                                                             |
|--------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •     | For our investment in the limited partnership, fair value is classified as Level 3, as it is based on net asset values and financial statements of the limited partnership. |

|                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|--------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •     | The acquisition of Advocate, MD includes a contingent consideration arrangement that provides for additional consideration to be paid by the Company for Advocate, MD based on its attainment of targets with respect to direct written premiums, combined ratio and underwriting profits over a two-year period from the acquisition date.  Up to forty percent of the contingent consideration is payable based on the first year of performance, with any remaining amount payable following the second year of performance.  The range of undiscounted amounts we could pay under the contingent consideration agreement is between $0.9 million and $12.0 million.  Our current estimate of the fair value of the contingent consideration is $9.5 million.  Our measure of the estimated fair value of the contingent consideration is based on significant inputs not observable in the marketplace and is classified as a Level 3 fair value measurement based on accounting guidance.  We recognize a liability for the estimated fair value of acquisition-related contingent consideration using a cash flow model adjusted quarterly for probability weighted targets to be achieved over the earn-out period.  Changes in the calculation of our liability for contingent consideration are reflected as income or expense in the period the change is incurred. |

|                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|--------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •     | Our derivative instruments, principally interest rate swaps, are valued using models that primarily use market observable inputs and are classified as Level 2, as their fair value is largely based on observable inputs over the life of the swaps in a liquid market.  The fair value of the interest rate swaps is calculated by comparing the stream of cash flows on the fixed rate debt versus the stream of cash flows that would arise under the floating rate debt.  The floating and fixed rate cash flows are then discounted to the valuation date by using the three-month London Interbank Offered Rate (“LIBOR”) at the date of the valuation.  Pricing inputs include bid-ask spreads and current market prices for an underlying instrument.  |

|                                |                                                                                |
|--------------------------------|--------------------------------------------------------------------------------|
| •     | The length of time and the extent to which fair value has been less than cost; |

|                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|---------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ◦     | If an investment's fair value declines below cost, we determine if there is adequate evidence to overcome the presumption that the decline is other-than-temporary. Supporting evidence could include a recovery in the investment's fair value subsequent to the date of the statement of financial position, a return of the investee to profitability and the investee's improved financial performance and future prospects (such as earnings trends or recent dividend payments), or the improvement of the financial condition and prospects for the investee's geographic region and industry. |

----

|                                |                                                                                                                                                                                                                                                                                                                                   |
|--------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •     | Issuer-specific considerations, including an event of missed or late payment or default, adverse changes in key financial ratios, an increase in nonperforming loans, a decline in earnings substantially below that of the investee's peers, downgrading of the investee's debt rating or suspension of trading in the security; |

|                                |                                                                                                                                                                                                                                   |
|--------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •     | The occurrence of a significant economic event that may affect the industry in which the investee participates, including a change that might adversely impact the investee's ability to achieve profitability in its operations; |

|                                |                                                                                                                                |
|--------------------------------|--------------------------------------------------------------------------------------------------------------------------------|
| •     | Our intent and ability to hold the investment for a sufficient period to allow for any anticipated recovery in fair value; and |

|                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|--------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •     | With regard to CMBS, we also evaluate key statistics such as breakeven constant default rates and credit enhancement levels. The breakeven constant default rate indicates the percentage of the pool's outstanding loans that must default each and every year for a CMBS class/tranche to experience its first dollar of principal loss. Credit enhancements indicate how much protection, or “cushion,” exists to absorb losses in a particular deal before an actual loss would impact a specific security. |

----

----

|                                     |         |        |         |        |         |        |
|-------------------------------------|---------|--------|---------|--------|---------|--------|
| Assumptions related to ESPP awards: |    |   |    |
|                                | 2010    | 2009   | 2008    |
| Expected volatility                 | 33.06   | %      | 40.04   | %      | 36.02   | %      |
| Expected dividends                  | — |   | — |   | — |   |
| Expected term (in years)       | 1.0     |   | 1.0     |   | 1.0     |   |
| Risk-free rate                      | 0.32    | %      | 0.39    | %      | 3.04    | %      |

|                                                       |                                                   |                                                        |                                                  |      |      |         |        |
|-------------------------------------------------------|---------------------------------------------------|--------------------------------------------------------|--------------------------------------------------|------|------|---------|--------|
| (in thousands)   As of January 1, 2008 | Before Application of Measurement Date Provisions |  Adjustments to Adopt Measurement Date Provisions | After Application of Measurement Date Provisions |
| Retained earnings                                     | $                                                 | 295,586                                                |                                             | (89  | )    | 295,497 |   |
| Accumulated other comprehensive loss                  | (884                                              | )                                                      | (58                                              | )    | (942 | )       |
| Total shareholders' equity                            | $                                                 | 294,702                                                |                                             | (147 | )    | 294,555 |   |

|                                     |      |      |      |   |       |         |
|-------------------------------------|------|------|------|---|-------|---------|
|                                | 2010 | 2009 | 2008 |
| Expected annual rate of return      | 6.8  | %    | 6.8  | % | 6.8   |  % |
| Actual annual rate of return (loss) | 10.2 | %    | 23.8 | % | (30.2 | )%      |

----

|                                              |                                    |                                            |        |      |        |
|----------------------------------------------|------------------------------------|--------------------------------------------|--------|------|--------|
| (in thousands)                               | Impact to Pension Expense, Pre-Tax | Impact to the Projected Benefit Obligation |
| 25 basis point increase in the discount rate | $                                  | (23                                        | )      | (487 | )      |
| 25 basis point decrease in the discount rate | $                                  | 24                                         |   | 515  |   |

----

|                                                       |                               |              |                   |                               |                  |                   |                               |         |         |        |         |         |        |         |         |
|-------------------------------------------------------|-------------------------------|--------------|-------------------|-------------------------------|------------------|-------------------|-------------------------------|---------|---------|--------|---------|---------|--------|---------|---------|
| (in thousands)                                        | FPIC pre-acquisition business | Advocate, MD | 2010 Consolidated | FPIC pre-acquisition business | Advocate, MD (1) | 2009 Consolidated | Percentage Change2010 vs 2009 |
| Direct premiums written (2)                           | $                             | 161,034      |              | 30,108                        |             | 191,142           |                          | 167,900 |    | 2,493  |    | 170,393 |   | 12      |  % |
| Assumed premiums written                              | 146                           |         | —           |                          | 146              |              | 58                            |    | — |   | 58      |    | 152    |  % |
| Ceded premiums written                                | (23,502                       | )            | (3,913            | )                             | (27,415          | )                 | (23,817                       | )       | (285    | )      | (24,102 | )       | (14    | )%      |
| Net premiums written                                  | $                             | 137,678      |              | 26,195                        |             | 163,873           |                          | 144,141 |    | 2,208  |    | 146,349 |   | 12      |  % |
|                                                  |                          |         |              |                          |             |              |                          |
| Net premiums earned                                   | $                             | 142,986      |              | 25,099                        |             | 168,085           |                          | 153,320 |    | 3,154  |    | 156,474 |   | 7       |  % |
| Net investment income                                 | 22,685                        |         | 2,256             |                          | 24,941           |              | 27,324                        |    | 425     |   | 27,749  |    | (10    | )%      |
| Net realized investment gains                         | 3,990                         |         | 158               |                          | 4,148            |              | 2,565                         |    | — |   | 2,565   |    | 62     |  % |
| Other income (2)                                      | 523                           |         | 12                |                          | 535              |              | 510                           |    | — |   | 510     |    | 5      |  % |
| Total revenues                                        | 170,184                       |         | 27,525            |                          | 197,709          |              | 183,719                       |    | 3,579   |   | 187,298 |    | 6      |  % |
|                                                  |                          |         |              |                          |             |              |                          |
| Net losses and LAE                                    | 84,479                        |         | 12,850            |                          | 97,329           |              | 90,132                        |    | 2,053   |   | 92,185  |    | 6      |  % |
| Other underwriting expenses                           | 40,546                        |         | 8,001             |                          | 48,547           |              | 40,631                        |    | 745     |   | 41,376  |    | 17     |  % |
| Interest expense                                      | 3,614                         |         | —           |                          | 3,614            |              | 3,620                         |    | — |   | 3,620   |    | (0     | )%      |
| Other expenses                                        | 109                           |         | 2,944             |                          | 3,053            |              | 901                           |    | 63      |   | 964     |    | 217    |  % |
| Total expenses                                        | 128,748                       |         | 23,795            |                          | 152,543          |              | 135,284                       |    | 2,861   |   | 138,145 |    | 10     |  % |
|                                                  |                          |         |              |                          |             |              |                          |
| Income from continuing operations before income taxes | 41,436                        |         | 3,730             |                          | 45,166           |              | 48,435                        |    | 718     |   | 49,153  |    | (8     | )%      |
| Less: Income tax expense                              | 13,531                        |         | 2,039             |                          | 15,570           |              | 15,293                        |    | 252     |   | 15,545  |    | 0      |  % |
| Income from continuing operations                     | $                             | 27,905       |              | 1,691                         |             | 29,596            |                          | 33,142  |    | 466    |    | 33,608  |   | (12     | )%      |

|                             |                                                 |
|-----------------------------|-------------------------------------------------|
| (1)     | Advocate, MD was acquired on November 13, 2009. |

|                             |                                                                                                                                                                                                                                                                                                                                                             |
|-----------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2)     | Includes $5.3 million, and $4.8 million of DPW related to our initiative to provide management services for alternative risk arrangements for the years ended December 31, 2010 and 2009, respectively.  Management fees of $0.2 million for both the years ended December 31, 2010 and 2009, for such arrangements are included in other income. |

|                                                                          |                               |              |                   |                               |              |                   |                               |        |         |        |        |        |    |         |
|--------------------------------------------------------------------------|-------------------------------|--------------|-------------------|-------------------------------|--------------|-------------------|-------------------------------|--------|---------|--------|--------|--------|----|---------|
|                                                                     | FPIC pre-acquisition business | Advocate, MD | 2010 Consolidated | FPIC pre-acquisition business | Advocate, MD | 2009 Consolidated | Percentage Change2010 vs 2009 |
| Professional liability policyholders                                     | 14,061                        |         | 4,313             |                          | 18,374       |              | 14,339                        |   | 3,664   |   | 18,003 |   | 2  |  % |
| Professional liability policyholders under alternative risk arrangements | 269                           |         | —           |                          | 269          |              | 282                           |   | — |   | 282    |   | (5 | )%      |
| Total professional liability policyholders                               | 14,330                        |         | 4,313             |                          | 18,643       |              | 14,621                        |   | 3,664   |   | 18,285 |   | 2  |  % |

----

|                                                                                        |        |                                 |         |       |         |
|----------------------------------------------------------------------------------------|--------|---------------------------------|---------|-------|---------|
|                                                                                   |   | For the year ended December 31, |
|                                                                                   |   | 2010                            | 2009    |
| Loss ratio                                                                             |   |                            |    |
| Current accident year                                                                  |   | 71.6                            |  % | 71.0  |  % |
| Prior accident years                                                                   |   | (13.7                           | )%      | (12.1 | )%      |
| Calendar year loss ratio                                                               | A      | 57.9                            |  % | 58.9  |  % |
|                                                                                   |   |                            |    |
| Underwriting expense ratio                                                             | B      | 28.9                            |  % | 26.5  |  % |
| Insurance guaranty fund assessments                                                    |   | —                         |  % | 0.7   |  % |
| Insurance guaranty fund recoveries                                                     |   | (0.2                            | )%      | (0.7  | )%      |
| Underwriting expense ratio excluding the impact of insurance guaranty fund recoveries  | C      | 29.1                            |  % | 26.5  |  % |
|                                                                                   |   |                            |    |
| Combined ratio (Sum of A+B)                                                            |   | 86.8                            |  % | 85.4  |  % |
|                                                                                   |   |                            |    |
| Combined ratio excluding the impact of insurance guaranty fund recoveries (Sum of A+C) |   | 87.0                            |  % | 85.4  |  % |

----

|                                                               |                               |              |                   |                               |                       |                   |                                |         |         |        |        |         |        |         |         |
|---------------------------------------------------------------|-------------------------------|--------------|-------------------|-------------------------------|-----------------------|-------------------|--------------------------------|---------|---------|--------|--------|---------|--------|---------|---------|
| (in thousands)                                                | FPIC pre-acquisition business | Advocate, MD | 2010 Consolidated | FPIC pre-acquisition business | Advocate, MD (1) | 2009 Consolidated | Percentage Change 2010 vs 2009 |
| Net paid losses                                               | $                             | 81,343       |              | 7,222                         |                  | 88,565            |                           | 73,406  |    | 1,586  |   | 74,992  |   | 18      |  % |
| Less: net paid losses on assumed business in run-off          | 282                           |         | —           |                          | 282                   |              | 744                            |    | — |   | 744    |    | (62    | )%      |
| Net paid losses excluding assumed business in run-off         | 81,061                        |         | 7,222             |                          | 88,283                |              | 72,662                         |    | 1,586   |   | 74,248 |    | 19     |  % |
|                                                          |                          |         |              |                          |                  |              |                           |
| Net paid LAE                                                  | 41,808                        |         | 6,445             |                          | 48,253                |              | 44,511                         |    | 688     |   | 45,199 |    | 7      |  % |
| Less: net paid LAE on assumed business in run-off             | 9                             |         | —           |                          | 9                     |              | 8                              |    | — |   | 8      |    | 13     |  % |
| Net paid LAE excluding assumed business in run-off            | 41,799                        |         | 6,445             |                          | 48,244                |              | 44,503                         |    | 688     |   | 45,191 |    | 7      |  % |
|                                                          |                          |         |              |                          |                  |              |                           |
| Net paid losses and LAE excluding assumed business in run-off | $                             | 122,860      |              | 13,667                        |                  | 136,527           |                           | 117,165 |    | 2,274  |   | 119,439 |   | 14      |  % |

|                                                                                    |                               |              |                   |                               |                       |                   |                                |        |    |        |       |        |        |   |
|------------------------------------------------------------------------------------|-------------------------------|--------------|-------------------|-------------------------------|-----------------------|-------------------|--------------------------------|--------|----|--------|-------|--------|--------|---|
|                                                                               | FPIC pre-acquisition business | Advocate, MD | 2010 Consolidated | FPIC pre-acquisition business | Advocate, MD (1) | 2009 Consolidated | Percentage Change 2010 vs 2009 |
| Total professional liability claims closed without indemnity payment               | 608                           |         | 210               |                          | 818                   |              | 578                            |   | 19 |   | 597   |   | 37     | % |
| Total professional liability incidents closed without indemnity payment            | 1,075                         |         | 135               |                          | 1,210                 |              | 880                            |   | 11 |   | 891   |   | 36     | % |
| Total professional liability claims and incidents closed without indemnity payment | 1,683                         |         | 345               |                          | 2,028                 |              | 1,458                          |   | 30 |   | 1,488 |   | 36     | % |
|                                                                               |                          |         |              |                          |                  |              |                           |
| Total Professional Liability Claims with Indemnity Payment                         | 342                           |         | 47                |                          | 389                   |              | 348                            |   | 9  |   | 357   |   | 9      | % |
|                                                                               |                          |         |              |                          |                  |              |                           |
| CWIP Ratio on a rolling four quarter basis(2)                                      | 36                            | %            | 18                | %                             | 32                    | %                 | 38                             | %      | 32 | %      | 37    | %      |   |
|                                                                               |                          |         |              |                          |                  |              |                           |
| CWIP Ratio, including incidents, on a rolling four quarter basis (2)               | 17                            | %            | 12                | %                             | 16                    | %                 | 19                             | %      | 23 | %      | 19    | %      |   |

|                             |                                                 |
|-----------------------------|-------------------------------------------------|
| (1)     | Advocate, MD was acquired on November 13, 2009. |

|                             |                                                                                                                                  |
|-----------------------------|----------------------------------------------------------------------------------------------------------------------------------|
| (2)     | The claims with indemnity payment (“CWIP”) ratio is defined as the ratio of total professional liability claims with |

----

|                                                                              |                               |              |                   |                               |                       |                   |                                |        |     |        |       |        |    |         |
|------------------------------------------------------------------------------|-------------------------------|--------------|-------------------|-------------------------------|-----------------------|-------------------|--------------------------------|--------|-----|--------|-------|--------|----|---------|
|                                                                         | FPIC pre-acquisition business | Advocate, MD | 2010 Consolidated | FPIC pre-acquisition business | Advocate, MD (1) | 2009 Consolidated | Percentage Change 2010 vs 2009 |
| Total professional liability claims reported during the period               | 875                           |         | 239               |                          | 1,114                 |              | 745                            |   | 23  |   | 768   |   | 45 |  % |
| Total professional liability incidents reported during the period            | 914                           |         | 115               |                          | 1,029                 |              | 975                            |   | 7   |   | 982   |   | 5  |  % |
| Total professional liability claims and incidents reported during the period | 1,789                         |         | 354               |                          | 2,143                 |              | 1,720                          |   | 30  |   | 1,750 |   | 22 |  % |
|                                                                         |                          |         |              |                          |                  |              |                           |
| Total professional liability claims and incidents that remained open         | 3,048                         |         | 316               |                          | 3,364                 |              | 3,284                          |   | 366 |   | 3,650 |   | (8 | )%      |

|                             |                                                 |
|-----------------------------|-------------------------------------------------|
| (1)     | Advocate, MD was acquired on November 13, 2009. |

----

|                                                       |                               |                       |                   |        |                               |         |         |         |         |         |         |
|-------------------------------------------------------|-------------------------------|-----------------------|-------------------|--------|-------------------------------|---------|---------|---------|---------|---------|---------|
| (in thousands)                                        | FPIC pre-acquisition business | Advocate, MD (1) | 2009 Consolidated | 2008   | Percentage Change2009 vs 2008 |
| Direct premiums written (1)                           | $                             | 167,900               |              | 2,493  |                          | 170,393 |    | 185,830 |    | (8      | )%      |
| Assumed premiums written                              | 58                            |                  | —           |   | 58                            |    | — |    | — |  % |
| Ceded premiums written                                | (23,817                       | )                     | (285              | )      | (24,102                       | )       | (23,548 | )       | (2      | )%      |
| Net premiums written                                  | $                             | 144,141               |              | 2,208  |                          | 146,349 |    | 162,282 |    | (10     | )%      |
|                                                  |                          |                  |              |   |                          |
| Net premiums earned                                   | $                             | 153,320               |              | 3,154  |                          | 156,474 |    | 172,830 |    | (9      | )%      |
| Net investment income                                 | 27,324                        |                  | 425               |   | 27,749                        |    | 30,295  |    | (8      | )%      |
| Net realized investment gains (losses)                | 2,565                         |                  | —           |   | 2,565                         |    | (13,552 | )       | 119     |  % |
| Other income (2)                                      | 510                           |                  | —           |   | 510                           |    | 432     |    | 18      |  % |
| Total revenues                                        | 183,719                       |                  | 3,579             |   | 187,298                       |    | 190,005 |    | (1      | )%      |
|                                                  |                          |                  |              |   |                          |
| Net losses and LAE                                    | 90,132                        |                  | 2,053             |   | 92,185                        |    | 99,721  |    | (8      | )%      |
| Other underwriting expenses (3)                       | 40,631                        |                  | 745               |   | 41,376                        |    | 37,992  |    | 9       |  % |
| Interest expense                                      | 3,620                         |                  | —           |   | 3,620                         |    | 3,827   |    | (5      | )%      |
| Other expenses                                        | 901                           |                  | 63                |   | 964                           |    | 412     |    | 134     |  % |
| Total expenses                                        | 135,284                       |                  | 2,861             |   | 138,145                       |    | 141,952 |    | (3      | )%      |
|                                                  |                          |                  |              |   |                          |
| Income from continuing operations before income taxes | 48,435                        |                  | 718               |   | 49,153                        |    | 48,053  |    | 2       |  % |
| Less: Income tax expense                              | 15,293                        |                  | 252               |   | 15,545                        |    | 15,953  |    | (3      | )%      |
| Income from continuing operations                     | $                             | 33,142                |              | 466    |                          | 33,608  |    | 32,100  |    | 5       |  % |

|                             |                                                 |
|-----------------------------|-------------------------------------------------|
| (1)     | Advocate, MD was acquired on November 13, 2009. |

|                             |                                                                                                                                                                                                                                                                                                                                                                                                          |
|-----------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2)     | Includes $4.8 million and $2.9 million of direct premiums written related to our initiative to provide management services for alternative risk arrangements for the years ended December 31, 2009 and 2008, respectively.  Management fees of $0.2 million and $0.1 million for the years ended December 31, 2009 and 2008, respectively, for such arrangements are included in other income. |

|                             |                                                                                                                                                                                                       |
|-----------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (1)     | Other underwriting expenses includes a guaranty fund assessment of $1.2 million offset by $1.2 million in recoveries in 2009, and recoveries of $2.7 million in 2008 related to previous assessments. |

|                                                                          |                               |              |                   |        |                               |        |        |        |    |   |
|--------------------------------------------------------------------------|-------------------------------|--------------|-------------------|--------|-------------------------------|--------|--------|--------|----|---|
|                                                                     | FPIC pre-acquisition business | Advocate, MD | 2009 Consolidated | 2008   | Percentage Change2009 vs 2008 |
| Professional liability policyholders                                     | 14,339                        |         | 3,664             |   | 18,003                        |   | 13,728 |   | 31 | % |
| Professional liability policyholders under alternative risk arrangements | 282                           |         | —           |   | 282                           |   | 174    |   | 62 | % |
| Total professional liability policyholders                               | 14,621                        |         | 3,664             |   | 18,285                        |   | 13,902 |   | 32 | % |

----

|                                                                                        |        |                                 |         |         |         |
|----------------------------------------------------------------------------------------|--------|---------------------------------|---------|---------|---------|
|                                                                                   |   | For the year ended December 31, |
|                                                                                   |   | 2009                            | 2008    |
| Loss ratio                                                                             |   |                            |    |
| Current accident year                                                                  |   | 71.0                            |  % | 67.5    |  % |
| Prior accident years                                                                   |   | (12.1                           | )%      | (9.8    | )%      |
| Calendar year loss ratio                                                               | A      | 58.9                            |  % | 57.7    |  % |
|                                                                                   |   |                            |    |
| Underwriting expense ratio                                                             | B      | 26.5                            |  % | 22.0    |  % |
| Insurance guaranty fund assessments                                                    |   | 0.7                             |  % | — |  % |
| Insurance guaranty fund recoveries                                                     |   | (0.7                            | )%      | (1.5    | )%      |
| Underwriting expense ratio excluding the impact of insurance guaranty fund recoveries  | C      | 26.5                            |  % | 23.5    |  % |
|                                                                                   |   |                            |    |
| Combined ratio (Sum of A+B)                                                            |   | 85.4                            |  % | 79.7    |  % |
|                                                                                   |   |                            |    |
| Combined ratio excluding the impact of insurance guaranty fund recoveries (Sum of A+C) |   | 85.4                            |  % | 81.2    |  % |

----

|                                                               |                               |                       |                   |        |                                |         |        |         |        |         |         |
|---------------------------------------------------------------|-------------------------------|-----------------------|-------------------|--------|--------------------------------|---------|--------|---------|--------|---------|---------|
| (in thousands)                                                | FPIC pre-acquisition business | Advocate, MD (1) | 2009 Consolidated | 2008   | Percentage Change 2009 vs 2008 |
| Net paid losses                                               | $                             | 73,406                |              | 1,586  |                           | 74,992  |   | 67,190  |   | 12      |  % |
| Less: net paid losses on assumed business in run-off          | 744                           |                  | —           |   | 744                            |    | 498    |    | 49     |  % |
| Net paid losses excluding assumed business in run-off         | 72,662                        |                  | 1,586             |   | 74,248                         |    | 66,692 |    | 11     |  % |
|                                                          |                          |                  |              |   |                           |
| Net paid LAE                                                  | 44,511                        |                  | 688               |   | 45,199                         |    | 53,286 |    | (15    | )%      |
| Less: net paid LAE on assumed business in run-off             | 8                             |                  | —           |   | 8                              |    | 72     |    | (89    | )%      |
| Net paid LAE excluding assumed business in run-off            | 44,503                        |                  | 688               |   | 45,191                         |    | 53,214 |    | (15    | )%      |
|                                                          |                          |                  |              |   |                           |
| Net paid losses and LAE excluding assumed business in run-off | $                             | 117,165               |              | 2,274  |                           | 119,439 |   | 119,906 |   | (0      | )%      |

|                                                                                    |                               |                       |                   |        |                                |        |       |        |        |   |
|------------------------------------------------------------------------------------|-------------------------------|-----------------------|-------------------|--------|--------------------------------|--------|-------|--------|--------|---|
|                                                                               | FPIC pre-acquisition business | Advocate, MD (1) | 2009 Consolidated | 2008   | Percentage Change 2009 vs 2008 |
| Total professional liability claims closed without indemnity payment               | 578                           |                  | 19                |   | 597                            |   | 578   |   | 3      | % |
| Total professional liability incidents closed without indemnity payment            | 880                           |                  | 11                |   | 891                            |   | 824   |   | 8      | % |
| Total professional liability claims and incidents closed without indemnity payment | 1,458                         |                  | 30                |   | 1,488                          |   | 1,402 |   | 6      | % |
|                                                                               |                          |                  |              |   |                           |
| Total Professional Liability Claims with Indemnity Payment                         | 348                           |                  | 9                 |   | 357                            |   | 330   |   | 8      | % |
|                                                                               |                          |                  |              |   |                           |
| CWIP Ratio on a rolling four quarter basis(2)                                      | 38                            | %                     | 32                | %      | 37                             | %      | 36    | %      |   |
|                                                                               |                          |                  |              |   |                           |
| CWIP Ratio, including incidents, on a rolling four quarter basis (2)               | 19                            | %                     | 23                | %      | 19                             | %      | 19    | %      |   |

|                             |                                                 |
|-----------------------------|-------------------------------------------------|
| (1)     | Advocate, MD was acquired on November 13, 2009. |

|                             |                                                                                                                                                                                                                                                                                                       |
|-----------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2)     | The claims with indemnity payment (“CWIP”) ratio is defined as the ratio of total professional liability claims with indemnity payment to the sum of total professional liability claims with indemnity payment and total professional liability claims closed without indemnity payment. |

----

|                                                                              |                               |                       |                   |        |                                |        |       |        |    |         |
|------------------------------------------------------------------------------|-------------------------------|-----------------------|-------------------|--------|--------------------------------|--------|-------|--------|----|---------|
|                                                                         | FPIC pre-acquisition business | Advocate, MD (1) | 2009 Consolidated | 2008   | Percentage Change 2009 vs 2008 |
| Total professional liability claims reported during the period               | 745                           |                  | 23                |   | 768                            |   | 738   |   | 4  |  % |
| Total professional liability incidents reported during the period            | 975                           |                  | 7                 |   | 982                            |   | 1,015 |   | (3 | )%      |
| Total professional liability claims and incidents reported during the period | 1,720                         |                  | 30                |   | 1,750                          |   | 1,753 |   | (0 | )%      |
|                                                                         |                          |                  |              |   |                           |
| Total professional liability claims and incidents that remained open         | 3,284                         |                  | 366               |   | 3,650                          |   | 3,359 |   | 9  |  % |

|                             |                                                 |
|-----------------------------|-------------------------------------------------|
| (1)     | Advocate, MD was acquired on November 13, 2009. |

----

|                                         |                                          |                                                               |                                                               |         |         |        |
|-----------------------------------------|------------------------------------------|---------------------------------------------------------------|---------------------------------------------------------------|---------|---------|--------|
| Reinsurer                               | A.M. Best Rating as of December 31, 2010 | Net Amount Recoverable as of December 31, 2010 (in thousands) | Net Amount Recoverable as of December 31, 2009 (in thousands) |
| Hannover Rueckversicherungs             | A                                        | $                                                             | 25,356                                                        |    | 25,942  |   |
| Physicians' Reciprocal Insurers         | Not Rated*                               | 25,135                                                        |                                                          | 28,367  |    |
| Lloyd's Syndicates                      | A                                        | 20,673                                                        |                                                          | 17,136  |    |
| Transatlantic Reinsurance Company       | A                                        | 17,835                                                        |                                                          | 17,168  |    |
| Berkley Insurance Company               | A+                                       | 13,640                                                        |                                                          | 11,792  |    |
| Partner Reinsurance Company of the U.S. | A+                                       | 10,071                                                        |                                                          | 9,970   |    |
| ACE Tempest Re                          | A+                                       | 6,691                                                         |                                                          | 5,739   |    |
| Magna Carta Insurance Ltd.              | Not Rated*                               | 5,690                                                         |                                                          | — |    |
| Other reinsurers                        | *                                        | 23,719                                                        |                                                          | 30,085  |    |
| Total                                   |                                     | $                                                             | 148,810                                                       |    | 146,199 |   |

|                                |                                                                                                                                                                                                                                                                                                                                      |
|--------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •     | Unexpected changes in premium revenue, due to higher or lower than expected new business or retention of insurance policies in force or the impact of any future adverse legislative, regulatory or other such actions on our premium rates, resulting in unanticipated changes in liquidity provided by our insurance subsidiaries; |

|                                |                                                                                                     |
|--------------------------------|-----------------------------------------------------------------------------------------------------|
| •     | Unexpected changes in the amounts needed to defend and settle claims at our insurance subsidiaries; |

|                                |                                                                                                              |
|--------------------------------|--------------------------------------------------------------------------------------------------------------|
| •     | Unexpected changes in operating costs, including new insurance guaranty fund assessments or increased taxes; |

|                                |                                                                                                                         |
|--------------------------------|-------------------------------------------------------------------------------------------------------------------------|
| •     | Unexpected changes in, or the imposition of, regulatory restrictions on the amount of dividends that can be paid to us; |

|                                |                                                                                                 |
|--------------------------------|-------------------------------------------------------------------------------------------------|
| •     | Failure of one or more of our reinsurers leading to uncollectible reinsurance recoverables; and |

|                                |                                                                             |
|--------------------------------|-----------------------------------------------------------------------------|
| •     | Possible realized losses on securities comprising our investment portfolio. |

----

|                                       |                        |                        |        |         |        |
|---------------------------------------|------------------------|------------------------|--------|---------|--------|
| (in thousands)                        | As of                  | As of                  |
|                                  | December 31, 2010 | December 31, 2009 |
| Long-term debt                        | $                      | 46,083                 |   | 46,083  |   |
| Shareholders' equity                  | $                      | 275,291                |   | 279,787 |   |
| Ratio of debt to total capitalization | 14.3                   | %                      | 14.1   | %       |

----

|                      |                              |                               |                               |                             |                                      |                      |        |        |         |        |         |        |         |         |        |
|----------------------|------------------------------|-------------------------------|-------------------------------|-----------------------------|--------------------------------------|----------------------|--------|--------|---------|--------|---------|--------|---------|---------|--------|
| (in thousands)       | Liability for losses and LAE | Long-term debt obligations(1) | Interest on long-term debt(2) | Operating lease obligations | Employee benefit plan obligations(3) | Other liabilities(4) | Total  |
| Less Than One Year   | $                            | 168,670                       |                          | —                     |                                 | 3,517                |   | 511    |    | 5,367  |    | 9,605  |    | 187,670 |   |
| One to Three Years   | 211,225                      |                          | —                       |                        | 6,824                                |                 | 694    |   | — |   | 70      |   | 218,813 |    |
| Three to Five Years  | 92,745                       |                          | —                       |                        | 6,892                                |                 | 209    |   | — |   | — |   | 99,846  |    |
| More than Five Years | 47,906                       |                          | 46,083                        |                        | 70,553                               |                 | 29     |   | — |   | — |   | 164,571 |    |
| Total                | $                            | 520,546                       |                          | 46,083                      |                                 | 87,786               |   | 1,443  |    | 5,367  |    | 9,675  |    | 670,900 |   |

|                             |                                                                          |
|-----------------------------|--------------------------------------------------------------------------|
| (1)     | All long-term debt is assumed to be settled at its contractual maturity. |

|                             |                                                                                                                                                                                                                                                                                                                                                                        |
|-----------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2)     | Interest on our long-term debt has been calculated considering the effect of our interest rate swaps, which fix the annual interest rate payable on our trust-preferred indebtedness until the termination of the swaps in 2011 and 2013.  Thereafter, interest on our long-term debt has been calculated using the implied LIBOR forward rate for variable rate debt. |

|                             |                                                                                                                                          |
|-----------------------------|------------------------------------------------------------------------------------------------------------------------------------------|
| (3)     | Employee benefit plan obligations are comprised of proposed plan contributions and our unfunded obligation as of December 31, 2010. |

|                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|-----------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (4)     | Includes $9.5 million related to the acquisition of Advocate, MD for a contingent consideration arrangement that provides for additional consideration to be paid by the Company for Advocate, MD based on its attainment of targets with respect to direct written premiums, combined ratio and underwriting profits over a two-year period from the acquisition date.  Up to forty percent of the contingent consideration is payable based on the first year of performance, with any remaining amount payable following the second year of performance.  The range of undiscounted amounts we could pay under the contingent consideration agreement is between $0.9 million and $12.0 million. We recognized a liability for the estimated fair value of acquisition-related contingent consideration using a discounted cash flow model assuming probability weighted targets to be achieved over the earn-out period. For additional information, see Note 3, Acquisition of Advocate, MD. |

----

|                                              |                                    |                                            |        |      |        |
|----------------------------------------------|------------------------------------|--------------------------------------------|--------|------|--------|
| (in thousands)                               | Impact to Pension Expense, Pre-Tax | Impact to the Projected Benefit Obligation |
| 25 basis point increase in the discount rate | $                                  | (23                                        | )      | (487 | )      |
| 25 basis point decrease in the discount rate | $                                  | 24                                         |   | 515  |   |

----

|                             |                                         |                                         |                |                                 |                                 |         |        |         |        |         |        |
|-----------------------------|-----------------------------------------|-----------------------------------------|----------------|---------------------------------|---------------------------------|---------|--------|---------|--------|---------|--------|
|                        | Interest Rate Sensitivity Analysis      |
|                        | Hypothetical Decrease – (200 bps) | Hypothetical Decrease – (100 bps) | Current Market | Hypothetical Increase + 100 bps | Hypothetical Increase + 200 bps |
| Fair value (in thousands)   | $                                       | 674,405                                 |           | 650,821                         |                            | 627,237 |   | 603,653 |   | 580,069 |   |
| Fair value / Reported value | 108                                     | %                                       | 104            | %                               | 100                             | %       | 96     | %       | 92     | %       |

|                             |                                                                                                                                                                                                                                                                                                                                                              |
|-----------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (1)     | This interest rate analysis and the estimated amounts generated from the sensitivity analysis represent forward-looking statements about market risk assuming certain market conditions occur.  The analysis provided by us to illustrate the potential impact of changes in interest rates should not be considered projections of future events or losses. |

|                                |                           |                       |            |                |               |                          |            |                       |            |      |   |      |   |      |   |
|--------------------------------|---------------------------|-----------------------|------------|----------------|---------------|--------------------------|------------|-----------------------|------------|------|---|------|---|------|---|
| Notional Amount (in thousands) | Fair Value (in thousands) | Derivative Instrument | Trade Date | Effective Date | Maturity Date | Receive Rate (1)         | Pay Rate   | Effective Pay Rate(2) |
| $                              | 5,000                     |                  | $          | (377           | )             |  Interest Rate Swap | 5/23/2008  | 5/23/2008             | 5/23/2013  | 0.30 | % | 3.94 | % | 8.14 | % |
| $                              | 15,000                    |                  | $          | (1,246         | )             |  Interest Rate Swap | 5/23/2008  | 8/15/2008             | 8/15/2013  | 0.29 | % | 4.04 | % | 8.14 | % |
| $                              | 15,000                    |                  | $          | (1,359         | )             |  Interest Rate Swap | 5/23/2008  | 10/29/2008            | 10/29/2013 | 0.29 | % | 4.12 | % | 7.97 | % |
| $                              | 10,000                    |                  | $          | (237           | )             |  Interest Rate Swap | 11/18/2008 | 11/24/2008            | 11/23/2011 | 0.30 | % | 2.74 | % | 6.94 | % |

|                             |                             |
|-----------------------------|-----------------------------|
| (1)     | Based on three-month LIBOR. |

|                             |                                                                                                                                                                                                                                    |
|-----------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2)     | Represents the actual effective rate paid on our outstanding debt, which includes spreads ranging from 3.85 percent to 4.20 percent (actual interest rates ranged from 4.14 percent to 4.50 percent as of December 31, 2010). |

----

|                          |                        |        |                      |        |         |        |         |            |         |         |         |         |         |         |         |        |        |        |
|--------------------------|------------------------|--------|----------------------|--------|---------|--------|---------|------------|---------|---------|---------|---------|---------|---------|---------|--------|--------|--------|
| (in thousands)           | December 31, 2010 |   | Projected Cash Flows |
|                     | Fair Value             |   | 2011                 | 2012   | 2013    | 2014   | 2015    | Thereafter | Total   |
| Long-term debt:          |                   |   |                 |   |    |   |    |       |    |
| Variable rate debt(1)    | $                      | 46,083 |                 |   | — |   | — |       | — |    | — |    | — |    | 46,083  |   | 46,083 |   |
| Average interest rate(1) | 4.45                   | %      |                 | 4.60   | %       | 5.37   | %       | 6.41       | %       | 7.32    | %       | 8.00    | %       | 8.90    | %       |   |
|                     |                   |   |                 |   |    |   |    |       |    |
| Interest rate swaps:     |                   |   |                 |   |    |   |    |       |    |
| Receive amount(2)        | $                      | (1,564 | )                    |   | (1,445  | )      | (1,099  | )          | (423    | )       | — |    | — |    | — |   | (2,967 | )      |
| Average pay rate(2)      | 3.39                   | %      |                 | 3.80   | %       | 3.80   | %       | 3.80       | %       | — | %       | — | %       | — | %       |   |
| Average receive rate(2)  | 2.80                   | %      |                 | 3.21   | %       | 2.44   | %       | 0.94       | %       | — | %       | — | %       | — | %       |   |

|                             |                                                                                                                                                                                                                                                                                              |
|-----------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (1)     | For debt obligations, the table presents principal cash flows and related weighted-average interest rates by expected maturity dates.  The weighted-average interest rates as of December 31, 2010 are based on implied forward rates in the forward yield curve for three-month LIBOR. |

|                             |                                                                                                                                                                                                                             |
|-----------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2)     | The table presents notional amounts and weighted-average interest rates by expected (contractual) maturity dates.  Notional amounts are used to calculate the contractual payments to be exchanged under the swap contract. |

----

|                                                                                            |                          |        |           |           |        |         |        |       |        |        |        |
|--------------------------------------------------------------------------------------------|--------------------------|--------|-----------|-----------|--------|---------|--------|-------|--------|--------|--------|
| (in thousands)                                                                             | Underlying Credit Rating |   |      |
|                                                                                       | AAA - A                  | BBB    | Below BBB | Not Rated | Total  |
| Value of Fixed-Income Securities based on the Credit Rating of the Financial Guarantor (1) | $                        | 72,118 |      | 3,610     |   | 53      |   | 1,126 |   | 76,907 |   |
| Value of Fixed-Income Securities based on the Credit Rating of the Underlying Issuer (2)   | $                        | 66,522 |      | 5,474     |   | — |   | 4,911 |   | 76,907 |   |

|                             |                                                                                                                                                                                                                                                                                                               |
|-----------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (1)     | The ratings noted above were determined by using the lower of the available credit ratings from S&P and Moody's unless the underlying issuer's stand-alone credit rating was higher than the S&P and Moody's stated rating, in which case the underlying issuer's stand-alone credit rating was used. |

|                             |                                                                                                                      |
|-----------------------------|----------------------------------------------------------------------------------------------------------------------|
| (2)     | The ratings noted above were determined by using the lower of the available credit ratings from S&P and Moody's. |

|                                                  |                                                                     |                                                                   |                                                                                |        |        |        |        |
|--------------------------------------------------|---------------------------------------------------------------------|-------------------------------------------------------------------|--------------------------------------------------------------------------------|--------|--------|--------|--------|
| (in thousands)                                   | Value of Fixed-Income Securities Containing a Third-Party Guarantee |
| Financial Guarantor:                             | Securities with an Underlying Issuer Stand-Alone Credit Rating      | Securities without an Underlying Issuer Stand-Alone Credit Rating | Total Securities Containing a Third-Party Guarantee from a Financial Guarantor |
| National Public Finance Guarantee Corporation    | $                                                                   | 36,741                                                            |                                                                           | 3,324  |   | 40,065 |   |
| Assured Guaranty Municipal Corp.                 | 17,778                                                              |                                                              | —                                                                        |   | 17,778 |   |
| Permanent School Fund                            | 9,285                                                               |                                                              | —                                                                        |   | 9,285  |   |
| American Municipal Bond Assurance Corporation    | 4,203                                                               |                                                              | 1,012                                                                          |   | 5,215  |   |
| Financial Guaranty Insurance Company   | 4,416                                                               |                                                              | —                                                                        |   | 4,416  |   |
| Other guarantors                       | 10                                                                  |                                                              | 138                                                                            |   | 148    |   |
| Total                        | $                                                                   | 72,433                                                            |                                                                           | 4,474  |   | 76,907 |   |

----

|                                                                              |                        |        |        |
|------------------------------------------------------------------------------|------------------------|--------|--------|
| (in thousands)                                                               | As of                  |
|                                                                         | December 31, 2010 |
| Fair value of equity securities                                              | $                      | 11,930 |   |
| Pre-tax impact of a 10 percent decline in market prices for equity exposures | $                      | 1,193  |   |

----

|          |
|----------|
| Part III |

|                                                                 |                                                                                             |        |                                                                                 |         |                                                                                                                                                  |        |         |           |        |
|-----------------------------------------------------------------|---------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------|-----------|--------|
| Plan category                                                   | Number of securities to be issued upon exercise of outstanding options, warrants and rights |   | Weighted-average exercise price of outstanding options, warrants and rights (1) |    | Number of securities remaining available for future issuance under share-based compensation plans (excluding securities reflected in column (a)) |
|                                                            | (a)                                                                                         |   | (b)                                                                             |    | (c)                                                                                                                                              |
| Share-based compensation plans approved by security holders     | 410,377                                                                                     |   |                                                                            | $       | 18.62                                                                                                                                            |   |    | 1,186,251 |   |
| Share-based compensation plans not approved by security holders | —                                                                                     |   |                                                                            | — |                                                                                                                                             |   | — |      |
| Total                                                           | 410,377                                                                                     |   |                                                                            | $       | 18.62                                                                                                                                            |   |    | 1,186,251 |   |

|                             |                                                                                                                                                                                                                      |
|-----------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (1)     | Under our share-based compensation plans, we have granted shares in the form of restricted stock awards, including performance-based awards. As of December 31, 2010, there were 222,821 issued and outstanding |

----

----

|         |
|---------|
| Part IV |

|                            |                                                     |
|----------------------------|-----------------------------------------------------|
| 1.     | Financial Statements of FPIC Insurance Group, Inc.: |

|                                                                   |      |
|-------------------------------------------------------------------|------|
| Report of Independent Registered Certified Public Accounting Firm | F-1  |
| Management's Report on Internal Control over Financial Reporting  | F-2  |
| Consolidated Statements of Financial Position                     | F-3  |
| Consolidated Statements of Income                                 | F-4  |
| Consolidated Statements of Shareholders' Equity                   | F-5  |
| Consolidated Statements of Cash Flows                             | F-8  |
| Notes to the Consolidated Financial Statements                    | F-10 |

|                            |                                |
|----------------------------|--------------------------------|
| 2.     | Financial Statement Schedules: |

|               |                                                                            |     |
|---------------|----------------------------------------------------------------------------|-----|
| Schedule I:   | Summary of Investments - Other Than Investments in Related Parties         | S-1 |
| Schedule II:  | Parent Company Only Condensed Statements of Financial Position             | S-2 |
| Schedule II:  | Parent Company Only Condensed Statements of Income                         | S-3 |
| Schedule II:  | Parent Company Only Condensed Statements of Cash Flows                     | S-4 |
| Schedule III: | Supplementary Insurance Information                                        | S-6 |
| Schedule IV:  | Reinsurance                                                                | S-6 |
| Schedule V:   | Valuation and Qualifying Accounts                                          | S-7 |
| Schedule VI:  | Supplemental Information Concerning Property-Casualty Insurance Operations | S-7 |

|                            |           |
|----------------------------|-----------|
| 3.     | Exhibits: |

----

|                    |                                       |                   |
|--------------------|---------------------------------------|-------------------|
|               | FPIC Insurance Group, Inc.            |
|               |                                  |              |
| March 9, 2011 | By:                                   | /s/ John R. Byers |
|               | President and Chief Executive Officer |

|                                                    |                                                                                        |                    |
|----------------------------------------------------|----------------------------------------------------------------------------------------|--------------------|
| Signature and Title                                | Title                                                                                  | Date               |
| /s/ John R. ByersJohn R. Byers                     | President, Chief Executive Officer and Director (Principal Executive Officer)          | March 9, 2011 |
|                                               |                                                                                   |               |
| /s/ Charles Divita, IIICharles Divita, III         | Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | March 9, 2011 |
|                                               |                                                                                   |               |
| /s/ Kenneth M. KirschnerKenneth M. Kirschner       | Chairman of the Board                                                                  | March 9, 2011 |
|                                               |                                                                                   |               |
| /s/ John K. Anderson, Jr.John K. Anderson, Jr.     | Vice Chairman of the Board                                                             | March 9, 2011 |
|                                               |                                                                                   |               |
| /s/ Robert O. Baratta, M.D.Robert O. Baratta, M.D. | Immediate Past Chairman of the Board                                                   | March 9, 2011 |
|                                               |                                                                                   |               |
| /s/ Richard J. Bagby, M.D.Richard J. Bagby, M.D.   | Director                                                                               | March 9, 2011 |
|                                               |                                                                                   |               |
| /s/ M.C. Harden, IIIM. C. Harden, III              | Director                                                                               | March 9, 2011 |
|                                               |                                                                                   |               |
| /s/ Terence P. McCoy, M.D.Terence P. McCoy, M.D.   | Director                                                                               | March 9, 2011 |
|                                               |                                                                                   |               |
| /s/ John G. RichJohn G. Rich                       | Director                                                                               | March 9, 2011 |
|                                               |                                                                                   |               |
| /s/ Joan D. RuffierJoan D. Ruffier                 | Director                                                                               | March 9, 2011 |
|                                               |                                                                                   |               |
| /s/ David M. Shapiro, M.D.David M. Shapiro, M.D.   | Director                                                                               | March 9, 2011 |

----

|                                                                   |        |      |
|-------------------------------------------------------------------|--------|------|
| Report of Independent Registered Certified Public Accounting Firm |   | F-1  |
| Management's Report on Internal Control over Financial Reporting  |   | F-2  |
| Consolidated Statements of Financial Position                     |   | F-3  |
| Consolidated Statements of Income                                 |   | F-4  |
| Consolidated Statements of Shareholders' Equity                   |   | F-5  |
| Consolidated Statements of Cash Flows                             |   | F-8  |
| Notes to the Consolidated Financial Statements                    |   | F-10 |
| 1.  Organization and Nature of Operations                         |   | F-10 |
| 2.  Significant Accounting Policies                               |   | F-10 |
| 3.  Acquisition of Advocate, MD                                   |   | F-19 |
| 4.  Fair Value Measurements                                       |   | F-21 |
| 5.  Fair Value of Financial Instruments                           |   | F-24 |
| 6.  Investments                                                   |   | F-25 |
| 7.  Goodwill and Intangible Assets                                |   | F-30 |
| 8.  Liability for Losses and Loss Adjustment Expenses             |   | F-31 |
| 9.  Reinsurance                                                   |   | F-32 |
| 10. Long-Term Debt                                                |   | F-34 |
| 11. Derivative Instruments and Hedging Activities                 |   | F-34 |
| 12. Earnings per Common Share                                     |   | F-37 |
| 13. Income Taxes                                                  |   | F-38 |
| 14. Other Comprehensive Income (Loss)                             |   | F-40 |
| 15. Share-Based Compensation Plans                                |   | F-42 |
| 16. Employee Benefit Plans                                        |   | F-44 |
| 17. Statutory Accounting                                          |   | F-48 |
| 18. Deferred Policy Acquisition Costs                             |   | F-49 |
| 19. Commitments and Contingencies                                 |   | F-49 |
| 20. Subsequent Events                                             |   | F-50 |
| 21. Quarterly Results of Operations (unaudited)                   |   | F-50 |

----

|                                                                   |
|-------------------------------------------------------------------|
|                                                              |
| Report of Independent Registered Certified Public Accounting Firm |
|                                                              |

|                       |                                |        |
|-----------------------|--------------------------------|--------|
| Jacksonville, Florida | /s/ PricewaterhouseCoopers LLP |
| March 9, 2011    |                           |   |

----

|                                                                  |
|------------------------------------------------------------------|
|                                                             |
| Management's Report on Internal Control over Financial Reporting |
|                                                             |

|                    |                                       |                         |
|--------------------|---------------------------------------|-------------------------|
| March 9, 2011 | FPIC Insurance Group, Inc.            |
|               |
|               | By:                                   | /s/ John R. Byers       |
|               | President and Chief Executive Officer |
|               |
|               | By:                                   | /s/ Charles Divita, III |
|               | Chief Financial Officer               |

----

|                                                                                                                                                                 |                    |         |         |           |        |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------|---------|---------|-----------|--------|
| (in thousands, except shares authorized, issued and outstanding)                                                                                                | As of December 31, |
|                                                                                                                                                            | 2010               | 2009    |
| Assets                                                                                                                                                          |               |    |
| Investments:                                                                                                                                                    |               |    |
| Fixed income securities, available-for-sale, at fair value                                                                                                      | $                  | 627,237 |    | 662,688   |   |
| Equity securities, available-for-sale, at fair value                                                                                                            | 11,930             |    | 11,212  |      |
| Short-term investments                                                                                                                                          | —            |    | 2,955   |      |
| Real estate investments                                                                                                                                         | 4,678              |    | 4,889   |      |
| Other invested assets                                                                                                                                           | 4,516              |    | 4,443   |      |
| Total investments (Note 6)                                                                                                                                      | 648,361            |    | 686,187 |      |
|                                                                                                                                                            |               |    |
| Cash and cash equivalents                                                                                                                                       | 58,726             |    | 58,626  |      |
| Premiums receivable (net of an allowance of $300 as of December 31, 2010 and 2009)                                                                              | 56,527             |    | 56,504  |      |
| Accrued investment income                                                                                                                                       | 6,782              |    | 7,948   |      |
| Reinsurance recoverable on paid losses                                                                                                                          | 4,042              |    | 4,494   |      |
| Due from reinsurers on unpaid losses and advance premiums                                                                                                       | 134,223            |    | 133,445 |      |
| Ceded unearned premiums                                                                                                                                         | 12,181             |    | 11,245  |      |
| Deferred policy acquisition costs                                                                                                                               | 8,963              |    | 9,918   |      |
| Deferred income taxes                                                                                                                                           | 21,792             |    | 26,321  |      |
| Goodwill and intangible assets                                                                                                                                  | 27,220             |    | 28,200  |      |
| Other assets                                                                                                                                                    | 7,446              |    | 8,595   |      |
| Total assets                                                                                                                                                    | $                  | 986,263 |    | 1,031,483 |   |
|                                                                                                                                                            |               |    |
| Liabilities and Shareholders' Equity                                                                                                                            |               |    |
| Policy liabilities and accruals:                                                                                                                                |               |    |
| Losses and loss adjustment expenses                                                                                                                             | $                  | 520,546 |    | 559,257   |   |
| Unearned premiums                                                                                                                                               | 100,555            |    | 103,831 |      |
| Reinsurance payable                                                                                                                                             | 1,636              |    | 2,985   |      |
| Paid in advance and unprocessed premiums                                                                                                                        | 7,993              |    | 10,222  |      |
| Total policy liabilities and accruals                                                                                                                           | 630,730            |    | 676,295 |      |
|                                                                                                                                                            |               |    |
| Long-term debt                                                                                                                                                  | 46,083             |    | 46,083  |      |
| Other liabilities                                                                                                                                               | 34,159             |    | 29,318  |      |
| Total liabilities                                                                                                                                               | 710,972            |    | 751,696 |      |
|                                                                                                                                                            |               |    |
| Commitments and contingencies (Note 19)                                                                                                                         |               |    |
|                                                                                                                                                            |               |    |
| Preferred stock, $0.10 par value, 50,000,000 shares authorized; none issued                                                                                     | —            |    | — |      |
| Common stock, $0.10 par value, 50,000,000 shares authorized; 8,926,692 and 10,142,613 shares issued and outstanding at December 31, 2010 and 2009, respectively | 893                |    | 1,014   |      |
| Additional paid-in capital                                                                                                                                      | —            |    | — |      |
| Retained earnings                                                                                                                                               | 262,068            |    | 270,118 |      |
| Accumulated other comprehensive income, net                                                                                                                     | 12,330             |    | 8,655   |      |
| Total shareholders' equity                                                                                                                                      | 275,291            |    | 279,787 |      |
| Total liabilities and shareholders' equity                                                                                                                      | $                  | 986,263 |    | 1,031,483 |   |

----

|                                                                                      |                                 |         |         |         |         |         |        |
|--------------------------------------------------------------------------------------|---------------------------------|---------|---------|---------|---------|---------|--------|
| (in thousands, except earnings per common share)                                     | For the year ended December 31, |
|                                                                                 | 2010                            | 2009    | 2008    |
| Revenues                                                                             |                            |    |    |
| Net premiums earned                                                                  | $                               | 168,085 |    | 156,474 |    | 172,830 |   |
| Net investment income                                                                | 24,941                          |    | 27,749  |    | 30,295  |    |
| Net realized investment gains (losses)                                               | 4,148                           |    | 2,565   |    | (13,552 | )       |
| Other income                                                                         | 535                             |    | 510     |    | 432     |    |
| Total revenues                                                                       | 197,709                         |    | 187,298 |    | 190,005 |    |
|                                                                                 |                            |    |    |
| Expenses                                                                             |                            |    |    |
| Net losses and loss adjustment expenses                                              | 97,329                          |    | 92,185  |    | 99,721  |    |
| Other underwriting expenses                                                          | 48,547                          |    | 41,376  |    | 37,992  |    |
| Interest expense on debt                                                             | 3,614                           |    | 3,620   |    | 3,827   |    |
| Other expenses                                                                       | 3,053                           |    | 964     |    | 412     |    |
| Total expenses                                                                       | 152,543                         |    | 138,145 |    | 141,952 |    |
|                                                                                 |                            |    |    |
| Income from continuing operations before income taxes                                | 45,166                          |    | 49,153  |    | 48,053  |    |
| Less:  Income tax expense                                                            | 15,570                          |    | 15,545  |    | 15,953  |    |
| Income from continuing operations                                                    | 29,596                          |    | 33,608  |    | 32,100  |    |
|                                                                                 |                            |    |    |
| Discontinued operations                                                              |                            |    |    |
| Gain on disposal of discontinued operations, net of income taxes                     | —                         |    | 411     |    | — |    |
| Discontinued operations                                                              | —                         |    | 411     |    | — |    |
|                                                                                 |                            |    |    |
| Net income                                                                           | $                               | 29,596  |    | 34,019  |    | 32,100  |   |
|                                                                                 |                            |    |    |
| Basic earnings per common share:                                                     |                            |    |    |
| Income from continuing operations                                                    | $                               | 3.10    |    | 3.11    |    | 2.53    |   |
| Discontinued operations                                                              | —                         |    | 0.04    |    | — |    |
| Net income                                                                           | $                               | 3.10    |    | 3.15    |    | 2.53    |   |
|                                                                                 |                            |    |    |
| Basic weighted-average common shares outstanding                                     | 9,537                           |    | 10,801  |    | 12,674  |    |
|                                                                                 |                            |    |    |
| Diluted earnings per common share:                                                   |                            |    |    |
| Income from continuing operations                                                    | $                               | 3.03    |    | 3.05    |    | 2.46    |   |
| Discontinued operations                                                              | —                         |    | 0.04    |    | — |    |
| Net income                                                                           | $                               | 3.03    |    | 3.09    |    | 2.46    |   |
|                                                                                 |                            |    |    |
| Diluted weighted-average common shares outstanding                                   | 9,761                           |    | 11,026  |    | 13,042  |    |
|                                                                                 |                            |    |    |
|                                                                                 |                            |    |    |
| Net realized investment gains (losses):                                              |                            |    |    |
| Net realized investment gains (losses) before credit related impairments             | $                               | 4,456   |    | 4,642   |    | (44     | )      |
|                                                                                 |                            |    |    |
| Total other-than-temporary impairments on investments                                | (873                            | )       | (2,077  | )       | (13,508 | )       |
| Portion of other-than-temporary impairments recognized in other comprehensive income | 565                             |    | — |    | — |    |
| Credit related impairments included in net realized investment gains (losses)        | (308                            | )       | (2,077  | )       | (13,508 | )       |
|                                                                                 |                            |    |    |
| Net realized investment gains (losses)                                               | $                               | 4,148   |    | 2,565   |    | (13,552 | )      |

----

|                                                                 |                        |        |                |                            |                   |                                                    |                             |         |         |         |        |        |         |         |        |        |  |
|-----------------------------------------------------------------|------------------------|--------|----------------|----------------------------|-------------------|----------------------------------------------------|-----------------------------|---------|---------|---------|--------|--------|---------|---------|--------|--------|--|
|                                                            |                   |   | (in thousands) |
|                                                            | Shares of Common Stock |   | Common Stock   | Additional Paid-in-Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss), Net | Comprehensive Income (Loss) | Total   |
| Balances at December 31, 2009                                   | 10,142,613             |   |           | $                          | 1,014             |                                               | —                     |    | 270,118 |    | 8,655  |   |    | 279,787 |   |
|                                                            |                   |   |           |                       |              |                                               |                        |    |
| Net income                                                      | —                |   |           | —                    |              | —                                            |                        | 29,596  |    | — |   | $      | 29,596  |    | 29,596 |   |
| Other comprehensive income, net of tax:                         |                   |   |           |                       |              |                                               |                        |    |
| Unrealized gain on invested assets, net of tax                  | —                |   |           | —                    |              | —                                            |                        | — |    | 4,555   |   | 4,555  |    | 4,555   |   |
| Unrealized loss on derivative financial instruments, net of tax | —                |   |           | —                    |              | —                                            |                        | — |    | (380    | )      | (380   | )       | (380    | )      |
| Prior service cost, net of tax                                  | —                |   |           | —                    |              | —                                            |                        | — |    | 2       |   | 2      |    | 2       |   |
| Net loss on pension plan, net of tax                            | —                |   |           | —                    |              | —                                            |                        | — |    | (502    | )      | (502   | )       | (502    | )      |
| Other comprehensive income                                      |                   |   |           |                       |              |                                               | 3,675                       |    |    |
| Comprehensive income                                            |                   |   |           |                       |              |                                               | $                           | 33,271  |    |    |
|                                                            |                   |   |           |                       |              |                                               |                        |    |
| Issuance of restricted stock                                    | 101,621                |   |           | 10                         |              | 2,784                                              |                        | — |    | — |   |   | 2,794   |    |
| Issuance of common shares                                       | 102,357                |   |           | 10                         |              | 1,197                                              |                        | — |    | — |   |   | 1,207   |    |
| Repurchase of common shares                                     | (1,419,899             | )      |           | (141                       | )                 | (4,555                                             | )                           | (37,646 | )       | — |   |   | (42,342 | )       |
| Share-based compensation                                        | —                |   |           | —                    |              | 38                                                 |                        | — |    | — |   |   | 38      |    |
| Income tax reductions relating to exercise of stock options     | —                |   |           | —                    |              | 536                                                |                        | — |    | — |   |   | 536     |    |
| Balances at December 31, 2010                                   | 8,926,692              |   |           | $                          | 893               |                                               | —                     |    | 262,068 |    | 12,330 |   |    | 275,291 |   |

----

|                                                                 |                        |        |                |                            |                   |                                                    |                             |         |         |         |         |         |         |         |        |        |  |
|-----------------------------------------------------------------|------------------------|--------|----------------|----------------------------|-------------------|----------------------------------------------------|-----------------------------|---------|---------|---------|---------|---------|---------|---------|--------|--------|--|
|                                                            |                   |   | (in thousands) |
|                                                            | Shares of Common Stock |   | Common Stock   | Additional Paid-in-Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss), Net | Comprehensive Income (Loss) | Total   |
| Balances at December 31, 2008                                   | 11,704,947             |   |           | $                          | 1,170             |                                               | —                     |    | 271,113 |    | (12,389 | )       |    | 259,894 |   |
|                                                            |                   |   |           |                       |              |                                               |                        |    |
| Net income                                                      | —                |   |           | —                    |              | —                                            |                        | 34,019  |    | — |    | $       | 34,019  |    | 34,019 |   |
| Other comprehensive income, net of tax:                         |                   |   |           |                       |              |                                               |                        |    |
| Unrealized gain on invested assets, net of tax                  | —                |   |           | —                    |              | —                                            |                        | — |    | 18,898  |    | 18,898  |    | 18,898  |   |
| Unrealized gain on derivative financial instruments, net of tax | —                |   |           | —                    |              | —                                            |                        | — |    | 581     |    | 581     |    | 581     |   |
| Prior service cost, net of tax                                  | —                |   |           | —                    |              | —                                            |                        | — |    | 2       |    | 2       |    | 2       |   |
| Transition obligation, net of tax                               | —                |   |           | —                    |              | —                                            |                        | — |    | — |    | — |    | — |   |
| Net gain on pension plan, net of tax                            | —                |   |           | —                    |              | —                                            |                        | — |    | 1,563   |    | 1,563   |    | 1,563   |   |
| Other comprehensive loss                                        |                   |   |           |                       |              |                                               | 21,044                      |    |    |
| Comprehensive income                                            |                   |   |           |                       |              |                                               | $                           | 55,063  |    |    |
|                                                            |                   |   |           |                       |              |                                               |                        |    |
| Issuance of restricted stock                                    | 40,568                 |   |           | 4                          |              | 2,682                                              |                        | — |    | — |    |    | 2,686   |    |
| Issuance of common shares                                       | 287,813                |   |           | 29                         |              | 2,774                                              |                        | — |    | — |    |    | 2,803   |    |
| Repurchase of common shares                                     | (1,890,715             | )      |           | (189                       | )                 | (7,752                                             | )                           | (35,014 | )       | — |    |    | (42,955 | )       |
| Share-based compensation                                        | —                |   |           | —                    |              | 676                                                |                        | — |    | — |    |    | 676     |    |
| Income tax reductions relating to exercise of stock options     | —                |   |           | —                    |              | 1,620                                              |                        | — |    | — |    |    | 1,620   |    |
| Balances at December 31, 2009                                   | 10,142,613             |   |           | $                          | 1,014             |                                               | —                     |    | 270,118 |    | 8,655   |    |    | 279,787 |   |

----

|                                                                         |                        |        |                |                            |                   |                                                    |                             |         |         |         |         |        |         |         |        |        |  |
|-------------------------------------------------------------------------|------------------------|--------|----------------|----------------------------|-------------------|----------------------------------------------------|-----------------------------|---------|---------|---------|---------|--------|---------|---------|--------|--------|--|
|                                                                    |                   |   | (in thousands) |
|                                                                    | Shares of Common Stock |   | Common Stock   | Additional Paid-in-Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss), Net | Comprehensive Income (Loss) | Total   |
| Balances at December 31, 2007                                           | 13,424,102             |   |           | $                          | 1,342             |                                               | —                     |    | 295,139 |    | (884    | )      |    | 295,597 |   |
|                                                                    |                   |   |           |                       |              |                                               |                        |    |
| Net income                                                              | —                |   |           | —                    |              | —                                            |                        | 32,100  |    | — |    | $      | 32,100  |    | 32,100 |   |
| Other comprehensive loss, net of tax:                                   |                   |   |           |                       |              |                                               |                        |    |
| Unrealized loss on invested assets, net of tax                          | —                |   |           | —                    |              | —                                            |                        | — |    | (7,565  | )       | (7,565 | )       | (7,565  | )      |
| Unrealized loss on derivative financial instruments, net of tax         | —                |   |           | —                    |              | —                                            |                        | — |    | (2,014  | )       | (2,014 | )       | (2,014  | )      |
| Prior service cost, net of tax                                          | —                |   |           | —                    |              | —                                            |                        | — |    | 357     |    | 357    |    | 357     |   |
| Transition obligation, net of tax                                       | —                |   |           | —                    |              | —                                            |                        | — |    | 5       |    | 5      |    | 5       |   |
| Net loss on pension plan, net of tax                                    | —                |   |           | —                    |              | —                                            |                        | — |    | (2,230  | )       | (2,230 | )       | (2,230  | )      |
| Other comprehensive loss                                                |                   |   |           |                       |              |                                               | (11,447                     | )       |    |
| Comprehensive income                                                    |                   |   |           |                       |              |                                               | $                           | 20,653  |    |    |
|                                                                    |                   |   |           |                       |              |                                               |                        |    |
| Cumulative adjustment to adopt pension plan measurement date provisions | —                |   |           | —                    |              | —                                            |                        | (89     | )       | (58     | )       |   | (147    | )       |
| Issuance of restricted stock                                            | 39,564                 |   |           | 4                          |              | 2,219                                              |                        | — |    | — |    |   | 2,223   |    |
| Issuance of common shares                                               | 503,280                |   |           | 50                         |              | 6,595                                              |                        | — |    | — |    |   | 6,645   |    |
| Repurchase of common shares                                             | (2,261,999             | )      |           | (226                       | )                 | (11,855                                            | )                           | (56,037 | )       | — |    |   | (68,118 | )       |
| Share-based compensation                                                | —                |   |           | —                    |              | 799                                                |                        | — |    | — |    |   | 799     |    |
| Income tax reductions relating to exercise of stock options             | —                |   |           | —                    |              | 2,242                                              |                        | — |    | — |    |   | 2,242   |    |
| Balances at December 31, 2008                                           | 11,704,947             |   |           | $                          | 1,170             |                                               | —                     |    | 271,113 |    | (12,389 | )      |    | 259,894 |   |

----

|                                                                                                                    |                                 |        |          |        |          |        |        |
|--------------------------------------------------------------------------------------------------------------------|---------------------------------|--------|----------|--------|----------|--------|--------|
| (in thousands)                                                                                                     | For the year ended December 31, |
|                                                                                                               | 2010                            | 2009   | 2008     |
| Operating Activities                                                                                               |                            |   |     |
| Net income                                                                                                         | $                               | 29,596 |     | 34,019 |     | 32,100 |   |
| Less: Discontinued operations                                                                                      | —                         |   | 411      |   | —  |   |
| Income from continuing operations                                                                                  | 29,596                          |   | 33,608   |   | 32,100   |   |
| Adjustments to reconcile income from continuing operations to net cash provided by (used in) operating activities: |                            |   |     |
| Depreciation, amortization and accretion                                                                           | 26,716                          |   | 22,026   |   | 25,113   |   |
| Net realized (gains) losses on investments                                                                         | (4,148                          | )      | (2,565   | )      | 13,552   |   |
| Net loss (earnings) on equity investment                                                                           | 22                              |   | (23      | )      | 8        |   |
| Bad debt expense                                                                                                   | 338                             |   | 605      |   | 91       |   |
| Deferred income tax expense (benefit)                                                                              | 2,501                           |   | 374      |   | (764     | )      |
| Excess tax benefits from share-based compensation                                                                  | (631                            | )      | (1,630   | )      | (2,351   | )      |
| Share-based compensation                                                                                           | 2,832                           |   | 3,362    |   | 3,022    |   |
| Other Changes in Assets and Liabilities                                                                            |                            |   |     |
| Premiums receivable, net                                                                                           | (360                            | )      | 7,815    |   | 4,223    |   |
| Deferred policy acquisition costs                                                                                  | (19,110                         | )      | (15,541  | )      | (17,857  | )      |
| Accrued investment income                                                                                          | 1,166                           |   | 473      |   | 621      |   |
| Reinsurance recoverable on paid losses                                                                             | 452                             |   | (2,424   | )      | 1,393    |   |
| Due from reinsurers on unpaid losses and advance premiums                                                          | (778                            | )      | 15,572   |   | 8,484    |   |
| Ceded unearned premiums                                                                                            | (936                            | )      | (7,826   | )      | (318     | )      |
| Other assets and liabilities                                                                                       | 3,779                           |   | (1,966   | )      | (4,707   | )      |
| Losses and loss adjustment expenses                                                                                | (38,711                         | )      | (45,028  | )      | (29,239  | )      |
| Unearned premiums                                                                                                  | (3,276                          | )      | (849     | )      | (10,229  | )      |
| Reinsurance payable                                                                                                | (1,349                          | )      | 247      |   | (605     | )      |
| Paid in advance and unprocessed premiums                                                                           | (2,229                          | )      | 427      |   | (1,483   | )      |
| Net cash (used in) provided by operating activities                                                                | (4,126                          | )      | 6,657    |   | 21,054   |   |
|                                                                                                               |                            |   |     |
| Investing Activities                                                                                               |                            |   |     |
| Proceeds from                                                                                                      |                            |   |     |
| Sales of fixed income securities, available-for-sale                                                               | 160,003                         |   | 116,021  |   | 132,251  |   |
| Sales of equity securities, available-for-sale                                                                     | 499                             |   | 3,176    |   | —  |   |
| Sales of other invested assets                                                                                     | 394                             |   | 192      |   | 6        |   |
| Maturities of fixed income securities, available-for-sale                                                          | 69,023                          |   | 66,670   |   | 47,900   |   |
| Maturities of short-term investments                                                                               | 2,925                           |   | —  |   | 1,475    |   |
| Purchases of                                                                                                       |                            |   |     |
| Fixed income securities, available-for-sale                                                                        | (187,633                        | )      | (110,669 | )      | (152,556 | )      |
| Equity securities, available-for-sale                                                                              | —                         |   | (635     | )      | (2,025   | )      |
| Other invested assets                                                                                              | (301                            | )      | (3,549   | )      | (501     | )      |
| Property and equipment                                                                                             | (180                            | )      | (619     | )      | (231     | )      |
| Acquisition of Advocate, MD, net of cash received                                                                  | —                         |   | (38,576  | )      | —  |   |
| Net cash provided by investing activities                                                                          | $                               | 44,730 |     | 32,011 |     | 26,319 |   |

----

|                                                      |                                 |        |         |        |         |        |        |
|------------------------------------------------------|---------------------------------|--------|---------|--------|---------|--------|--------|
| (in thousands)                                       | For the year ended December 31, |
|                                                 | 2010                            | 2009   | 2008    |
| Financing Activities                                 |                            |   |    |
| Issuance of common stock                             | $                               | 1,207  |    | 2,803  |    | 6,645  |   |
| Repurchase of common stock                           | (42,342                         | )      | (42,955 | )      | (68,118 | )      |
| Excess tax benefits from share-based compensation    | 631                             |   | 1,630   |   | 2,351   |   |
| Net cash used in financing activities                | (40,504                         | )      | (38,522 | )      | (59,122 | )      |
|                                                 |                            |   |    |
| Net increase (decrease) in cash and cash equivalents | 100                             |   | 146     |   | (11,749 | )      |
| Cash and cash equivalents at beginning of year       | 58,626                          |   | 58,480  |   | 70,229  |   |
| Cash and cash equivalents at end of period           | $                               | 58,726 |    | 58,626 |    | 58,480 |   |
|                                                 |                            |   |    |
| Supplemental disclosure of cash flow information:    |                            |   |    |
| Interest paid on debt                                | $                               | 3,614  |    | 3,621  |    | 3,586  |   |
| Federal income taxes paid                            | $                               | 11,300 |    | 14,206 |    | 15,616 |   |
|                                                 |                            |   |    |
| Supplemental disclosure of non cash activities:      |                            |   |    |
| Issuance of restricted stock                         | $                               | 2,954  |    | 1,331  |    | 1,945  |   |
| Share-based compensation                             | $                               | 2,832  |    | 3,362  |    | 3,022  |   |

----

|                                |                                                        |
|--------------------------------|--------------------------------------------------------|
| •     | First Professionals, a wholly owned subsidiary of FPIC |

|                                |                                                                                                 |
|--------------------------------|-------------------------------------------------------------------------------------------------|
| •     | The Tenere Group, Inc. (“Tenere”), a wholly owned subsidiary of First Professionals |

|                                |                                               |
|--------------------------------|-----------------------------------------------|
| •     | Intermed, a wholly owned subsidiary of Tenere |

|                                |                                                                |
|--------------------------------|----------------------------------------------------------------|
| •     | Advocate, MD, a wholly owned subsidiary of First Professionals |

|                                |                                                                                                                                |
|--------------------------------|--------------------------------------------------------------------------------------------------------------------------------|
| •     | Advocate, MD Insurance of the Southwest Inc. (“Advocate, MD Insurance”), a wholly owned subsidiary of Advocate, MD |

|                                |                                                                              |
|--------------------------------|------------------------------------------------------------------------------|
| •     | Advocate Insurance Services, Inc., a wholly owned subsidiary of Advocate, MD |

|                                |                                                                                                          |
|--------------------------------|----------------------------------------------------------------------------------------------------------|
| •     | Anesthesiologists Professional Assurance Company (“APAC”), a wholly owned subsidiary of FPIC |

|                                |                                                                |
|--------------------------------|----------------------------------------------------------------|
| •     | FPIC Insurance Agency, Inc., a wholly owned subsidiary of FPIC |

----

|                                |                                                           |
|--------------------------------|-----------------------------------------------------------|
| •     | Loss Development Methods (Incurred and Paid Development); |

|                                |                                                  |
|--------------------------------|--------------------------------------------------|
| •     | Berquist-Sherman Case Reserve Adjustment Method; |

|                                |                             |
|--------------------------------|-----------------------------|
| •     | Frequency/Severity Methods; |

|                                |                                                                                        |
|--------------------------------|----------------------------------------------------------------------------------------|
| •     | Allocated Loss Adjustment Expense Development Methods (Incurred and Paid Development); |

|                                |                                                            |
|--------------------------------|------------------------------------------------------------|
| •     | Bornhuetter-Ferguson Expected Loss Projection Methods; and |

|                                |                            |
|--------------------------------|----------------------------|
| •     | Backward Recursive Method. |

----

|                                |                                                                                                                 |
|--------------------------------|-----------------------------------------------------------------------------------------------------------------|
| •     | Frequency and severity trends (the numbers of claims and how much we expect to ultimately pay for such claims); |

|                                |                                           |
|--------------------------------|-------------------------------------------|
| •     | The timing or pattern of future payments; |

|                                |                                                                            |
|--------------------------------|----------------------------------------------------------------------------|
| •     | The amount of defense costs we will pay for each claim or group of claims; |

|                                |                                                                                                                                                                                                       |
|--------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •     | Frequency of claims closed with indemnity payments (the percentage of claims received that ultimately result in a loss payment versus those that are resolved and closed without a loss payment); and |

|                                |                                                                                |
|--------------------------------|--------------------------------------------------------------------------------|
| •     | Inflationary trends that are expected to bear on future loss and LAE payments. |

----

|                                |                                                                                                                                                                   |
|--------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •     | Quoted Prices in Active Markets for Identical Assets:  Level 1 includes unadjusted quoted prices for identical assets or liabilities in active markets. |

|                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|--------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •     | Significant Other Observable Inputs: Level 2 includes inputs other than quoted prices included within Level 1 that are observable for assets or liabilities either directly or indirectly.  Level 2 inputs include, among other items, quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, and inputs other than quoted prices that are observable for the asset or liability such as interest rates and yield curves. |

|                                |                                                                                                                                                                                            |
|--------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •     | Significant Unobservable Inputs: Level 3 inputs are unobservable and reflect management's judgments about assumptions that market participants would use in pricing an asset or liability. |

|                                |                                                                                                                                                                                                                                 |
|--------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •     | U.S. Treasuries include those securities issued by the U.S government or a U.S. Agency.  These securities have an average credit quality of Aaa and represent approximately 7 percent of our fixed income securities. |

|                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|--------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •     | States, municipalities and political subdivisions include securities issued by state and local governments.  General obligation bonds are backed by the full faith and credit of the issuing entity (e.g., government authority) and revenue bonds are backed by a specific revenue stream.  Lease revenue bonds are backed by specific lease arrangements, where the principal and interest are generally paid from annual appropriations from the governmental entity that benefits from the facility (e.g., school, prison facility).  Pre-refunded bonds are backed by Treasuries and/or Agencies.  These 'sub'-sectors (e.g., general obligation, revenue, lease, pre-refunded) can be taxable or tax-advantaged.  These securities are diversified throughout the U.S, have an average credit quality of |

----

|                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|--------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •     | Corporate securities include securities issued by various corporate entities across different industries.  Both investment grade and non-investment grade securities are included within this category.  The average credit quality of investment grade corporate securities is A2 and these securities represent approximately 32 percent of our fixed income securities.  The average credit quality of non-investment grade corporate securities is Ba3 and these securities represent approximately 3 percent of our fixed income securities. |

|                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|--------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •     | Residential mortgage-backed securities include structured securities that are issued based on underlying residential mortgages.  Within this category are bonds that are agency or non-agency related.  Agency related bonds are from the vintage years 1988 through 2010, have an average credit quality of Aaa and represent approximately 14 percent of our fixed income securities.  Non-agency related bonds are from the vintage years 2002 through 2007, have an average credit quality of Baa3 and represent approximately 1 percent of our fixed income securities. |

|                                |                                                                                                                                                                                                                                                                                                                                                                                    |
|--------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •     | Commercial mortgage-backed securities (“CMBS”) reflect structured securities issued based on underlying commercial mortgages (such as on hotels, malls, or offices) and are from the vintage years 2002 and 2005 through 2008.  These securities have an average credit quality of Aa3 and represent approximately 6 percent of our fixed income securities. |

|                                |                                                                                                                                                                                                                                                                                                             |
|--------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •     | Asset-backed securities include structured securities issued based on underlying assets, primarily automobile loans, credit cards, and home equity lines of credit.  These securities have an average credit quality of Aa1 and represent approximately 4 percent of our fixed income securities. |

|                                |                                                                                                                                                                                                                                                                                 |
|--------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •     | Foreign government securities include securities issued by the Canadian government, a Canadian agency or one of its provinces.  These securities are denominated in U.S. dollars, have an average credit quality of Aa1 and represent 1 percent of our fixed income securities. |

|                                |                                                                                                                                                                                                    |
|--------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •     | Common and preferred equity securities that trade in active markets are classified within Level 1, as fair values are based on quoted market prices for identical assets as of the reporting date. |

|                                |                                                                                                                                                                                                                                                                                                        |
|--------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •     | Preferred equity securities that trade in less active markets are classified within Level 2, as fair values are based on valuation methodologies, the significant inputs into which may include, but are not limited to, benchmark yields, reported trades, broker / dealer quotes and issuer spreads. |

|                                |                                                                                                                                                                                                                                                                                   |
|--------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •     | Securities, predominantly mutual funds, held in rabbi trusts maintained by the Company for deferred compensation plans, are included in other invested assets and classified within the valuation hierarchy on the same basis as the Company's actively traded equity securities. |

|                                |                                                                                                                                                                             |
|--------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •     | For our investment in the limited partnership, fair value is classified as Level 3, as it is based on net asset values and financial statements of the limited partnership. |

|                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|--------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •     | The acquisition of Advocate, MD includes a contingent consideration arrangement that provides for additional consideration to be paid by the Company for Advocate, MD based on its attainment of targets with respect to direct written premiums, combined ratio and underwriting profits over a two-year period from the acquisition date.  Up to forty percent of the contingent consideration is payable based on the first year of performance, with any remaining amount payable following the second year of performance.  The range of undiscounted amounts we could pay under the contingent consideration agreement is between $0.9 million and $12.0 million.  Our measure of the estimated fair value of the contingent consideration is based on significant inputs not observable in the marketplace and is classified as a Level 3 fair value measurement based on accounting guidance.  We recognize a liability for the estimated fair value of acquisition-related contingent consideration using a cash flow model adjusted quarterly for probability weighted targets to be achieved over the earn-out period.  Changes in the calculation of our liability for contingent consideration are reflected as income or expense in the period the change is incurred. |

|                                |                                                                                                                                                                                                                                                                                                                                                              |
|--------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •     | Our derivative instruments, principally interest rate swaps, are valued using models that primarily use market observable inputs and are classified as Level 2, as their fair value is largely based on observable inputs over the life of the swaps in a liquid market.  The fair value of the interest rate swaps is calculated by comparing the |

----

|                                |                                                                                |
|--------------------------------|--------------------------------------------------------------------------------|
| •     | The length of time and the extent to which fair value has been less than cost; |

|                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|--------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •     | If an investment's fair value declines below cost, we determine if there is adequate evidence to overcome the presumption that the decline is other-than-temporary. Supporting evidence could include a recovery in the investment's fair value subsequent to the date of the statement of financial position, a return of the investee to profitability and the investee's improved financial performance and future prospects (such as earnings trends or recent dividend payments), or the improvement of financial condition and prospects for the investee's geographic region and industry. |

|                                |                                                                                                                                                                                                                                                                                                                                   |
|--------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •     | Issuer-specific considerations, including an event of missed or late payment or default, adverse changes in key financial ratios, an increase in nonperforming loans, a decline in earnings substantially below that of the investee's peers, downgrading of the investee's debt rating or suspension of trading in the security; |

|                                |                                                                                                                                                                                                                                   |
|--------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •     | The occurrence of a significant economic event that may affect the industry in which the investee participates, including a change that might adversely impact the investee's ability to achieve profitability in its operations; |

|                                |                                                                                                                                |
|--------------------------------|--------------------------------------------------------------------------------------------------------------------------------|
| •     | Our intent and ability to hold the investment for a sufficient period to allow for any anticipated recovery in fair value; and |

|                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|--------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •     | With regard to CMBS, we also evaluate key statistics such as breakeven constant default rates and credit enhancement levels. The breakeven constant default rate indicates the percentage of the pool's outstanding loans that must default each and every year for a CMBS class/tranche to experience its first dollar of principal loss. Credit enhancements indicate how much protection, or “cushion,” exists to absorb losses in a particular deal before an actual loss would impact a specific security. |

----

----

|                                                 |                                                   |                                                        |                                                  |      |      |         |        |
|-------------------------------------------------|---------------------------------------------------|--------------------------------------------------------|--------------------------------------------------|------|------|---------|--------|
| (in thousands)  As of January 1, 2008 | Before Application of Measurement Date Provisions |  Adjustments to Adopt Measurement Date Provisions | After Application of Measurement Date Provisions |
| Retained earnings                               | $                                                 | 295,586                                                |                                             | (89  | )    | 295,497 |   |
| Accumulated other comprehensive loss            | (884                                              | )                                                      | (58                                              | )    | (942 | )       |
| Total shareholders' equity                      | $                                                 | 294,702                                                |                                             | (147 | )    | 294,555 |   |

----

----

|                |        |        |        |        |
|----------------|--------|--------|--------|--------|
| (in thousands) |   |   |
|           |   |   |
| Revenue        | $      | 3,579  |   |   |
| Net income     | $      | 466    |   |   |

|                |                                 |         |        |         |        |
|----------------|---------------------------------|---------|--------|---------|--------|
| (in thousands) | For the year ended December 31, |
|           | 2009                            | 2008    |
| Revenue        | $                               | 215,216 |   | 215,401 |   |
| Net income     | $                               | 35,271  |   | 41,855  |   |

|                                                                                                                                     |        |        |        |
|-------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|
| (in thousands)                                                                                                                      |   |
| Consideration                                                                                                                       |   |
| Cash consideration paid at closing                                                                                                  | $      | 33,600 |   |
| Cash paid for non-compete agreement                                                                                                 | 2,000  |   |
| Total cash paid                                                                                                                     | 35,600 |   |
| Estimated contingent consideration                                                                                                  | 7,008  |   |
| Acquisition date fair value of consideration                                                                                        | $      | 42,608 |   |
|                                                                                                                                |   |
| Acquisition-related costs (included in other expenses in our consolidated statement of income for the year ended December 31, 2009) | $      | 737    |   |

----

|                                                                            |         |        |        |
|----------------------------------------------------------------------------|---------|--------|--------|
| (in thousands)                                                             |    |
| Recognized amounts of identifiable assets acquired and liabilities assumed |    |
| Cash and cash equivalents                                                  | $       | 6,031  |   |
| Investments, available for sale                                            | 74,158  |   |
| Premiums receivable                                                        | 4,018   |   |
| Accrued investment income                                                  | 604     |   |
| Due from reinsurers on unpaid losses and advance premiums                  | 4,987   |   |
| Ceded unearned premiums                                                    | 1,516   |   |
| Deferred policy acquisition costs                                          | 1,591   |   |
| Other assets                                                               | 1,685   |   |
| Policy liabilities and accruals                                            | (56,823 | )      |
| Deferred income taxes                                                      | (887    | )      |
| Senior bank debt                                                           | (9,000  | )      |
| Other liabilities                                                          | (2,757  | )      |
| Total identifiable net assets                                              | 25,123  |   |
|                                                                       |    |
| Goodwill                                                                   | 10,206  |   |
| Intangible assets                                                          | 7,279   |   |
| Acquisition date fair value                                                | $       | 42,608 |   |

----

|                                                                                     |                                |         |                         |         |                                    |        |         |         |        |         |         |        |         |         |        |
|-------------------------------------------------------------------------------------|--------------------------------|---------|-------------------------|---------|------------------------------------|--------|---------|---------|--------|---------|---------|--------|---------|---------|--------|
| (in thousands)                                                                      | As of December 31, 2010        |
|                                                                                | Fair Value Measurements Using: |    | Netting Adjustments (1) |    | Assets / Liabilities at Fair Value |
|                                                                                | (Level 1)                      |    | (Level 2)               |    | (Level 3)                          |   |    |
| Assets                                                                              |                           |    |                    |    |                               |   |    |    |   |
| Fixed income securities, available-for-sale, including short-term investments       |                           |    |                    |    |                               |   |    |    |   |
| U.S. Treasuries                                                                     | $                              | — |                    |    | 43,323                             |   |    | — |   |    | — |   |    | 43,323  |   |
| States, municipalities and political subdivisions                                   | —                        |    |                    | 201,507 |                               |   | — |    |   | — |    |   | 201,507 |    |
| Corporate debt securities                                                           | —                        |    |                    | 218,904 |                               |   | — |    |   | — |    |   | 218,904 |    |
| Residential mortgage-backed securities                                              | —                        |    |                    | 90,813  |                               |   | — |    |   | — |    |   | 90,813  |    |
| Commercial mortgage-backed securities                                               | —                        |    |                    | 39,796  |                               |   | — |    |   | — |    |   | 39,796  |    |
| Asset-backed securities                                                             | —                        |    |                    | 24,764  |                               |   | — |    |   | — |    |   | 24,764  |    |
| Foreign government securities                                                       | —                        |    |                    | 8,130   |                               |   | — |    |   | — |    |   | 8,130   |    |
| Total fixed income securities, available-for-sale, including short-term investments | $                              | — |                    |    | 627,237                            |   |    | — |   |    | — |   |    | 627,237 |   |
|                                                                                |                           |    |                    |    |                               |   |    |    |   |
| Equity securities, available-for-sale                                               |                           |    |                    |    |                               |   |    |    |   |    |    |
| Common equity securities                                                            | $                              | 10,544  |                    |    | —                            |   |    | — |   |    | — |   |    | 10,544  |   |
| Preferred equity securities                                                         | 817                            |    |                    | 569     |                               |   | — |    |   | — |    |   | 1,386   |    |
| Total equity securities, available-for-sale                                         | $                              | 11,361  |                    |    | 569                                |   |    | — |   |    | — |   |    | 11,930  |   |
|                                                                                |                           |    |                    |    |                               |   |    |    |   |
| Other invested assets                                                               |                           |    |                    |    |                               |   |    |    |   |    |    |
| Deferred compensation plan assets held in rabbi trust                               | $                              | 3,361   |                    |    | —                            |   |    | — |   |    | — |   |    | 3,361   |   |
| Limited partnership                                                                 | —                        |    |                    | — |                               |   | 72      |    |   | — |    |   | 72      |    |
| Total other invested assets                                                         | $                              | 3,361   |                    |    | —                            |   |    | 72      |   |    | — |   |    | 3,433   |   |
|                                                                                |                           |    |                    |    |                               |   |    |    |   |
| Total                                                                               | $                              | 14,722  |                    |    | 627,806                            |   |    | 72      |   |    | — |   |    | 642,600 |   |
|                                                                                |                           |    |                    |    |                               |   |    |    |   |
| Liabilities                                                                         |                           |    |                    |    |                               |   |    |    |   |    |    |
| Derivative financial instruments                                                    | $                              | — |                    |    | 3,219                              |   |    | — |   |    | (2,400  | )      |    | 819     |   |
| Contingent consideration                                                            | —                        |    |                    | — |                               |   | 9,540   |    |   | — |    |   | 9,540   |    |
| Total                                                                               | $                              | — |                    |    | 3,219                              |   |    | 9,540   |   |    | (2,400  | )      |    | 10,359  |   |

|                             |                                                                                                                                                                                             |
|-----------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (1)     | Amounts represent the impact of legally enforceable master netting agreements that allow FPIC to settle the position and also cash collateral held or placed with the same counter parties. |

----

|                                                                                     |                                |         |                         |         |                                    |        |         |         |        |         |         |        |         |         |        |
|-------------------------------------------------------------------------------------|--------------------------------|---------|-------------------------|---------|------------------------------------|--------|---------|---------|--------|---------|---------|--------|---------|---------|--------|
| (in thousands)                                                                      | As of December 31, 2009        |
|                                                                                | Fair Value Measurements Using: |    | Netting Adjustments (1) |    | Assets / Liabilities at Fair Value |
|                                                                                | (Level 1)                      |    | (Level 2)               |    | (Level 3)                          |   |    |
| Assets                                                                              |                           |    |                    |    |                               |   |    |    |   |
| Fixed income securities, available-for-sale, including short-term investments       |                           |    |                    |    |                               |   |    |    |   |
| U.S. Treasuries                                                                     | $                              | — |                    |    | 41,229                             |   |    | — |   |    | — |   |    | 41,229  |   |
| States, municipalities and political subdivisions                                   | —                        |    |                    | 251,849 |                               |   | — |    |   | — |    |   | 251,849 |    |
| Corporate debt securities                                                           | —                        |    |                    | 202,495 |                               |   | — |    |   | — |    |   | 202,495 |    |
| Residential mortgage-backed securities                                              | —                        |    |                    | 102,212 |                               |   | — |    |   | — |    |   | 102,212 |    |
| Commercial mortgage-backed securities                                               | —                        |    |                    | 34,774  |                               |   | — |    |   | — |    |   | 34,774  |    |
| Asset-backed securities                                                             | —                        |    |                    | 33,084  |                               |   | — |    |   | — |    |   | 33,084  |    |
| Foreign government securities                                                       | —                        |    |                    | — |                               |   | — |    |   | — |    |   | — |    |
| Total fixed income securities, available-for-sale, including short-term investments | $                              | — |                    |    | 665,643                            |   |    | — |   |    | — |   |    | 665,643 |   |
|                                                                                |                           |    |                    |    |                               |   |    |    |   |
| Equity securities, available-for-sale                                               |                           |    |                    |    |                               |   |    |    |   |
| Common equity securities                                                            | $                              | 9,859   |                    |    | —                            |   |    | — |   |    | — |   |    | 9,859   |   |
| Preferred equity securities                                                         | 825                            |    |                    | 528     |                               |   | — |    |   | — |    |   | 1,353   |    |
| Total equity securities, available-for-sale                                         | $                              | 10,684  |                    |    | 528                                |   |    | — |   |    | — |   |    | 11,212  |   |
|                                                                                |                           |    |                    |    |                               |   |    |    |   |
| Other invested assets                                                               |                           |    |                    |    |                               |   |    |    |   |
| Deferred compensation plan assets held in rabbi trust                               | $                              | 3,283   |                    |    | —                            |   |    | — |   |    | — |   |    | 3,283   |   |
| Limited partnership                                                                 | —                        |    |                    | — |                               |   | 77      |    |   | — |    |   | 77      |    |
| Total other invested assets                                                         | $                              | 3,283   |                    |    | —                            |   |    | 77      |   |    | — |   |    | 3,360   |   |
|                                                                                |                           |    |                    |    |                               |   |    |    |   |
| Total                                                                               | $                              | 13,967  |                    |    | 666,171                            |   |    | 77      |   |    | — |   |    | 680,215 |   |
|                                                                                |                           |    |                    |    |                               |   |    |    |   |
| Liabilities                                                                         |                           |    |                    |    |                               |   |    |    |   |
| Derivative financial instruments                                                    | $                              | — |                    |    | 2,601                              |   |    | — |   |    | (2,260  | )      |    | 341     |   |
| Contingent consideration                                                            | —                        |    |                    | — |                               |   | 7,008   |    |   | — |    |   | 7,008   |    |
| Total                                                                               | $                              | — |                    |    | 2,601                              |   |    | 7,008   |   |    | (2,260  | )      |    | 7,349   |   |

|                             |                                                                                                                                                                                             |
|-----------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (1)     | Amounts represent the impact of legally enforceable master netting agreements that allow FPIC to settle the position and also cash collateral held or placed with the same counter parties. |

----

|                                                                                                                |                                             |                                      |                                      |         |         |         |        |
|----------------------------------------------------------------------------------------------------------------|---------------------------------------------|--------------------------------------|--------------------------------------|---------|---------|---------|--------|
| (in thousands)                                                                                                 | Fixed Income Securities, available for sale |
|                                                                                                           | For the year ended December 31, 2010        | For the year ended December 31, 2009 | For the year ended December 31, 2008 |
| Beginning balance                                                                                              | $                                           | —                              |                                 | — |    | 3,359   |   |
| Total gains (losses) (realized and unrealized)                                                                 |                                        |                                 |                                 |
| Included in net income                                                                                         | —                                     |                                 | —                              |    | — |    |
| Included in other comprehensive income                                                                         | —                                     |                                 | —                              |    | — |    |
| Purchases, issuances and settlements                                                                           | —                                     |                                 | —                              |    | — |    |
| Transfers into / out of Level 3                                                                                | —                                     |                                 | —                              |    | (3,359  | )       |
| Ending balance                                                                                                 | $                                           | —                              |                                 | — |    | — |   |
|                                                                                                           |                                        |                                 |                                 |
| Changes in unrealized gains (losses) included in earnings for the period for Level 3 assets held at period-end | $                                           | —                              |                                 | — |    | — |   |

|                                                                                                                |                                      |                                      |                                      |         |         |        |        |
|----------------------------------------------------------------------------------------------------------------|--------------------------------------|--------------------------------------|--------------------------------------|---------|---------|--------|--------|
| (in thousands)                                                                                                 | Other Invested Assets                |
|                                                                                                           | For the year ended December 31, 2010 | For the year ended December 31, 2009 | For the year ended December 31, 2008 |
| Beginning balance                                                                                              | $                                    | 77                                   |                                 | 84      |    | 553    |   |
| Total gains (losses) (realized and unrealized)                                                                 |                                 |                                 |                                 |
| Included in net income                                                                                         | (22                                  | )                                    | 16                                   |    | (442    | )      |
| Included in other comprehensive income                                                                         | 17                                   |                                 | (31                                  | )       | (34     | )      |
| Purchases, issuances and settlements                                                                           | —                              |                                 | 8                                    |    | 7       |   |
| Transfers into / out of Level 3                                                                                | —                              |                                 | —                              |    | — |   |
| Ending balance                                                                                                 | $                                    | 72                                   |                                 | 77      |    | 84     |   |
|                                                                                                           |                                 |                                 |                                 |
| Changes in unrealized gains (losses) included in earnings for the period for Level 3 assets held at period-end | $                                    | —                              |                                 | — |    | (350   | )      |

|                                                                                                                |                                      |                                      |                                      |         |         |         |        |
|----------------------------------------------------------------------------------------------------------------|--------------------------------------|--------------------------------------|--------------------------------------|---------|---------|---------|--------|
| (in thousands)                                                                                                 | Contingent Consideration             |
|                                                                                                           | For the year ended December 31, 2010 | For the year ended December 31, 2009 | For the year ended December 31, 2008 |
| Beginning balance                                                                                              | $                                    | (7,008                               | )                                    | — |    | — |   |
| Total gains (losses) (realized and unrealized)                                                                 |                                 |                                 |                                 |
| Included in net income                                                                                         | (2,532                               | )                                    | —                              |    | — |    |
| Included in other comprehensive income                                                                         | —                              |                                 | —                              |    | — |    |
| Purchases, issuances and settlements                                                                           | —                              |                                 | (7,008                               | )       | — |    |
| Transfers into / out of Level 3                                                                                | —                              |                                 | —                              |    | — |    |
| Ending balance                                                                                                 | $                                    | (9,540                               | )                                    | (7,008  | )       | — |   |
|                                                                                                           |                                 |                                 |                                 |
| Changes in unrealized gains (losses) included in earnings for the period for Level 3 assets held at period-end | $                                    | —                              |                                 | — |    | — |   |

----

|                                |                                                                                                   |
|--------------------------------|---------------------------------------------------------------------------------------------------|
| •     | Cash - Carrying value approximates the fair value due to the short maturity of these instruments. |

|                                |                                                                                                                                                                                                                                                                                                                                                                                                      |
|--------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •     | Other invested assets - Other invested assets include an investment in a non-public entity and investments held as part of a deferred compensation plan, which are both reported at their fair values. See the discussion in Note 4, Fair Value Measurements, for the determination of fair value on our investment in the non-public entity and investments held in our deferred compensation plan. |

|                                |                                                                                                                                                                                                                                                                          |
|--------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •     | Long-term debt - The fair value of our outstanding long-term debt is based on the present value of underlying cash flows discounted at rates available for similar debt. Our own nonperformance risk was considered in determining the fair value of our long-term debt. |

|                                |                                                                                                                                                                       |
|--------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •     | Derivatives - interest rate swaps.  See the discussion in Note 4, Fair Value Measurements, for additional information on our fair value methodology over derivatives. |

|                                                         |                         |                         |                |            |        |        |        |        |        |
|---------------------------------------------------------|-------------------------|-------------------------|----------------|------------|--------|--------|--------|--------|--------|
| (in thousands)                                          | As of December 31, 2010 | As of December 31, 2009 |
|                                                    | Carrying Value          | Fair Value              | Carrying Value | Fair Value |
| Financial assets:                                       |                    |                    |           |       |
| Cash and cash equivalents                               | $                       | 58,726                  |           | 58,726     |   | 58,626 |   | 58,626 |   |
| Other invested assets                                   |                    |                    |           |       |
| Deferred compensation plan assets held in a rabbi trust | 3,361                   |                    | 3,361          |       | 3,283  |   | 3,283  |   |
| Limited partnership                                     | 72                      |                    | 72             |       | 77     |   | 77     |   |
| Other assets                                            | 1,083                   |                    | 1,083          |       | 1,083  |   | 1,083  |   |
| Total other invested assets                             | 4,516                   |                    | 4,516          |       | 4,443  |   | 4,443  |   |
|                                                    |                    |                    |           |       |
| Total financial assets                                  | $                       | 63,242                  |           | 63,242     |   | 63,069 |   | 63,069 |   |
|                                                    |                    |                    |           |       |
| Financial liabilities:                                  |                    |                    |           |       |
| Long-term debt                                          | $                       | 46,083                  |           | 51,369     |   | 46,083 |   | 48,925 |   |
| Derivative financial instruments                        | 3,219                   |                    | 3,219          |       | 2,601  |   | 2,601  |   |
| Total financial liabilities                             | $                       | 49,302                  |           | 54,588     |   | 48,684 |   | 51,526 |   |

----

|                                                                                         |                               |                        |                         |            |        |        |         |         |        |
|-----------------------------------------------------------------------------------------|-------------------------------|------------------------|-------------------------|------------|--------|--------|---------|---------|--------|
| (in thousands)                                                                          | As of December 31, 2010       |
|                                                                                    | Amortized Cost of Investments | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value |
| Fixed income securities, available-for-sale, including short-term investments           |                          |                   |                    |       |   |   |    |    |
| U.S. Treasuries                                                                         | $                             | 42,274                 |                    | 1,141      |   | 92     |    | 43,323  |   |
| States, municipalities and political subdivisions                                       | 195,416                       |                   | 6,298                   |       | 207    |   | 201,507 |    |
| Corporate debt securities                                                               | 208,250                       |                   | 11,532                  |       | 878    |   | 218,904 |    |
| Residential mortgage-backed securities                                                  | 89,143                        |                   | 2,446                   |       | 776    |   | 90,813  |    |
| Commercial mortgage-backed securities                                                   | 36,899                        |                   | 3,023                   |       | 126    |   | 39,796  |    |
| Asset-backed securities                                                                 | 24,069                        |                   | 712                     |       | 17     |   | 24,764  |    |
| Foreign government securities                                                           | 8,157                         |                   | 80                      |       | 107    |   | 8,130   |    |
| Equity securities, available-for-sale                                                   | 9,605                         |                   | 2,328                   |       | 3      |   | 11,930  |    |
| Other invested assets                                                                   | 4,535                         |                   | —                 |       | 19     |   | 4,516   |    |
| Total fixed income and equity securities, available-for-sale, and other invested assets | $                             | 618,348                |                    | 27,560     |   | 2,225  |    | 643,683 |   |

|                                                                                         |                               |                        |                         |            |         |        |         |         |        |
|-----------------------------------------------------------------------------------------|-------------------------------|------------------------|-------------------------|------------|---------|--------|---------|---------|--------|
| (in thousands)                                                                          | As of December 31, 2009       |
|                                                                                    | Amortized Cost of Investments | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value |
| Fixed income securities, available-for-sale, including short-term investments           |                          |                   |                    |       |    |   |    |    |
| U.S. Treasuries                                                                         | $                             | 41,330                 |                    | 872        |    | 973    |    | 41,229  |   |
| States, municipalities and political subdivisions                                       | 244,203                       |                   | 7,868                   |       | 222     |   | 251,849 |    |
| Corporate debt securities                                                               | 192,934                       |                   | 10,035                  |       | 474     |   | 202,495 |    |
| Residential mortgage-backed securities                                                  | 102,028                       |                   | 2,104                   |       | 1,920   |   | 102,212 |    |
| Commercial mortgage-backed securities                                                   | 36,272                        |                   | 1,094                   |       | 2,592   |   | 34,774  |    |
| Asset-backed securities                                                                 | 32,047                        |                   | 1,083                   |       | 46      |   | 33,084  |    |
| Foreign government securities                                                           | —                       |                   | —                 |       | — |   | — |    |
| Equity securities, available-for-sale                                                   | 10,017                        |                   | 1,195                   |       | — |   | 11,212  |    |
| Other invested assets                                                                   | 4,473                         |                   | —                 |       | 30      |   | 4,443   |    |
| Total fixed income and equity securities, available-for-sale, and other invested assets | $                             | 663,304                |                    | 24,251     |    | 6,257  |    | 681,298 |   |

----

|                                                                                         |                         |                 |        |                         |            |                 |                       |        |            |                 |        |        |         |         |         |         |        |
|-----------------------------------------------------------------------------------------|-------------------------|-----------------|--------|-------------------------|------------|-----------------|-----------------------|--------|------------|-----------------|--------|--------|---------|---------|---------|---------|--------|
| (in thousands)                                                                          | As of December 31, 2010 |
|                                                                                    | Total                   |            |   | Less Than Twelve Months |       |            | Twelve Months or More |
|                                                                                    | Fair Value              | Unrealized Loss |   |                    | Fair Value | Unrealized Loss |                  |   | Fair Value | Unrealized Loss |
| Fixed income securities, available-for-sale, including short-term investments           |                    |            |   |                    |       |            |                  |   |       |            |   |   |    |    |    |    |
| U.S. Treasury securities                                                                | $                       | 13,140          |   | 92                      |       |            |                  | 13,140 |       | 92              |   |   |    | — |    | — |   |
| States, municipalities and political subdivisions                                       | 13,171                  |            | 207    |                    |       |            | 12,707                |   | 203        |            |   |   | 464     |    | 4       |    |
| Corporate debt securities                                                               | 39,377                  |            | 878    |                    |       |            | 38,877                |   | 856        |            |   |   | 500     |    | 22      |    |
| Residential mortgage-backed securities                                                  | 25,267                  |            | 776    |                    |       |            | 20,367                |   | 461        |            |   |   | 4,900   |    | 315     |    |
| Commercial mortgage-backed securities                                                   | 2,454                   |            | 126    |                    |       |            | 1,067                 |   | 8          |            |   |   | 1,387   |    | 118     |    |
| Asset-backed securities                                                                 | 1,991                   |            | 17     |                    |       |            | 1,965                 |   | 8          |            |   |   | 26      |    | 9       |    |
| Foreign government securities                                                           | 3,629                   |            | 107    |                    |       |            | 3,629                 |   | 107        |            |   |   | — |    | — |    |
| Equity securities, available-for-sale                                                   | 6                       |            | 3      |                    |       |            | 6                     |   | 3          |            |   |   | — |    | — |    |
| Other invested assets                                                                   | 72                      |            | 19     |                    |       |            | —               |   | —    |            |   |   | 72      |    | 19      |    |
| Total fixed income and equity securities, available-for-sale, and other invested assets | $                       | 99,107          |   | 2,225                   |       |            |                  | 91,758 |       | 1,738           |   |   |    | 7,349   |    | 487     |   |

|                                                                                         |                         |                 |         |                         |            |                 |                       |        |            |                 |        |        |         |         |         |         |        |
|-----------------------------------------------------------------------------------------|-------------------------|-----------------|---------|-------------------------|------------|-----------------|-----------------------|--------|------------|-----------------|--------|--------|---------|---------|---------|---------|--------|
| (in thousands)                                                                          | As of December 31, 2009 |
|                                                                                    | Total                   |            |    | Less Than Twelve Months |       |            | Twelve Months or More |
|                                                                                    | Fair Value              | Unrealized Loss |    |                    | Fair Value | Unrealized Loss |                  |   | Fair Value | Unrealized Loss |
| Fixed income securities, available-for-sale, including short-term investments           |                    |            |    |                    |       |            |                  |   |       |            |   |   |    |    |    |    |
| U.S. Treasury securities                                                                | $                       | 22,428          |    | 973                     |       |            |                  | 22,428 |       | 973             |   |   |    | — |    | — |   |
| States, municipalities and political subdivisions                                       | 21,074                  |            | 222     |                    |       |            | 20,588                |   | 189        |            |   |   | 486     |    | 33      |    |
| Corporate debt securities                                                               | 31,176                  |            | 474     |                    |       |            | 23,428                |   | 116        |            |   |   | 7,748   |    | 358     |    |
| Residential mortgage-backed securities                                                  | 39,056                  |            | 1,920   |                    |       |            | 30,784                |   | 459        |            |   |   | 8,272   |    | 1,461   |    |
| Commercial mortgage-backed securities                                                   | 19,594                  |            | 2,592   |                    |       |            | 1,881                 |   | 20         |            |   |   | 17,713  |    | 2,572   |    |
| Asset-backed securities                                                                 | 663                     |            | 46      |                    |       |            | 564                   |   | 25         |            |   |   | 99      |    | 21      |    |
| Equity securities, available-for-sale                                                   | —                 |            | — |                    |       |            | —               |   | —    |            |   |   | — |    | — |    |
| Other invested assets                                                                   | 77                      |            | 30      |                    |       |            | —               |   | —    |            |   |   | 77      |    | 30      |    |
| Total fixed income and equity securities, available-for-sale, and other invested assets | $                       | 134,068         |    | 6,257                   |       |            |                  | 99,673 |       | 1,782           |   |   |    | 34,395  |    | 4,475   |   |

----

|                        |                         |        |                       |        |                        |
|------------------------|-------------------------|--------|-----------------------|--------|------------------------|
|                   | Gross Unrealized Losses |   |                  |
| As of                  | Less than twelve months |   | Twelve months or more |   | Gross Unrealized Gains |
| December 31, 2010 | 107                     |   | 20                    |   | 623                    |
| December 31, 2009 | 179                     |   | 59                    |   | 537                    |

|                              |                         |        |                          |        |                                       |        |   |      |   |
|------------------------------|-------------------------|--------|--------------------------|--------|---------------------------------------|--------|---|------|---|
|                         | As of December 31, 2010 |
| Gross Unrealized Losses      | Number of Securities    |   | Fair Value(in thousands) |   | Gross Unrealized Losses(in thousands) |
| Less than 15%                | 18                      |   | $                        | 7,251  |                                  |   | $ | (459 | ) |
| Equal to or greater than 15% | 2                       |   | 98                       |   |                                  | (28    | ) |
|                         | 20                      |   | $                        | 7,349  |                                  |   | $ | (487 | ) |

|                                   |                                                       |                         |                                     |                         |                         |        |      |      |     |      |   |
|-----------------------------------|-------------------------------------------------------|-------------------------|-------------------------------------|-------------------------|-------------------------|--------|------|------|-----|------|---|
| (in thousands)                    |                                                  |                    | Severity of Gross Unrealized Losses |
| Length of Gross Unrealized Losses | Fair Value of Securities with Gross Unrealized Losses | Gross Unrealized Losses | Less than 5 percent                 | 5 percent to 15 percent | Greater than 15 percent |
| Less than twelve months           | $                                                     | 91,758                  |                                | (1,738                  | )                       | (1,292 | )    | (315 | )   | (131 | ) |
| Twelve months or more             | 7,349                                                 |                    | (487                                | )                       | (66                     | )      | (393 | )    | (28 | )    |
| Total                             | $                                                     | 99,107                  |                                | (2,225                  | )                       | (1,358 | )    | (708 | )   | (159 | ) |

----

|                                                                      |                                                 |                      |                                                 |                      |                                                 |                      |         |        |         |        |         |         |        |    |        |
|----------------------------------------------------------------------|-------------------------------------------------|----------------------|-------------------------------------------------|----------------------|-------------------------------------------------|----------------------|---------|--------|---------|--------|---------|---------|--------|----|--------|
|                                                                 | 2010                                            | 2009                 | 2008                                            |
|                                                                 | Other-than-temporary impairments (in thousands) | Number of securities | Other-than-temporary impairments (in thousands) | Number of securities | Other-than-temporary impairments (in thousands) | Number of securities |
| Fixed income securities, available-for-sale                          | $                                               | (873                 | )                                               | 6                    |                                            | (2,077               | )       | 6      |    | (6,302 | )       | 13      |   |
| Equity securities, available-for-sale                                | —                                         |                 | —                                         |                 | —                                         |                 | — |   | (6,764  | )      | 6       |    |
| Other invested assets                                                | —                                         |                 |                                            | —              |                                            | —              |    | (442   | )       | 3      |    |
| Portion of OTTI recognized in accumulated other comprehensive income | 565                                             |                 | —                                         |                 | —                                         |                 | — |   | — |   | — |    |
| Net OTTI recognized in net income                                    | $                                               | (308                 | )                                               | 6                    |                                            | $                    | (2,077  | )      | 6       |   | $       | (13,508 | )      | 22 |   |

|                                        |                                                                         |                                       |                       |        |         |        |        |         |        |
|----------------------------------------|-------------------------------------------------------------------------|---------------------------------------|-----------------------|--------|---------|--------|--------|---------|--------|
| (in thousands)                         | For the year ended December 31, 2010                                    |
|                                   | Fixed income securities, available-for-sale, and short-term investments | Equity securities, available-for-sale | Other invested assets | Total  |
| Gross realized gains                   | $                                                                       | 4,258                                 |                  | 87     |    | 257    |   | 4,602   |   |
| Gross realized losses                  | (74                                                                     | )                                     | —               |   | (72     | )      | (146   | )       |
| Credit related impairment losses       | (308                                                                    | )                                     | —               |   | — |   | (308   | )       |
| Net realized investment gains (losses) | $                                                                       | 3,876                                 |                  | 87     |    | 185    |   | 4,148   |   |
|                                   |                                                                    |                                  |                  |   |
| Proceeds from sales or maturities      | $                                                                       | 231,951                               |                  | 499    |    | 394    |   | 232,844 |   |

|                                        |                                                                         |                                       |                       |        |         |        |        |         |        |
|----------------------------------------|-------------------------------------------------------------------------|---------------------------------------|-----------------------|--------|---------|--------|--------|---------|--------|
| (in thousands)                         | For the year ended December 31, 2009                                    |
|                                   | Fixed income securities, available-for-sale, and short-term investments | Equity securities, available-for-sale | Other invested assets | Total  |
| Gross realized gains                   | $                                                                       | 4,351                                 |                  | 402    |    | 247    |   | 5,000   |   |
| Gross realized losses                  | (209                                                                    | )                                     | (149                  | )      | — |   | (358   | )       |
| Credit related impairment losses       | (2,077                                                                  | )                                     | —               |   | — |   | (2,077 | )       |
| Net realized investment gains (losses) | $                                                                       | 2,065                                 |                  | 253    |    | 247    |   | 2,565   |   |
|                                   |                                                                    |                                  |                  |   |
| Proceeds from sales or maturities      | $                                                                       | 182,691                               |                  | 3,176  |    | 192    |   | 186,059 |   |

----

|                                        |                                                                         |                                       |                       |         |        |         |         |         |        |
|----------------------------------------|-------------------------------------------------------------------------|---------------------------------------|-----------------------|---------|--------|---------|---------|---------|--------|
| (in thousands)                         | For the year ended December 31, 2008                                    |
|                                   | Fixed income securities, available-for-sale, and short-term investments | Equity securities, available-for-sale | Other invested assets | Total   |
| Gross realized gains                   | $                                                                       | 2,298                                 |                  | 132     |   | — |    | 2,430   |   |
| Gross realized losses                  | (2,147                                                                  | )                                     | —               |    | (327   | )       | (2,474  | )       |
| Credit related impairment losses       | (6,302                                                                  | )                                     | (6,764                | )       | (442   | )       | (13,508 | )       |
| Net realized investment gains (losses) | $                                                                       | (6,151                                | )                     | (6,632  | )      | (769    | )       | (13,552 | )      |
|                                   |                                                                    |                                  |                  |    |
| Proceeds from sales or maturities      | $                                                                       | 181,626                               |                  | — |   | 6       |    | 181,632 |   |

|                                                                                                                                                     |                                 |         |         |         |         |         |        |
|-----------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------|---------|---------|---------|---------|---------|--------|
| (in thousands)                                                                                                                                      | For the year ended December 31, |
|                                                                                                                                                | 2010                            | 2009    | 2008    |
| Balance beginning of period                                                                                                                         | $                               | — |    | — |    | — |   |
| Additional credit losses recognized during the period, related to securities for which:                                                             |                            |    |    |
| No OTTI has been previously recognized                                                                                                              | 565                             |    | — |    | — |    |
| OTTI has been previously recognized                                                                                                                 | —                         |    | — |    | — |    |
| Reductions due to:                                                                                                                                  |                            |    |    |
| Securities sold during the period (realized)                                                                                                        | —                         |    | — |    | — |    |
| Securities which will be sold in coming periods                                                                                                     | —                         |    | — |    | — |    |
| Securities for which it is more likely than not that the security will be required to be sold prior to anticipated recovery of amortized cost basis | —                         |    | — |    | — |    |
| Accretion recognized during the period related to cash flows that are expected to exceed the amortized cost basis of the security                   | —                         |    | — |    | — |    |
| Balance end of period                                                                                                                               | $                               | 565     |    | — |    | — |   |

|                                                                         |                                 |        |        |        |        |        |        |
|-------------------------------------------------------------------------|---------------------------------|--------|--------|--------|--------|--------|--------|
| (in thousands)                                                          | For the year ended December 31, |
|                                                                    | 2010                            | 2009   | 2008   |
| Fixed income securities, available-for-sale, and short-term investments | $                               | 26,653 |   | 28,898 |   | 30,249 |   |
| Equity securities, available-for-sale                                   | 363                             |   | 429    |   | 576    |   |
| Other invested assets                                                   | 482                             |   | 685    |   | 638    |   |
| Cash and cash equivalents                                               | 40                              |   | 124    |   | 1,165  |   |
| Total investment income                                                 | 27,538                          |   | 30,136 |   | 32,628 |   |
| Less: Investment expense                                                | (2,597                          | )      | (2,387 | )      | (2,333 | )      |
| Net investment income                                                   | $                               | 24,941 |   | 27,749 |   | 30,295 |   |

----

|                                                                               |                         |                         |                |            |         |         |         |         |        |
|-------------------------------------------------------------------------------|-------------------------|-------------------------|----------------|------------|---------|---------|---------|---------|--------|
| (in thousands)                                                                | As of December 31, 2010 | As of December 31, 2009 |
|                                                                          | Amortized Cost          | Fair Value              | Amortized Cost | Fair Value |
| Due in one year or less                                                       | $                       | 62,186                  |           | 63,039     |    | 74,101  |    | 75,111  |   |
| Due after one year through five years                                         | 183,814                 |                    | 190,597        |       | 222,513 |    | 231,797 |    |
| Due after five years through ten years                                        | 159,988                 |                    | 168,520        |       | 144,229 |    | 149,612 |    |
| Due after ten years                                                           | 48,109                  |                    | 49,708         |       | 37,624  |    | 39,053  |    |
|                                                                          | 454,097                 |                    | 471,864        |       | 478,467 |    | 495,573 |    |
| Mortgage-backed and asset-backed securities                                   | 150,111                 |                    | 155,373        |       | 170,347 |    | 170,070 |    |
| Total fixed income securities, available-for-sale, and short-term investments | $                       | 604,208                 |           | 627,237    |    | 648,814 |    | 665,643 |   |

|                                                                |         |        |         |        |        |
|----------------------------------------------------------------|---------|--------|---------|--------|--------|
| (in thousands)                                                 |    |   |
|                                                           | 2010    | 2009   |
| Goodwill, January 1,                                           | $       | 21,039 |    | 10,833 |   |
| Additions: Goodwill related to the acquisition of Advocate, MD | — |   | 10,206  |   |
| Reductions: Purchase price adjustments                         | (62     | )      | — |   |
| Reductions: Impairment losses                                  | — |   | — |   |
| Goodwill, December 31                                          | $       | 20,977 |    | 21,039 |   |

|                           |                               |                        |                          |                      |                     |         |         |        |        |        |
|---------------------------|-------------------------------|------------------------|--------------------------|----------------------|---------------------|---------|---------|--------|--------|--------|
| (in thousands)            |                          | December 31, 2010 |
|                      | Projected Useful Life (years) | Gross Carrying Amount  | Accumulated Amortization | Amortization Expense | Net Carrying Amount |
| State licenses            | Indefinite                    | $                      | 250                      |                 | —             |    | — |   | 250    |   |
| Trade name - Advocate, MD | Indefinite                    | 530                    |                     | —              |                | — |    | 530    |   |
| Non-competes              | 4.7                           | 2,371                  |                     | 566                  |                | 506     |    | 1,805  |   |
| Customer relationships    | 10                            | 4,128                  |                     | 470                  |                | 412     |    | 3,658  |   |
|                      |                          | $                      | 7,279                    |                 | 1,036               |    | 918     |   | 6,243  |   |

----

|                           |                               |                        |                          |                      |                     |         |         |        |        |        |
|---------------------------|-------------------------------|------------------------|--------------------------|----------------------|---------------------|---------|---------|--------|--------|--------|
| (in thousands)            |                          | December 31, 2009 |
|                      | Projected Useful Life (years) | Gross Carrying Amount  | Accumulated Amortization | Amortization Expense | Net Carrying Amount |
| State licenses            | Indefinite                    | $                      | 250                      |                 | —             |    | — |   | 250    |   |
| Trade name - Advocate, MD | Indefinite                    | 530                    |                     | —              |                | — |    | 530    |   |
| Non-competes              | 4.7                           | 2,371                  |                     | 60                   |                | 60      |    | 2,311  |   |
| Customer relationships    | 10                            | 4,128                  |                     | 58                   |                | 58      |    | 4,070  |   |
|                      |                          | $                      | 7,279                    |                 | 118                 |    | 118     |   | 7,161  |   |

|                |                             |                |        |        |        |        |        |
|----------------|-----------------------------|----------------|--------|--------|--------|--------|--------|
| (in thousands) | Other underwriting expenses | Other expenses | Total  |
| 2011           | $                           | 504            |   | 413    |   | 917    |   |
| 2012           | 504                         |           | 413    |   | 917    |   |
| 2013           | 504                         |           | 413    |   | 917    |   |
| 2014           | 293                         |           | 413    |   | 706    |   |
| 2015           | —                     |           | 413    |   | 413    |   |
| Total          | $                           | 1,805          |   | 2,065  |   | 3,870  |   |

|                                                                                                |        |                                 |         |          |         |          |         |        |
|------------------------------------------------------------------------------------------------|--------|---------------------------------|---------|----------|---------|----------|---------|--------|
| (in thousands)                                                                                 |   | For the year ended December 31, |
|                                                                                           |   | 2010                            | 2009    | 2008     |
| Gross balance, January 1                                                                       |   | $                               | 559,257 |     | 555,848 |     | 585,087 |   |
| Less reinsurance recoverables                                                                  |   | 133,445                         |    | 135,851  |    | 144,335  |    |
| Net balance, January 1                                                                         |   | 425,812                         |    | 419,997  |    | 440,752  |    |
|                                                                                           |   |                            |    |     |
| Reserves acquired from acquisition, net of receivable from reinsurers of $5.0 million (1) |   | —                         |    | 33,821   |    | —  |    |
|                                                                                           |   |                            |    |     |
| Incurred Related To:                                                                           |   |                            |    |     |
| Current year                                                                                   |   | 120,302                         |    | 111,176  |    | 116,721  |    |
| Prior years                                                                                    |   | (22,973                         | )       | (18,991  | )       | (17,000  | )       |
| Total incurred                                                                                 |   | 97,329                          |    | 92,185   |    | 99,721   |    |
|                                                                                           |   |                            |    |     |
| Paid Related To:                                                                               |   |                            |    |     |
| Current Year                                                                                   |   | (13,628                         | )       | (14,262  | )       | (10,922  | )       |
| Prior Years                                                                                    |   | (123,190                        | )       | (105,929 | )       | (109,554 | )       |
| Total paid                                                                                     |   | (136,818                        | )       | (120,191 | )       | (120,476 | )       |
|                                                                                           |   |                            |    |     |
| Net balance, December 31                                                                       |   | 386,323                         |    | 425,812  |    | 419,997  |    |
| Plus reinsurance recoverables                                                                  |   | 134,223                         |    | 133,445  |    | 135,851  |    |
| Gross balance, December 31                                                                     |   | $                               | 520,546 |     | 559,257 |     | 555,848 |   |

----

|                             |                                                                                                                                                            |
|-----------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (1)     | In November 2009, we acquired all of the issued and outstanding stock of Advocate, MD, which then became a wholly owned subsidiary of First Professionals. |

|                               |                                 |         |         |         |         |         |         |         |         |         |         |         |        |
|-------------------------------|---------------------------------|---------|---------|---------|---------|---------|---------|---------|---------|---------|---------|---------|--------|
| (in thousands)                | For the year ended December 31, |
|                          | 2010                            | 2009    | 2008    |
|                          | Written                         | Earned  | Written | Earned  | Written | Earned  |
| Direct and assumed            |                            |    |    |    |    |    |
| FPIC pre-acquisition business | $                               | 161,180 |    | 166,135 |    | 167,958 |    | 177,315 |    | 185,830 |    | 196,059 |   |
| Advocate, MD acquisition      | 30,108                          |    | 28,429  |    | 2,493   |    | 3,614   |    | — |    | — |    |
| Consolidated                  | 191,288                         |    | 194,564 |    | 170,451 |    | 180,929 |    | 185,830 |    | 196,059 |    |
|                          |                            |    |    |    |    |    |
| Ceded                         |                            |    |    |    |    |    |
| FPIC pre-acquisition business | (23,502                         | )       | (23,149 | )       | (23,817 | )       | (23,994 | )       | (23,548 | )       | (23,229 | )       |
| Advocate, MD acquisition      | (3,913                          | )       | (3,330  | )       | (285    | )       | (461    | )       | — |    | — |    |
| Consolidated                  | (27,415                         | )       | (26,479 | )       | (24,102 | )       | (24,455 | )       | (23,548 | )       | (23,229 | )       |
|                          |                            |    |    |    |    |    |
| Net                           | $                               | 163,873 |    | 168,085 |    | 146,349 |    | 156,474 |    | 162,282 |    | 172,830 |   |

|                               |                                 |         |         |         |         |         |        |
|-------------------------------|---------------------------------|---------|---------|---------|---------|---------|--------|
| (in thousands)                | For the year ended December 31, |
|                          | 2010                            | 2009    | 2008    |
| Losses and LAE                |                            |    |    |
| FPIC pre-acquisition business | $                               | 102,417 |    | 108,704 |    | 123,319 |   |
| Advocate, MD acquisition      | 13,476                          |    | 1,873   |    | — |    |
| Consolidated                  | 115,893                         |    | 110,577 |    | 123,319 |    |
|                          |                            |    |    |
| Reinsurance recoveries        |                            |    |    |
| FPIC pre-acquisition business | (17,938                         | )       | (18,572 | )       | (23,598 | )       |
| Advocate, MD acquisition      | (626                            | )       | 180     |    | — |    |
| Consolidated                  | (18,564                         | )       | (18,392 | )       | (23,598 | )       |
|                          |                            |    |    |
| Net losses and LAE            | $                               | 97,329  |    | 92,185  |    | 99,721  |   |

----

|                                                                         |                                                   |
|-------------------------------------------------------------------------|---------------------------------------------------|
|                                                                    |  Treaty years 2007 through 2011              |
| Coverage A:                                                             | Losses* of $4.5 million in excess of $0.5 million |
| Coverage B (applies to policies with limits in excess of $1.0 million): | Losses* of $4.0 million in excess of $1.0 million |

|                         |                                                       |
|-------------------------|-------------------------------------------------------|
|                    | Effective January 1, 2011 on an awards made basis     |
| First Excess Coverage:  | 90% of losses of $10 million in excess of $10 million |
| Second Excess Coverage: | 90% of losses of $10 million in excess of $20 million |

|                                         |                                          |                                                               |                                                               |         |         |        |
|-----------------------------------------|------------------------------------------|---------------------------------------------------------------|---------------------------------------------------------------|---------|---------|--------|
| Reinsurer                               | A.M. Best Rating as of December 31, 2010 | Net Amount Recoverable as of December 31, 2010 (in thousands) | Net Amount Recoverable as of December 31, 2009 (in thousands) |
| Hannover Rueckversicherungs             | A                                        | $                                                             | 25,356                                                        |    | 25,942  |   |
| Physicians' Reciprocal Insurers         | Not Rated*                               | 25,135                                                        |                                                          | 28,367  |    |
| Lloyd's Syndicates                      | A                                        | 20,673                                                        |                                                          | 17,136  |    |
| Transatlantic Reinsurance Company       | A                                        | 17,835                                                        |                                                          | 17,168  |    |
| Berkley Insurance Company               | A+                                       | 13,640                                                        |                                                          | 11,792  |    |
| Partner Reinsurance Company of the U.S. | A+                                       | 10,071                                                        |                                                          | 9,970   |    |
| ACE Tempest Re                          | A+                                       | 6,691                                                         |                                                          | 5,739   |    |
| Magna Carta Insurance Ltd.              | Not Rated*                               | 5,690                                                         |                                                          | — |    |
| Other reinsurers                        | *                                        | 23,719                                                        |                                                          | 30,085  |    |
| Total                                   |                                     | $                                                             | 148,810                                                       |    | 146,199 |   |

----

|                       |                         |        |                            |                |        |        |        |        |        |        |
|-----------------------|-------------------------|--------|----------------------------|----------------|--------|--------|--------|--------|--------|--------|
|                  |                    |   |                       | (in thousands) |
|                  | Rate as of December 31, |   | Balance as of December 31, |
| Due Date              | 2010                    | 2009   |                       | 2010           | 2009   |
| May 15, 2033     | 4.39                    | %      | 4.37                       | %              |   | $      | 15,464 |   | 15,464 |   |
| May 23, 2033     | 4.50                    | %      | 4.46                       | %              |   | 5,155  |   | 5,155  |   |
| October 29, 2033 | 4.14                    | %      | 4.13                       | %              |   | 15,464 |   | 15,464 |   |
|                  |                    |   |                       | $              | 36,083 |   | 36,083 |   |

|                      |                         |        |                            |                |        |        |        |        |        |        |
|----------------------|-------------------------|--------|----------------------------|----------------|--------|--------|--------|--------|--------|--------|
|                 |                    |   |                       | (in thousands) |
|                 | Rate as of December 31, |   | Balance as of December 31, |
| Due Date             | 2010                    | 2009   |                       | 2010           | 2009   |
| May 23, 2033    | 4.50                    | %      | 4.46                       | %              |   | $      | 10,000 |   | 10,000 |   |
|                 |                    |   |                       |           |   |
| Total long-term debt |                    |   |                       | $              | 46,083 |   | 46,083 |   |

----

|                                |               |                 |               |            |          |     |   |     |   |     |   |
|--------------------------------|---------------|-----------------|---------------|------------|----------|-----|---|-----|---|-----|---|
| Notional Amount (in thousands) | Maturity Date | LIBOR Floor (1) | LIBOR Cap (1) | Floor Rate | Cap Rate |
| $                              | 15,000        |            | 5/15/2008     | 1.2        | %        | 4.4 | % | 5.3 | % | 8.5 | % |
| $                              | 5,000         |            | 5/23/2008     | 1.2        | %        | 4.4 | % | 5.4 | % | 8.6 | % |
| $                              | 10,000        |            | 5/23/2008     | 1.2        | %        | 4.4 | % | 5.4 | % | 8.6 | % |
| $                              | 15,000        |            | 10/29/2008    | 1.0        | %        | 4.7 | % | 4.9 | % | 8.5 | % |

|                             |                                 |
|-----------------------------|---------------------------------|
| (1)     | Based on the three month LIBOR. |

----

|                              |                                           |            |                       |          |                             |            |                |               |        |        |      |            |            |            |           |
|------------------------------|-------------------------------------------|------------|-----------------------|----------|-----------------------------|------------|----------------|---------------|--------|--------|------|------------|------------|------------|-----------|
| (in thousands)               | December 31, 2010                    |
|                         | Balance sheet location: Other liabilities |
| Instrument                   | Notional Amount                           | Fair Value | Receive Rate (1) | Pay Rate | Effective Pay Rate (2) | Trade Date | Effective Date | Maturity Date |
|  Interest Rate Swap - A | $                                         | 5,000      |                  | $        | (377                        | )          | 0.30           | %             | 3.94   | %      | 8.14 | %          | 5/23/2008  | 5/23/2008  | 5/23/2013 |
|  Interest Rate Swap - B | $                                         | 15,000     |                  | (1,246   | )                           | 0.29       | %              | 4.04          | %      | 8.14   | %    | 5/23/2008  | 8/15/2008  | 8/15/2013  |
|  Interest Rate Swap - C | $                                         | 15,000     |                  | (1,359   | )                           | 0.29       | %              | 4.12          | %      | 7.97   | %    | 5/23/2008  | 10/29/2008 | 10/29/2013 |
|  Interest Rate Swap - D | $                                         | 10,000     |                  | (237     | )                           | 0.30       | %              | 2.74          | %      | 6.94   | %    | 11/18/2008 | 11/24/2008 | 11/23/2011 |
|                         |                                      | $          | (3,219                | )        |                        |       |           |          |   |   |

|                              |                                           |            |                  |          |                        |            |                |               |        |        |      |            |            |            |           |
|------------------------------|-------------------------------------------|------------|------------------|----------|------------------------|------------|----------------|---------------|--------|--------|------|------------|------------|------------|-----------|
| (in thousands)               | December 31, 2009                    |
|                         | Balance sheet location: Other liabilities |
| Instrument                   | Notional Amount                           | Fair Value | Receive Rate (1) | Pay Rate | Effective Pay Rate (2) | Trade Date | Effective Date | Maturity Date |
|  Interest Rate Swap - A | $                                         | 5,000      |             | $        | (299                   | )          | 0.26           | %             | 3.94   | %      | 8.14 | %          | 5/23/2008  | 5/23/2008  | 5/23/2013 |
|  Interest Rate Swap - B | $                                         | 15,000     |             | (969     | )                      | 0.27       | %              | 4.04          | %      | 8.14   | %    | 5/23/2008  | 8/15/2008  | 8/15/2013  |
|  Interest Rate Swap - C | $                                         | 15,000     |             | (1,041   | )                      | 0.28       | %              | 4.12          | %      | 7.97   | %    | 5/23/2008  | 10/29/2008 | 10/29/2013 |
|  Interest Rate Swap - D | $                                         | 10,000     |             | (292     | )                      | 0.26       | %              | 2.74          | %      | 6.94   | %    | 11/18/2008 | 11/24/2008 | 11/23/2011 |
|                         |                                      | $          | (2,601           | )        |                   |       |           |          |   |   |

|                             |                                 |
|-----------------------------|---------------------------------|
| (1)     | Based on the three month LIBOR. |

|                             |                                                                                                                                                                                                                                    |
|-----------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2)     | Represents the actual effective rate paid on our outstanding debt, which includes spreads ranging from 3.85 percent to 4.20 percent (actual interest rates ranged from 4.14 percent to 4.50 percent as of December 31, 2010). |

----

|                          |                                                                                                 |        |                                                                                                               |        |        |        |        |         |        |         |        |        |        |      |   |
|--------------------------|-------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|---------|--------|---------|--------|--------|--------|------|---|
| (Effective portion)      | Amount of gain (loss) recognized in other comprehensive income on the derivative (in thousands) |   | Amount of gain (loss) reclassified from accumulated other comprehensive income into net income (in thousands) |
|                     | 2010                                                                                            | 2009   | 2008                                                                                                          |   | 2010   | 2009   | 2008   |
| Interest Rate Swap - A   | $                                                                                               | 77     |                                                                                                          | 4      |   | (296   | )      |    | $      | (183    | )      | (153   | )      | (40  | ) |
| Interest Rate Swap - B   | 278                                                                                             |   | 414                                                                                                           |   | (1,359 | )      |   | (563    | )      | (471    | )      | (83    | )      |
| Interest Rate Swap - C   | 318                                                                                             |   | 406                                                                                                           |   | (1,447 | )      |   | (576    | )      | (474    | )      | (16    | )      |
| Interest Rate Swap - D   | (55                                                                                             | )      | 122                                                                                                           |   | (421   | )      |   | (243    | )      | (184    | )      | (6     | )      |
|                     |                                                                                            |   |                                                                                                          |   |   |   |   |
| Interest Rate Collar - A | —                                                                                         |   | —                                                                                                       |   | 25     |   |   | — |   | — |   | 5      |   |
| Interest Rate Collar - B | —                                                                                         |   | —                                                                                                       |   | 28     |   |   | — |   | — |   | 9      |   |
| Interest Rate Collar - C | —                                                                                         |   | —                                                                                                       |   | 178    |   |   | — |   | — |   | 4      |   |
| Interest Rate Collar - D | —                                                                                         |   | —                                                                                                       |   | 13     |   |   | — |   | — |   | 10     |   |
| Total                    | $                                                                                               | 618    |                                                                                                          | 946    |   | (3,279 | )      |    | $      | (1,565  | )      | (1,282 | )      | (117 | ) |

|                               |                                  |                                                  |                                    |                                                    |        |        |        |        |        |
|-------------------------------|----------------------------------|--------------------------------------------------|------------------------------------|----------------------------------------------------|--------|--------|--------|--------|--------|
|                          | Basic earnings per common share: | Basic weighted-average common shares outstanding | Diluted earnings per common share: | Diluted weighted-average common shares outstanding |
| Revised, December 31, 2009    | $                                | 3.15                                             |                               | 10,801                                             |   | 3.09   |   | 11,026 |   |
| Historical, December 31, 2009 | 4.72                             |                                             | 7,201                              |                                               | 4.63   |   | 7,351  |   |
| Increase (Decrease)           | $                                | (1.57                                            | )                                  | 3,600                                              |   | (1.54  | )      | 3,675  |   |
|                          |                             |                                             |                               |                                               |
| Revised, December 31, 2008    | $                                | 2.53                                             |                               | 12,674                                             |   | 2.46   |   | 13,042 |   |
| Historical, December 31, 2008 | 3.80                             |                                             | 8,449                              |                                               | 3.69   |   | 8,695  |   |
| Increase (Decrease)           | $                                | (1.27                                            | )                                  | 4,225                                              |   | (1.23  | )      | 4,347  |   |

|                                                  |                                 |        |        |        |         |        |        |
|--------------------------------------------------|---------------------------------|--------|--------|--------|---------|--------|--------|
| (in thousands, except earnings per common share) | For the year ended December 31, |
|                                             | 2010                            | 2009   | 2008   |
| Net Income:                                      |                            |   |   |
| Income from continuing operations                | $                               | 29,596 |   | 33,608 |    | 32,100 |   |
| Discontinued operations                          | —                         |   | 411    |   | — |   |
| Net income                                       | $                               | 29,596 |   | 34,019 |    | 32,100 |   |
|                                             |                            |   |   |
| Basic Earnings per Common Share:                 |                            |   |   |
| Income from continuing operations                | $                               | 3.10   |   | 3.11   |    | 2.53   |   |
| Discontinued operations                          | —                         |   | 0.04   |   | — |   |
| Net income                                       | $                               | 3.10   |   | 3.15   |    | 2.53   |   |
|                                             |                            |   |   |
| Diluted Earnings per Common Share:               |                            |   |   |
| Income from continuing operations                | $                               | 3.03   |   | 3.05   |    | 2.46   |   |
| Discontinued operations                          | —                         |   | 0.04   |   | — |   |
| Net income                                       | $                               | 3.03   |   | 3.09   |    | 2.46   |   |
|                                             |                            |   |   |
| Basic weighted-average shares outstanding        | 9,537                           |   | 10,801 |   | 12,674  |   |
| Common stock equivalents (1)                     | 224                             |   | 225    |   | 368     |   |
| Diluted weighted-average shares outstanding      | 9,761                           |   | 11,026 |   | 13,042  |   |

----

|                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|-----------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (1)     | Outstanding stock options totaling 145,908 and 35,359 options for the years ended December 31, 2009 and 2008, respectively, were excluded from the calculation of diluted earnings per common share because the sum of the hypothetical amount of future proceeds from the exercise price, unrecorded compensation, and tax benefits to be credited to additional paid-in capital for the grants of such stock options were higher than the average price of the common shares, and therefore were anti-dilutive. |

|                             |                                 |        |        |        |        |        |        |
|-----------------------------|---------------------------------|--------|--------|--------|--------|--------|--------|
| (in thousands)              | For the year ended December 31, |
|                        | 2010                            | 2009   | 2008   |
| Current expense:            |                            |   |   |
| Federal                     | $                               | 11,274 |   | 13,086 |   | 14,207 |   |
| State                       | 1,795                           |   | 2,085  |   | 2,510  |   |
| Total                       | 13,069                          |   | 15,171 |   | 16,717 |   |
|                        |                            |   |   |
| Deferred (benefit) expense: |                            |   |   |
| Federal                     | 2,349                           |   | 295    |   | (487   | )      |
| State                       | 152                             |   | 79     |   | (277   | )      |
| Total                       | 2,501                           |   | 374    |   | (764   | )      |
| Total income tax expense    | $                               | 15,570 |   | 15,545 |   | 15,953 |   |

|                                            |                                 |        |         |        |         |        |        |
|--------------------------------------------|---------------------------------|--------|---------|--------|---------|--------|--------|
| (in thousands)                             | For the year ended December 31, |
|                                       | 2010                            | 2009   | 2008    |
| Computed "expected" tax expense at 35%     | $                               | 15,808 |    | 17,204 |    | 16,819 |   |
| Tax-exempt interest                        | (2,230                          | )      | (2,668  | )      | (3,239  | )      |
| State income taxes, net of federal benefit | 1,265                           |   | 1,469   |   | 1,388   |   |
| Contingent consideration adjustment  (1)   | 842                             |   | — |   | — |   |
| Valuation allowance                        | —                         |   | (675    | )      | 675     |   |
| Other, net                                 | (115                            | )      | 215     |   | 310     |   |
| Actual income tax expense                  | $                               | 15,570 |    | 15,545 |    | 15,953 |   |

|                             |                                                                                                                                                                                                                          |
|-----------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (1)     | The effective tax rate for 2010 reflects the impact of the adjustment to the estimated fair value of contingent consideration associated with the acquisition of Advocate, MD, which is not deductible for income taxes. |

----

|                                              |                    |        |        |        |        |
|----------------------------------------------|--------------------|--------|--------|--------|--------|
| (in thousands)                               | As of December 31, |
|                                         | 2010               | 2009   |
| Gross deferred tax assets arising from:      |               |   |
| Loss reserve discounting                     | $                  | 19,328 |   | 21,378 |   |
| Unearned premiums                            | 6,780              |   | 7,090  |   |
| Other-than-temporary impairments             | 3,554              |   | 4,132  |   |
| Benefit plans                                | 3,815              |   | 3,224  |   |
| Share-based compensation                     | 1,984              |   | 2,134  |   |
| Other                                        | 1,505              |   | 1,201  |   |
| Total deferred tax assets                    | $                  | 36,966 |   | 39,159 |   |
|                                         |               |   |
| Gross deferred tax liabilities arising from: |               |   |
| Unrealized gains on securities               | $                  | 10,196 |   | 7,248  |   |
| Deferred policy acquisition costs            | 3,466              |   | 3,765  |   |
| Goodwill and intangible assets               | 1,512              |   | 1,825  |   |
| Total deferred tax liabilities               | 15,174             |   | 12,838 |   |
| Net deferred tax asset                       | $                  | 21,792 |   | 26,321 |   |

|                                                              |         |         |         |         |         |        |        |
|--------------------------------------------------------------|---------|---------|---------|---------|---------|--------|--------|
| (in thousands)                                               |    |    |    |
|                                                         | 2010    | 2009    | 2008    |
| Balance January 1                                            | $       | — |    | 448     |    | 625    |   |
| Additions based on tax positions related to the current year | — |    | — |    | — |   |
| Additions based on tax positions of prior years              | — |    | — |    | 17      |   |
| Reductions for tax positions of prior years                  | — |    | (448    | )       | (194    | )      |
| Settlements                                                  | — |    | — |    | — |   |
| Balance at December 31                                       | $       | — |    | — |    | 448    |   |

----

|                                                                             |                                      |                        |                   |        |         |        |        |
|-----------------------------------------------------------------------------|--------------------------------------|------------------------|-------------------|--------|---------|--------|--------|
| (in thousands)                                                              | For the year ended December 31, 2010 |
|                                                                        | Before-Tax Amount                    | Tax (Expense)  Benefit | Net-of-Tax Amount |
| Derivative financial instruments:                                           |                                 |                   |              |
| Unrealized holding gains (losses) arising during period                     | $                                    | (618                   | )                 | 238    |    | (380   | )      |
| Less: reclassification adjustment for gains (losses) realized in net income | —                              |                   | —           |   | — |   |
| Net unrealized gains (losses) on derivative financial instruments           | (618                                 | )                      | 238               |   | (380    | )      |
|                                                                        |                                 |                   |              |
| Investments:                                                                |                                 |                   |              |
| Unrealized holding gains (losses) arising during period                     | 11,495                               |                   | (4,392            | )      | 7,103   |   |
| Less: reclassification adjustment for gains (losses) realized in net income | 4,148                                |                   | (1,600            | )      | 2,548   |   |
| Net unrealized gains (losses) on investments                                | 7,347                                |                   | (2,792            | )      | 4,555   |   |
|                                                                        |                                 |                   |              |
| Pension plan obligations:                                                   |                                 |                   |              |
| Unrealized holding gains (losses) arising during period                     | (814                                 | )                      | 314               |   | (500    | )      |
| Less: reclassification adjustment for gains (losses) realized in net income | —                              |                   | —           |   | — |   |
| Net unrealized gains (losses) on pension plan obligations                   | (814                                 | )                      | 314               |   | (500    | )      |
| Other comprehensive income (loss)                                           | $                                    | 5,915                  |              | (2,240 | )       | 3,675  |   |

|                                                                             |                                      |                        |                   |         |         |        |        |
|-----------------------------------------------------------------------------|--------------------------------------|------------------------|-------------------|---------|---------|--------|--------|
| (in thousands)                                                              | For the year ended December 31, 2009 |
|                                                                        | Before-Tax Amount                    | Tax (Expense)  Benefit | Net-of-Tax Amount |
| Derivative financial instruments:                                           |                                 |                   |              |
| Unrealized holding gains (losses) arising during period                     | $                                    | 946                    |              | (365    | )       | 581    |   |
| Less: reclassification adjustment for gains (losses) realized in net income | —                              |                   | —           |    | — |   |
| Net unrealized gains (losses) on derivative financial instruments           | 946                                  |                   | (365              | )       | 581     |   |
|                                                                        |                                 |                   |              |
| Investments:                                                                |                                 |                   |              |
| Unrealized holding gains (losses) arising during period                     | 33,113                               |                   | (12,640           | )       | 20,473  |   |
| Less: reclassification adjustment for gains (losses) realized in net income | 2,565                                |                   | (990              | )       | 1,575   |   |
| Net unrealized gains (losses) on investments                                | 30,548                               |                   | (11,650           | )       | 18,898  |   |
|                                                                        |                                 |                   |              |
| Pension plan obligations:                                                   |                                 |                   |              |
| Unrealized holding gains (losses) arising during period                     | 2,548                                |                   | (983              | )       | 1,565   |   |
| Less: reclassification adjustment for gains (losses) realized in net income | —                              |                   | —           |    | — |   |
| Net unrealized gains (losses) on pension plan obligations                   | 2,548                                |                   | (983              | )       | 1,565   |   |
| Other comprehensive income (loss)                                           | $                                    | 34,042                 |              | (12,998 | )       | 21,044 |   |

----

|                                                                             |                                      |                        |                   |        |         |         |   |
|-----------------------------------------------------------------------------|--------------------------------------|------------------------|-------------------|--------|---------|---------|---|
| (in thousands)                                                              | For the year ended December 31, 2008 |
|                                                                        | Before-Tax Amount                    | Tax (Expense)  Benefit | Net-of-Tax Amount |
| Derivative financial instruments:                                           |                                 |                   |              |
| Unrealized holding gains (losses) arising during period                     | $                                    | (3,279                 | )                 | 1,265  |    | (2,014  | ) |
| Less: reclassification adjustment for gains (losses) realized in net income | —                              |                   | —           |   | — |    |
| Net unrealized gains (losses) on derivative financial instruments           | (3,279                               | )                      | 1,265             |   | (2,014  | )       |
|                                                                        |                                 |                   |              |
| Investments:                                                                |                                 |                   |              |
| Unrealized holding gains (losses) arising during period                     | (25,836                              | )                      | 9,922             |   | (15,914 | )       |
| Less: reclassification adjustment for gains (losses) realized in net income | (13,552                              | )                      | 5,203             |   | (8,349  | )       |
| Net unrealized gains (losses) on investments                                | (12,284                              | )                      | 4,719             |   | (7,565  | )       |
|                                                                        |                                 |                   |              |
| Pension plan obligations:                                                   |                                 |                   |              |
| Unrealized holding gains (losses) arising during period                     | (3,041                               | )                      | 1,173             |   | (1,868  | )       |
| Less: reclassification adjustment for gains (losses) realized in net income | —                              |                   | —           |   | — |    |
| Net unrealized gains (losses) on pension plan obligations                   | (3,041                               | )                      | 1,173             |   | (1,868  | )       |
| Other comprehensive income (loss)                                           | $                                    | (18,604                | )                 | 7,157  |    | (11,447 | ) |

|                                                                                         |                                 |        |        |        |         |         |   |
|-----------------------------------------------------------------------------------------|---------------------------------|--------|--------|--------|---------|---------|---|
| (in thousands)                                                                          | For the year ended December 31, |
|                                                                                    | 2010                            | 2009   | 2008   |
| Unrealized gains (losses) on investments                                                | $                               | 15,732 |   | 11,177 |    | (7,721  | ) |
| Unrealized gains (losses) on derivative financial instruments                           | (1,978                          | )      | (1,598 | )      | (2,179  | )       |
| Unrealized gains (losses) on pension plan obligations                                   | (1,424                          | )      | 303    |   | (1,262  | )       |
| Subtotal                                                                                | 12,330                          |   | 9,882  |   | (11,162 | )       |
| Cumulative adjustment to apply measurement date provisions on pension plans, net of tax | —                         |   | (1,227 | )      | (1,227  | )       |
| Accumulated other comprehensive income (loss), net                                      | $                               | 12,330 |   | 8,655  |    | (12,389 | ) |
|                                                                                    |                            |   |   |

|                                                                                         |                                 |        |         |        |         |         |   |
|-----------------------------------------------------------------------------------------|---------------------------------|--------|---------|--------|---------|---------|---|
| (in thousands)                                                                          | For the year ended December 31, |
|                                                                                    | 2010                            | 2009   | 2008    |
| Unrealized gains (losses) on investments                                                | $                               | 4,555  |    | 18,898 |    | (7,565  | ) |
| Unrealized gains (losses) on derivative financial instruments                           | (380                            | )      | 581     |   | (2,014  | )       |
| Unrealized gains (losses) on pension plan obligations                                   | (500                            | )      | 1,565   |   | (1,868  | )       |
| Subtotal                                                                                | 3,675                           |   | 21,044  |   | (11,447 | )       |
| Cumulative adjustment to apply measurement date provisions on pension plans, net of tax | —                         |   | — |   | (58     | )       |
| Comprehensive income (loss), net of taxes                                               | $                               | 3,675  |    | 21,044 |    | (11,505 | ) |

----

|                                     |           |        |           |        |
|-------------------------------------|-----------|--------|-----------|--------|
|                                | 2010      | 2009   |
| The Omnibus Plan                    | 711,099   |   | 844,208   |   |
| The Director Plan                   | 376,202   |   | 389,702   |   |
| The ESPP                            | 98,950    |   | 104,559   |   |
| Shares authorized for future awards | 1,186,251 |   | 1,338,469 |   |

----

|                                                                                                                               |        |        |        |        |        |        |        |
|-------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|
| (in thousands)                                                                                                                | 2010   | 2009   | 2008   |
| Other underwriting expenses                                                                                                   | $      | 2,832  |   | 3,362  |   | 3,022  |   |
| Income tax benefit                                                                                                            | (1,090 | )      | (1,294 | )      | (1,029 | )      |
| Net share−based compensation                                                                                            | $      | 1,742  |   | 2,068  |   | 1,993  |   |
|                                                                                                                          |   |   |   |
| Actual tax benefit realized for tax deductions from stock option exercises and the vesting of restricted stock (in thousands) | $      | 1,781  |   | 1,620  |   | 2,242  |   |
|                                                                                                                          |   |   |   |
| Total unrecognized compensation cost related to non-vested share-based compensation arrangements (in thousands)               | $      | 3,234  |   | 1,653  |   | 2,754  |   |
|                                                                                                                          |   |   |   |
| Recognition over a weighted-average period (in years)                                                                         | 1.0    |   | 0.8    |   | 0.9    |   |
|                                                                                                                          |   |   |   |
| Cash received from option and stock exercises under all share-based arrangements (in thousands)                               | $      | 1,207  |   | 2,803  |   | 6,645  |   |

|                                     |         |        |         |        |         |        |
|-------------------------------------|---------|--------|---------|--------|---------|--------|
| Assumptions related to ESPP awards: | 2010    | 2009   | 2008    |
| Expected volatility                 | 33.06   | %      | 40.04   | %      | 36.02   | %      |
| Expected dividends                  | — |   | — |   | — |   |
| Expected term (in years)       | 1.0     |   | 1.0     |   | 1.0     |   |
| Risk-free rate                      | 0.32    | %      | 0.39    | %      | 3.04    | %      |

|                                  |         |                                 |                                                      |                                                |        |        |        |       |        |
|----------------------------------|---------|---------------------------------|------------------------------------------------------|------------------------------------------------|--------|--------|--------|-------|--------|
|                             | Shares  | Weighted-Average Exercise Price | Weighted-Average Remaining Contractual Term in Years | Total Aggregate Intrinsic Value (in thousands) |
| Outstanding, January 1, 2010     | 507,127 |                            | $                                                    | 17.21                                          |   |   |   |
| Granted                          | — |                            | —                                              |                                           |   |   |
| Exercised                        | (96,750 | )                               | 11.22                                                |                                           |   |   |
| Forfeited                        | — |                            | —                                              |                                           |   |   |
| Outstanding, December 31, 2010   | 410,377 |                            | $                                                    | 18.62                                          |   | 3.9    | $      | 7,528 |   |
|                             |    |                            |                                                 |                                           |
| Exercisable at December 31, 2010 | 410,377 |                            | $                                                    | 18.62                                          |   | 3.9    | $      | 7,528 |   |

|                                                                 |         |         |         |       |        |       |        |
|-----------------------------------------------------------------|---------|---------|---------|-------|--------|-------|--------|
|                                                            | 2010    | 2009    | 2008    |
| Weighted-average grant date fair value of stock options granted |  * |  * |  * |
|                                                            |    |    |    |
| Total intrinsic value of options exercised (in thousands)       | $       | 1,678   |    | 4,234 |   | 9,531 |   |
|                                                            |    |    |    |
| Total fair value of shares vested (in thousands)           | $       | 566     |    | 3,577 |   | 2,632 |   |

----

|                           |                         |                             |                                 |                                             |        |                  |                                 |        |         |         |        |        |       |        |
|---------------------------|-------------------------|-----------------------------|---------------------------------|---------------------------------------------|--------|------------------|---------------------------------|--------|---------|---------|--------|--------|-------|--------|
|                      | Options Outstanding     |                        | Options Exercisable             |
| Range of Prices per Share | Vested Number of Shares | Non-vested Number of Shares | Weighted-Average Exercise Price | Weighted-Average Remaining Contractual Life |   | Number of Shares | Weighted-Average Exercise Price |
| $   0.00 - 10.99          | 101,250                 |                        | —                         |                                        | $      | 8.45             |                            | 1.4    |    | 101,250 |   | $      | 8.45  |   |
| $ 11.00 - 23.99           | 187,075                 |                        | —                         |                                        | 19.14  |             | 3.8                             |   | 187,075 |    | 19.14  |   |
| $ 24.00 - 40.99           | 122,052                 |                        | —                         |                                        | 26.25  |             | 6.0                             |   | 122,052 |    | 26.25  |   |
|                      | 410,377                 |                        | —                         |                                        | $      | 18.62            |                            | 3.9    |    | 410,377 |   | $      | 18.62 |   |

|                                        |          |                                        |                                                      |                                                |        |        |        |   |       |        |
|----------------------------------------|----------|----------------------------------------|------------------------------------------------------|------------------------------------------------|--------|--------|--------|---|-------|--------|
|                                   | Shares   | Weighted-Average Grant Date Fair Value | Weighted-Average Remaining Contractual Term in Years | Total Aggregate Intrinsic Value (in thousands) |
| Non-vested, January 1, 2010            | 208,404  |                                   | $                                                    | 27.15                                          |   |   |   |
| Granted                                | 128,676  |                                   | 31.06                                                |                                           |   |   |
| Vested                                 | (113,805 | )                                      | 27.68                                                |                                           |   |   |
| Forfeited                              | (454     | )                                      | 28.50                                                |                                           |   |   |
| Non-vested, December 31, 2010 (1) | 222,821  |                                   | $                                                    | 29.30                                          |   | 1.1    |   | $ | 8,235 |   |

|                             |                                                                                                                                       |
|-----------------------------|---------------------------------------------------------------------------------------------------------------------------------------|
| (1)     | The total of 222,821 non-vested shares as of December 31, 2010 includes 88,722 shares that are included in common shares outstanding. |

----

|                                  |                                |                      |           |         |         |         |        |        |        |
|----------------------------------|--------------------------------|----------------------|-----------|---------|---------|---------|--------|--------|--------|
| (in thousands)                   | December 31, 2010         |
|                             | Fair Value Measurements Using: | Assets at Fair Value |
|                             | (Level 1)                      | (Level 2)            | (Level 3) |
| Assets                           |                           |                 |      |    |
| Mutual funds - debt securities   | $                              | 4,153                |      | — |    | — |   | 4,153  |   |
| Mutual funds - equity securities | 2,666                          |                 | —   |    | — |    | 2,666  |   |
| Money market funds               | 4                              |                 | —   |    | — |    | 4      |   |
| Total                            | $                              | 6,823                |      | — |    | — |   | 6,823  |   |
|                             |                           |                 |      |    |
| (in thousands)                   | December 31, 2009         |
|                             | Fair Value Measurements Using: | Assets at Fair Value |
|                             | (Level 1)                      | (Level 2)            | (Level 3) |
| Assets                           |                           |                 |      |    |
| Mutual funds - debt securities   | $                              | 2,323                |      | — |    | — |   | 2,323  |   |
| Mutual funds - equity securities | 2,914                          |                 | —   |    | — |    | 2,914  |   |
| Money market funds               | 715                            |                 | —   |    | — |    | 715    |   |
| Total                            | $                              | 5,952                |      | — |    | — |   | 5,952  |   |

----

|                                                |                    |        |        |        |        |
|------------------------------------------------|--------------------|--------|--------|--------|--------|
| (in thousands)                                 |               |   |
|                                           | As of December 31, |
| Change in benefit obligation:                  | 2010               | 2009   |
| Benefit obligation at beginning of year        | $                  | 11,015 |   | 11,166 |   |
| Service cost                                   | 570                |   | 556    |   |
| Interest cost                                  | 659                |   | 592    |   |
| Actuarial (gain) loss                          | 1,134              |   | (1,267 | )      |
| Benefits paid                                  | (50                | )      | (32    | )      |
| Benefit obligation at end of year              | $                  | 13,328 |   | 11,015 |   |
|                                           |               |   |
| Change in fair value of plan assets:           |               |   |
| Fair value of plan assets at beginning of year | $                  | 5,952  |   | 4,545  |   |
| Actual return on plan assets                   | 546                |   | 1,113  |   |
| Employer contributions                         | 375                |   | 326    |   |
| Benefits paid                                  | (50                | )      | (32    | )      |
| Fair value of plan assets at end of year       | $                  | 6,823  |   | 5,952  |   |
|                                           |               |   |
| Funded status at end of year                   | $                  | 6,505  |   | 5,063  |   |

|                                |                    |         |        |         |        |
|--------------------------------|--------------------|---------|--------|---------|--------|
| (in thousands)                 | As of December 31, |
|                           | 2010               | 2009    |
| Projected benefit obligation   | $                  | (13,328 | )      | (11,015 | )      |
| Accumulated benefit obligation | $                  | (11,487 | )      | (9,577  | )      |
| Fair value of plan assets      | $                  | 6,823   |   | 5,952   |   |

|                                         |      |      |      |   |     |   |
|-----------------------------------------|------|------|------|---|-----|---|
|                                    | 2010 | 2009 | 2008 |
| Discount rates                          | 6.0  | %    | 5.9  | % | 6.3 | % |
| Rate of increase in compensation levels | 4.0  | %    | 4.0  | % | 5.8 | % |
| Return on assets                        | 6.8  | %    | 6.8  | % | 6.8 | % |

|                                         |      |      |      |   |     |   |
|-----------------------------------------|------|------|------|---|-----|---|
|                                    | 2010 | 2009 | 2008 |
| Discount rates                          | 5.5  | %    | 6.0  | % | 5.9 | % |
| Rate of increase in compensation levels | 4.0  | %    | 4.0  | % | 6.2 | % |
| Return on assets                        | 6.8  | %    | 6.8  | % | 6.8 | % |

----

|                                           |                                 |        |         |        |        |        |        |
|-------------------------------------------|---------------------------------|--------|---------|--------|--------|--------|--------|
| (in thousands)                            | For the year ended December 31, |
| Net Periodic Benefit Cost:                | 2010                            | 2009   | 2008    |
| Service cost                              | $                               | 570    |    | 556    |   | 1,016  |   |
| Interest cost                             | 659                             |   | 592     |   | 742    |   |
| Expected return on plan assets            | (431                            | )      | (316    | )      | (438   | )      |
| Amortization of prior service cost        | 4                               |   | 4       |   | 47     |   |
| Amortization of net transition obligation | —                         |   | — |   | 7      |   |
| Amortization of net loss                  | 202                             |   | 479     |   | 330    |   |
| Net periodic benefit cost                 | $                               | 1,004  |    | 1,315  |   | 1,704  |   |
|                                      |                            |   |    |

|                                                                                     |                                 |        |         |        |        |        |   |
|-------------------------------------------------------------------------------------|---------------------------------|--------|---------|--------|--------|--------|---|
| (in thousands)                                                                      | For the year ended December 31, |
|                                                                                | 2010                            | 2009   | 2008    |
| Net gain (loss)                                                                     | $                               | (817   | )       | 2,697  |   | (3,585 | ) |
| Amortization of prior service cost                                                  | 4                               |   | 4       |   | 47     |   |
| Amortization of net transition obligation                                           | —                         |   | — |   | 7      |   |
| Curtailment and settlements                                                         | —                         |   | — |   | 490    |   |
| Total recognized in other comprehensive income (loss)                               | (813                            | )      | 2,701   |   | (3,041 | )      |
| Total recognized in net periodic benefit cost and other comprehensive income (loss) | $                               | 190    |    | 4,016  |   | (1,337 | ) |

|                    |                    |       |        |       |        |
|--------------------|--------------------|-------|--------|-------|--------|
| (in thousands)     | As of December 31, |
|               | 2010               | 2009  |
| Net loss           | $                  | 2,311 |   | 1,493 |   |
| Prior service cost | $                  | 11    |   | 15    |   |

|                |        |        |        |
|----------------|--------|--------|--------|
| (in thousands) |   |
|           |   |
| 2011           | $      | 109    |   |
| 2012           | 373    |   |
| 2013           | 417    |   |
| 2014           | 475    |   |
| 2015           | 741    |   |
| 2016-2020      | 4,604  |   |
| Total          | $      | 6,719  |   |

----

|                                          |        |         |        |         |        |
|------------------------------------------|--------|---------|--------|---------|--------|
| (in thousands)                           |   |    |
|                                     |   |    |
| Restricted net assets as of December 31, | 2010   | 2009    |
| First Professionals                      | $      | 207,527 |   | 215,470 |   |
| APAC                                     | $      | 24,536  |   | 19,828  |   |
| Intermed                                 | $      | 48,274  |   | 57,040  |   |
| Interlex                                 | $      | — |   | 13,710  |   |
| Advocate, MD Insurance                   | $      | 39,217  |   | 31,230  |   |

|                                      |         |         |          |         |        |
|--------------------------------------|---------|---------|----------|---------|--------|
| (in thousands)                       |    |    |
|                                 |    |    |
| Statutory surplus as of December 31, | 2010    | 2009    |
| First Professionals                  | $       | 230,586 |     | 239,411 |   |
| APAC                                 | 27,262  |    | 23,189   |    |
| Intermed                             | 53,637  |    | 63,378   |    |
| Interlex                             | — |    | 15,233   |    |
| Advocate, MD Insurance               | 39,217  |    | 31,230   |    |
| Combined statutory surplus           | 350,702 |    | 372,441  |    |
| Less: Intercompany eliminations      | (92,854 | )       | (109,841 | )       |
| Consolidated statutory surplus (1)   | $       | 257,848 |     | 262,600 |   |

|                                                      |         |        |        |        |        |        |        |
|------------------------------------------------------|---------|--------|--------|--------|--------|--------|--------|
| (in thousands)                                       |    |   |   |
|                                                 |    |   |   |
| Statutory net income for the year ended December 31, | 2010    | 2009   | 2008   |
| First Professionals                                  | $       | 20,753 |   | 21,396 |   | 20,798 |   |
| APAC                                                 | 2,163   |   | 3,362  |   | 2,507  |   |
| Intermed                                             | 6,566   |   | 4,889  |   | 6,835  |   |
| Interlex                                             | — |   | 1,397  |   | 1,159  |   |
| Advocate, MD Insurance (2)                           | 7,871   |   | 3,753  |   |   |
| Total statutory net income                           | $       | 37,353 |   | 34,797 |   | 31,299 |   |

|                             |                                                                                                                                                                 |
|-----------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (1)     | Our consolidated insurance subsidiaries' statutory surplus exceeded applicable regulatory and risk-based capital requirements as of December 31, 2010 and 2009. |

|                             |                                                                                                                                                                                                                                                                                                            |
|-----------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2)     | The 2009 statutory net income of Advocate, MD Insurance represents the income for the entire statutory annual period. 2009 Consolidated net income, on a GAAP basis, includes the earnings of Advocate, MD from the acquisition date (see Note 3, Acquisition of Advocate, MD for additional information). |

----

|                                                |                                 |        |         |        |         |        |        |
|------------------------------------------------|---------------------------------|--------|---------|--------|---------|--------|--------|
| (in thousands)                                 | For the year ended December 31, |
|                                           | 2010                            | 2009   | 2008    |
| Beginning balance                              | $                               | 9,918  |    | 9,476  |    | 9,662  |   |
| DPAC acquired from acquisition of Advocate, MD | (330                            | )      | 1,590   |   | — |   |
| Additions                                      | 19,110                          |   | 15,541  |   | 17,857  |   |
| Amortization expense                           | (19,735                         | )      | (16,689 | )      | (18,043 | )      |
| Ending balance                                 | $                               | 8,963  |    | 9,918  |    | 9,476  |   |

|                |        |        |        |
|----------------|--------|--------|--------|
| (in thousands) |   |
|           |   |
| 2011           | $      | 511    |   |
| 2012           | 463    |   |
| 2013           | 231    |   |
| 2014           | 106    |   |
| 2015           | 103    |   |
| Total          | $      | 1,414  |   |

----

|                                                  |                        |         |        |         |        |         |        |         |        |
|--------------------------------------------------|------------------------|---------|--------|---------|--------|---------|--------|---------|--------|
| (in thousands, except earnings per common share) | December 31, 2010 |
|                                             | First                  | Second  | Third  | Fourth  |
| Direct premiums written                          | $                      | 49,117  |   | 43,070  |   | 61,382  |   | 37,573  |   |
| Assumed premiums written                         | $                      | — |   | 176     |   | (30     | )      | — |   |
| Net premiums written                             | $                      | 42,247  |   | 37,613  |   | 52,394  |   | 31,619  |   |
| Net premiums earned                              | $                      | 41,936  |   | 41,843  |   | 42,341  |   | 41,965  |   |
| Net investment income                            | $                      | 6,587   |   | 6,253   |   | 6,184   |   | 5,917   |   |
| Net realized investment gains                    | $                      | 350     |   | 830     |   | 1,625   |   | 1,343   |   |
| Total revenues                                   | $                      | 48,994  |   | 49,092  |   | 50,239  |   | 49,384  |   |
|                                             |                   |    |   |    |
| Income from continuing operations                | $                      | 10,749  |   | 11,021  |   | 13,181  |   | 10,215  |   |
| Discontinued operations                          | $                      | — |   | — |   | — |   | — |   |
| Net income                                       | $                      | 7,215   |   | 7,491   |   | 8,704   |   | 6,186   |   |
|                                             |                   |    |   |    |
| Basic earnings per common share:                 |                   |    |   |    |
| Income from continuing operations                | $                      | 0.72    |   | 0.77    |   | 0.93    |   | 0.68    |   |
| Discontinued operations                          | $                      | — |   | — |   | — |   | — |   |
| Net income                                       | $                      | 0.72    |   | 0.77    |   | 0.93    |   | 0.68    |   |
|                                             |                   |    |   |    |
| Diluted earnings per common share:               |                   |    |   |    |
| Income from continuing operations                | $                      | 0.71    |   | 0.76    |   | 0.91    |   | 0.66    |   |
| Discontinued operations                          | $                      | — |   | — |   | — |   | — |   |
| Net income                                       | $                      | 0.71    |   | 0.76    |   | 0.91    |   | 0.66    |   |

----

|                                                  |                        |         |        |         |        |        |        |         |        |
|--------------------------------------------------|------------------------|---------|--------|---------|--------|--------|--------|---------|--------|
| (in thousands, except earnings per common share) | December 31, 2009 |
|                                             | First                  | Second  | Third  | Fourth  |
| Direct premiums written                          | $                      | 45,604  |   | 36,506  |   | 51,348 |   | 36,935  |   |
| Assumed premiums written                         | $                      | — |   | — |   | 58     |   | — |   |
| Net premiums written                             | $                      | 39,259  |   | 31,375  |   | 44,265 |   | 31,450  |   |
| Net premiums earned                              | $                      | 38,412  |   | 37,668  |   | 39,468 |   | 40,926  |   |
| Net investment income                            | $                      | 7,220   |   | 7,122   |   | 6,702  |   | 6,705   |   |
| Net realized investment (losses) gains           | $                      | (58     | )      | 1,025   |   | 373    |   | 1,225   |   |
| Total revenues                                   | $                      | 45,669  |   | 45,899  |   | 46,736 |   | 48,994  |   |
|                                             |                   |    |   |    |
| Income from continuing operations                | $                      | 8,387   |   | 9,191   |   | 8,467  |   | 7,563   |   |
| Discontinued operations                          | $                      | — |   | — |   | 411    |   | — |   |
| Net income                                       | $                      | 8,387   |   | 9,191   |   | 8,878  |   | 7,563   |   |
|                                             |                   |    |   |    |
| Basic earnings per common share:                 |                   |    |   |    |
| Income from continuing operations                | $                      | 0.73    |   | 0.83    |   | 0.81   |   | 0.74    |   |
| Discontinued operations                          | $                      | — |   | — |   | 0.04   |   | — |   |
| Net income                                       | $                      | 0.73    |   | 0.83    |   | 0.85   |   | 0.74    |   |
|                                             |                   |    |   |    |
| Diluted earnings per common share:               |                   |    |   |    |
| Income from continuing operations                | $                      | 0.71    |   | 0.81    |   | 0.79   |   | 0.73    |   |
| Discontinued operations                          | $                      | — |   | — |   | 0.04   |   | — |   |
| Net income                                       | $                      | 0.71    |   | 0.81    |   | 0.83   |   | 0.73    |   |

|                                                  |                        |         |        |         |        |        |        |         |        |
|--------------------------------------------------|------------------------|---------|--------|---------|--------|--------|--------|---------|--------|
| (in thousands, except earnings per common share) | December 31, 2008 |
|                                             | First                  | Second  | Third  | Fourth  |
| Direct premiums written                          | $                      | 51,855  |   | 42,092  |   | 55,757 |   | 36,132  |   |
| Assumed premiums written                         | $                      | — |   | — |   | (6     | )      | — |   |
| Net premiums written                             | $                      | 44,586  |   | 36,964  |   | 48,825 |   | 31,907  |   |
| Net premiums earned                              | $                      | 44,293  |   | 42,823  |   | 42,063 |   | 43,651  |   |
| Net investment income                            | $                      | 7,747   |   | 7,599   |   | 7,641  |   | 7,307   |   |
| Net realized investment losses                   | $                      | (92     | )      | (30     | )      | (5,402 | )      | (8,028  | )      |
| Total revenues                                   | $                      | 52,045  |   | 50,493  |   | 44,451 |   | 43,015  |   |
|                                             |                   |    |   |    |
| Income from continuing operations                | $                      | 10,828  |   | 10,329  |   | 6,487  |   | 4,458   |   |
| Net income                                       | $                      | 10,828  |   | 10,329  |   | 6,487  |   | 4,458   |   |
|                                             |                   |    |   |    |
| Basic earnings per common share:                 |                   |    |   |    |
| Income from continuing operations                | $                      | 0.82    |   | 0.79    |   | 0.52   |   | 0.37    |   |
| Net income                                       | $                      | 0.82    |   | 0.79    |   | 0.52   |   | 0.37    |   |
|                                             |                   |    |   |    |
| Diluted earnings per common share:               |                   |    |   |    |
| Income from continuing operations                | $                      | 0.79    |   | 0.77    |   | 0.51   |   | 0.36    |   |
| Net income                                       | $                      | 0.79    |   | 0.77    |   | 0.51   |   | 0.36    |   |

----

|               |                                                                            |     |
|---------------|----------------------------------------------------------------------------|-----|
| Schedule I:   | Summary of Investments - Other Than Investments in Related Parties         | S-1 |
| Schedule II:  | Parent Company Only Condensed Statements of Financial Position             | S-2 |
| Schedule II:  | Parent Company Only Condensed Statements of Income                         | S-3 |
| Schedule II:  | Parent Company Only Condensed Statements of Cash Flows                     | S-4 |
| Schedule III: | Supplementary Insurance Information                                        | S-6 |
| Schedule IV:  | Reinsurance                                                                | S-6 |
| Schedule V:   | Valuation and Qualifying Accounts                                          | S-7 |
| Schedule VI:  | Supplemental Information Concerning Property-Casualty Insurance Operations | S-7 |

----

|                                                                                 |
|---------------------------------------------------------------------------------|
| Schedule I:  Summary of Investments - Other Than Investments in Related Parties |

|                                                                               |                        |            |                                                            |         |         |         |        |
|-------------------------------------------------------------------------------|------------------------|------------|------------------------------------------------------------|---------|---------|---------|--------|
| (in thousands)                                                                | Cost or Amortized Cost | Fair Value | Amount in the Consolidated Statement of Financial Position |
| Securities of states, municipalities and political subdivisions               | $                      | 195,416    |                                                       | 201,507 |    | 201,507 |   |
| Corporate securities                                                          | 208,250                |       | 218,904                                                    |    | 218,904 |    |
| Mortgage-backed and asset-backed securities                                   | 150,111                |       | 155,373                                                    |    | 155,373 |    |
| Securities of United States Government agencies and authorities               | 42,274                 |       | 43,323                                                     |    | 43,323  |    |
| Foreign government securities                                                 | 8,157                  |       | 8,130                                                      |    | 8,130   |    |
| Total fixed income securities, available-for-sale, and short-term investments | $                      | 604,208    |                                                       | 627,237 |    | 627,237 |   |
| Equity securities, available-for-sale                                         | 9,605                  |       | 11,930                                                     |    | 11,930  |    |
| Real estate investments                                                       | 4,678                  |       | 6,480                                                      |    | 4,678   |    |
| Other invested assets                                                         | 4,535                  |       | 4,516                                                      |    | 4,516   |    |
| Total investments                                                             | $                      | 623,026    |                                                       | 650,163 |    | 648,361 |   |

----

|                                                                              |
|------------------------------------------------------------------------------|
| Schedule II:  Parent Company Only Condensed Statements of Financial Position |

|                                                                                                                                                                 |         |         |         |         |        |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|---------|---------|---------|---------|--------|
| (in thousands)                                                                                                                                                  |    |    |
|                                                                                                                                                            | 2010    | 2009    |
| Assets                                                                                                                                                          |    |    |
| Investments in subsidiaries*                                                                                                                                    | $       | 299,050 |    | 309,449 |   |
| Equity securities, available-for-sale                                                                                                                           | 8,733   |    | 7,860   |    |
| Other invested assets                                                                                                                                           | 4,666   |    | 4,366   |    |
| Total investments                                                                                                                                               | 312,449 |    | 321,675 |    |
|                                                                                                                                                            |    |    |
| Cash and cash equivalents                                                                                                                                       | 12,042  |    | 4,854   |    |
| Due (to) from subsidiaries, net*                                                                                                                                | (476    | )       | 897     |    |
| Deferred income taxes                                                                                                                                           | 9,186   |    | 8,043   |    |
| Other assets                                                                                                                                                    | 4,253   |    | 4,571   |    |
| Total assets                                                                                                                                                    | $       | 337,454 |    | 340,040 |   |
|                                                                                                                                                            |    |    |
| Liabilities and Shareholders' Equity                                                                                                                            |    |    |
| Long-term debt                                                                                                                                                  | $       | 46,083  |    | 46,083  |   |
| Other liabilities                                                                                                                                               | 16,080  |    | 14,170  |    |
| Total liabilities                                                                                                                                               | 62,163  |    | 60,253  |    |
|                                                                                                                                                            |    |    |
| Preferred stock, $0.10 par value, 50,000,000 shares authorized; none issued                                                                                     | — |    | — |    |
| Common stock, $0.10 par value, 50,000,000 shares authorized; 8,926,692 and 10,142,613 shares issued and outstanding at December 31, 2010 and 2009, respectively | 893     |    | 1,014   |    |
| Additional paid-in capital                                                                                                                                      | — |    | — |    |
| Retained earnings                                                                                                                                               | 262,068 |    | 270,118 |    |
| Accumulated other comprehensive income (loss), net                                                                                                              | 12,330  |    | 8,655   |    |
| Total shareholders' equity                                                                                                                                      | 275,291 |    | 279,787 |    |
| Total liabilities and shareholders' equity                                                                                                                      | $       | 337,454 |    | 340,040 |   |

----

|                                                                  |
|------------------------------------------------------------------|
| Schedule II:  Parent Company Only Condensed Statements of Income |

|                                                                                                       |         |        |        |        |         |        |        |
|-------------------------------------------------------------------------------------------------------|---------|--------|--------|--------|---------|--------|--------|
| (in thousands)                                                                                        |    |   |   |
|                                                                                                  | 2010    | 2009   | 2008   |
| Revenues                                                                                              |    |   |   |
| Management fees from subsidiaries*                                                                    | $       | 35,356 |   | 36,014 |    | 36,652 |   |
| Net investment loss                                                                                   | (836    | )      | (723   | )      | (138    | )      |
| Net realized investment gain (loss)                                                                   | 185     |   | 495    |   | (5,725  | )      |
| Total revenues                                                                                        | 34,705  |   | 35,786 |   | 30,789  |   |
|                                                                                                  |    |   |   |
| Expenses                                                                                              |    |   |   |
| Other underwriting expenses                                                                           | 29,096  |   | 29,247 |   | 29,470  |   |
| Interest expense                                                                                      | 3,614   |   | 3,620  |   | 3,827   |   |
| Other expenses                                                                                        | — |   | 901    |   | — |   |
| Total expenses                                                                                        | 32,710  |   | 33,768 |   | 33,297  |   |
|                                                                                                  |    |   |   |
| Income (loss) from continuing operations before income taxes and equity in net income of subsidiaries | 1,995   |   | 2,018  |   | (2,508  | )      |
| Less: Income tax expense                                                                              | 736     |   | 322    |   | 12      |   |
| Income (loss) from continuing operations before equity in net income of subsidiaries                  | 1,259   |   | 1,696  |   | (2,520  | )      |
| Equity in net income of subsidiaries*                                                                 | 28,337  |   | 31,912 |   | 34,620  |   |
| Income from continuing operations                                                                     | 29,596  |   | 33,608 |   | 32,100  |   |
| Discontinued operations, net of income taxes                                                          | — |   | 411    |   | — |   |
| Net income                                                                                            | $       | 29,596 |   | 34,019 |    | 32,100 |   |

----

|                                                                      |
|----------------------------------------------------------------------|
| Schedule II:  Parent Company Only Condensed Statements of Cash Flows |

|                                                                                   |         |        |         |         |         |        |        |
|-----------------------------------------------------------------------------------|---------|--------|---------|---------|---------|--------|--------|
| (in thousands)                                                                    |    |   |    |
|                                                                              | 2010    | 2009   | 2008    |
| Operating Activities                                                              |    |   |    |
| Net income                                                                        | $       | 29,596 |    | 34,019  |    | 32,100 |   |
| Less: Discontinued operations                                                     | — |   | 411     |    | — |   |
| Income from continuing operations                                                 | 29,596  |   | 33,608  |    | 32,100  |   |
| Adjustments to reconcile net income to net cash provided by operating activities: |    |   |    |
| Equity in net income of subsidiaries*                                             | (28,337 | )      | (31,912 | )       | (34,620 | )      |
| Cash dividend from subsidiaries*                                                  | 42,800  |   | 35,800  |    | 49,150  |   |
| Depreciation and amortization                                                     | 307     |   | 295     |    | 785     |   |
| Realized (gain) loss on investments                                               | (185    | )      | (495    | )       | 5,725   |   |
| Realized loss on sale of property and equipment                                   | — |   | 18      |    | 23      |   |
| Deferred income tax benefit                                                       | (928    | )      | (1,223  | )       | (1,796  | )      |
| Share-based compensation                                                          | 2,787   |   | 3,298   |    | 2,954   |   |
| Excess tax benefits from share-based compensation                                 | (631    | )      | (1,630  | )       | (2,302  | )      |
| Other Changes in Assets and Liabilities                                           |    |   |    |
| Net due from subsidiaries*                                                        | 1,374   |   | 4,426   |    | 4,455   |   |
| Other assets and other liabilities                                                | 948     |   | (328    | )       | (5,983  | )      |
| Net cash provided by operating activities                                         | 47,731  |   | 41,857  |    | 50,491  |   |
|                                                                              |    |   |    |
| Investing Activities                                                              |    |   |    |
| Proceeds from                                                                     |    |   |    |
| Sale of equity securities, available for sale                                     | — |   | 2,783   |    | — |   |
| Sale of other invested assets                                                     | 394     |   | 177     |    | — |   |
| Purchases of                                                                      |    |   |    |
| Other invested assets                                                             | (287    | )      | (2,377  | )       | — |   |
| Property and equipment                                                            | (146    | )      | (608    | )       | (223    | )      |
| Capital contribution to subsidiaries*                                             | — |   | (13,349 | )       | — |   |
| Net cash used in investing activities                                             | $       | (39    | )       | (13,374 | )       | (223   | )      |

----

|                                                                                 |
|---------------------------------------------------------------------------------|
| Schedule II:  Parent Company Only Condensed Statements of Cash Flows, continued |

|                                                           |         |        |         |        |         |        |        |
|-----------------------------------------------------------|---------|--------|---------|--------|---------|--------|--------|
| (in thousands)                                            |    |   |    |
|                                                      | 2010    | 2009   | 2008    |
| Financing Activities                                      |    |   |    |
| Issuance of common stock                                  | $       | 1,207  |    | 2,803  |    | 6,645  |   |
| Repurchase of common stock                                | (42,342 | )      | (42,955 | )      | (68,118 | )      |
| Excess tax benefits from share-based compensation         | 631     |   | 1,630   |   | 2,302   |   |
| Net cash used in financing activities                     | (40,504 | )      | (38,522 | )      | (59,171 | )      |
|                                                      |    |   |    |
| Net increase (decrease) in cash and cash equivalents      | 7,188   |   | (10,039 | )      | (8,903  | )      |
| Cash and cash equivalents at beginning of year            | 4,854   |   | 14,893  |   | 23,796  |   |
| Cash and cash equivalents at end of year                  | $       | 12,042 |    | 4,854  |    | 14,893 |   |
|                                                      |    |   |    |
| Supplemental disclosure of cash flow information:         |    |   |    |
| Interest paid on debt                                     | $       | 3,614  |    | 3,621  |    | 3,586  |   |
| Federal income taxes paid                                 | $       | 11,300 |    | 14,206 |    | 15,616 |   |
|                                                      |    |   |    |
| Supplemental disclosure of non cash financing activities: |    |   |    |
| Issuance of restricted stock                              | $       | 2,954  |    | 1,331  |    | 1,945  |   |
| Share-based compensation                                  | $       | 2,787  |    | 3,298  |    | 2,954  |   |

----

|                                                    |
|----------------------------------------------------|
| Schedule III:  Supplementary Insurance Information |

|                                                           |                                          |         |        |         |        |         |        |
|-----------------------------------------------------------|------------------------------------------|---------|--------|---------|--------|---------|--------|
| (in thousands)                                            | Medical Professional and Other Liability |
|                                                      |  As of December 31,                 |
|                                                      | 2010                                     | 2009    | 2008   |
| Deferred policy acquisition costs ("DPAC")                | $                                        | 8,963   |   | 9,918   |   | 9,476   |   |
| Liability for losses and loss adjustment expenses ("LAE") | $                                        | 520,546 |   | 559,257 |   | 555,848 |   |
| Unearned premiums                                         | $                                        | 100,555 |   | 103,831 |   | 98,665  |   |
|                                                      |                                     |    |   |
|                                                      |                                     |    |   |
| (in thousands)                                            | Medical Professional and Other Liability |
|                                                      | For the year ended December 31,          |
|                                                      | 2010                                     | 2009    | 2008   |
| Net premiums written                                      | $                                        | 163,873 |   | 146,349 |   | 162,282 |   |
| Net premiums earned                                       | $                                        | 168,085 |   | 156,474 |   | 172,830 |   |
| Net investment income                                     | $                                        | 24,941  |   | 27,749  |   | 30,295  |   |
| Net losses and LAE                                        | $                                        | 97,329  |   | 92,185  |   | 99,721  |   |
| Amortization of DPAC                                      | $                                        | 19,735  |   | 16,689  |   | 18,043  |   |
| Other expenses (1)                                        | $                                        | 31,865  |   | 25,651  |   | 20,361  |   |

|                             |                                                                                                                                           |
|-----------------------------|-------------------------------------------------------------------------------------------------------------------------------------------|
| (1)     | Other expenses include other underwriting expenses and other expenses associated with medical professional and other liability insurance. |

|                           |
|---------------------------|
| Schedule IV:  Reinsurance |

|                                                              |                                          |         |         |         |         |         |        |
|--------------------------------------------------------------|------------------------------------------|---------|---------|---------|---------|---------|--------|
| (in thousands)                                               | Medical Professional and Other Liability |
|                                                         | 2010                                     | 2009    | 2008    |
| Gross premiums earned                                        | $                                        | 194,417 |    | 180,871 |    | 196,059 |   |
| Ceded premiums earned to other companies                     | (26,479                                  | )       | (24,455 | )       | (23,229 | )       |
| Assumed premiums earned from other companies                 | 147                                      |    | 58      |    | — |    |
| Net premiums earned                                          | $                                        | 168,085 |    | 156,474 |    | 172,830 |   |
|                                                         |                                     |    |    |
| Percentage of assumed premiums earned to net premiums earned | 0.09                                     | %       | 0.04    | %       | — | %       |

----

|                                                |
|------------------------------------------------|
| Schedule V:  Valuation and Qualifying Accounts |

|                                       |                                 |        |        |        |        |        |        |
|---------------------------------------|---------------------------------|--------|--------|--------|--------|--------|--------|
| (in thousands)                        | Allowance for Doubtful Accounts |
|                                  | 2010                            | 2009   | 2008   |
| Balance, beginning of period          | $                               | 300    |   | 300    |   | 300    |   |
| Amounts charged to costs and expenses | 338                             |   | 605    |   | 91     |   |
| Deductions                            | (338                            | )      | (605   | )      | (91    | )      |
| Balance, end of period                | $                               | 300    |   | 300    |   | 300    |   |

|                                       |                                     |         |         |         |         |         |        |
|---------------------------------------|-------------------------------------|---------|---------|---------|---------|---------|--------|
| (in thousands)                        | Allowance for Deferred Income Taxes |
|                                  | 2010                                | 2009    | 2008    |
| Balance, beginning of period          | $                                   | — |    | 675     |    | — |   |
| Amounts charged to costs and expenses | —                             |    | — |    | 675     |    |
| Deductions                            | —                             |    | (675    | )       | — |    |
| Balance, end of period                | $                                   | — |    | — |    | 675     |   |

|                                                                                          |
|------------------------------------------------------------------------------------------|
| Schedule VI:  Supplemental Information Concerning Property-Casualty Insurance Operations |

|                                   |                                     |         |        |         |        |         |        |
|-----------------------------------|-------------------------------------|---------|--------|---------|--------|---------|--------|
| (in thousands)                    |                                |
|                              | Consolidated Insurance Subsidiaries |
| As of December 31,                | 2010                                | 2009    | 2008   |
| Deferred policy acquisition costs | $                                   | 8,963   |   | 9,918   |   | 9,476   |   |
| Liability for losses and LAE      | $                                   | 520,546 |   | 559,257 |   | 555,848 |   |
| Unearned premiums                 | $                                   | 100,555 |   | 103,831 |   | 98,665  |   |
|                              |                                |    |   |
|                              |                                |    |   |
| (in thousands)                    |                                |
|                              | Consolidated Insurance Subsidiaries |
| For the year ended December 31,   | 2010                                | 2009    | 2008   |
| Net premiums written              | $                                   | 163,873 |   | 146,349 |   | 162,282 |   |
| Net premiums earned               | $                                   | 168,085 |   | 156,474 |   | 172,830 |   |
| Net investment income             | $                                   | 24,941  |   | 27,749  |   | 30,295  |   |
| Net losses and LAE, current year  | $                                   | 120,302 |   | 111,176 |   | 116,721 |   |
| Net losses and LAE, prior years   | $                                   | 22,973  |   | (18,991 | )      | (17,000 | )      |
| Amortization of DPAC              | $                                   | 19,735  |   | 16,689  |   | 18,043  |   |
| Net paid losses and LAE (1)       | $                                   | 136,818 |   | 120,191 |   | 120,476 |   |

|                             |                                                                                                                                                                                                                         |
|-----------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (1)     | Excluding net paid losses and LAE under commuted reinsurance agreements, our net paid losses and LAE were $136.5 million, $119.4 million, and $119.9 million for the years ended December 31, 2010, 2009 and 2008. |

----

|             |             |
|-------------|-------------|
| Exhibit No. | Description |

|        |        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 2.1    | (a)    | Agreement and Plan of Merger dated July 30, 2009 by and among the Registrant, First Professionals Insurance Company, Inc., FPIC Merger Corp., Advocate, MD Financial Group Inc., and the Stockholders Representative (incorporated by reference to Exhibit 2.1 to the Registrant's Current Report on Form 8-K (Commission File No. 1-11983) filed on July 30, 2009) (Schedules and certain exhibits to this exhibit have been omitted pursuant to Item 601(b)(2) of Regulation S-K.  The Registrant agrees to furnish supplemental copies of any of the omitted schedules and exhibits to the SEC upon request) |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | (b)    | First Amendment to Agreement and Plan of Merger dated August 31, 2009 by and  among the Registrant, First Professionals Insurance Company, Inc., FPIC Merger Corp., Advocate, MD Financial Group Inc., and the Stockholders Representative (incorporated by reference to Exhibit 2.2 to the Registrant's Current Report on Form 8-K (Commission File No. 1-11983) filed on November 18, 2009)                                                                                                                                                                                                                   |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 2.2    |   | Earnout Agreement dated November 13, 2009 between the Registrant and Mark E. Adams and Timothy P. Reardon, as Stockholders Representative (incorporated by reference to Exhibit 2.3 to the Registrant's Current Report on Form 8-K (Commission File No. 1-11983) filed on November 18, 2009)                                                                                                                                                                                                                                                                                                                    |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 3.1    | (a)    | Restated Articles of Incorporation of the Registrant (incorporated by reference to Exhibit 3 to the Registrant's Quarterly Report on Form 10-Q (Commission File No. 1-11983) filed August 16, 1999)                                                                                                                                                                                                                                                                                                                                                                                                             |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | (b)    | Articles of Amendment to Restated Articles of Incorporation of the Registrant (incorporated by reference to Exhibit 3 to the Registrant's Quarterly Report on Form 10-Q (Commission File No. 1-11983) filed August 16, 1999)                                                                                                                                                                                                                                                                                                                                                                                    |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 3.2    |   | Amended and Restated Bylaws of the Registrant (incorporated by referenced to Exhibit 3.1 to the Registrant's Current Report on Form 8-K (Commission File No. 1-11983) filed on September 2, 2009)                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 4.1    | (a)    | Indenture dated May 15, 2003, between the Registrant and U.S. Bank National Association, as debenture trustee (incorporated by reference to Exhibit 10(bbb) to the Registrant's Current Report on Form 8-K (Commission File No. 1-11983) filed May 16, 2003)                                                                                                                                                                                                                                                                                                                                                    |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | (b)    | Guarantee Agreement dated May 15, 2003, by and between the Registrant, as guarantor, and U.S. Bank National Association, as guarantee trustee (incorporated by reference to Exhibit 10(aaa) to the Registrant's Current Report on Form 8-K (Commission File No. 1-11983) filed May 16, 2003)                                                                                                                                                                                                                                                                                                                    |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 4.2    | (a)    | Indenture dated as of May 22, 2003, between the Registrant, as issuer and Wilmington Trust Company, as trustee (incorporated by reference to Exhibit 10(hhh) to the Registrant's Current Report on Form 8-K (Commission File No. 1-11983) filed May 29, 2003)                                                                                                                                                                                                                                                                                                                                                   |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | (b)    | Guarantee Agreement dated as of May 22, 2003, by and between the Registrant, as guarantor, and Wilmington Trust Company, as guarantee trustee (incorporated by reference to Exhibit 10(ggg) to the Registrant's Current Report on Form 8-K (Commission File No. 1-11983) filed May 29, 2003)                                                                                                                                                                                                                                                                                                                    |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 4.3    |   | Indenture dated as of May 22, 2003, between the Registrant, as issuer, and Wilmington Trust Company, as trustee (incorporated by reference to Exhibit 10(kkk) to the Registrant's Current Report on Form 8-K (Commission File No. 1-11983) filed May 29, 2003)                                                                                                                                                                                                                                                                                                                                                  |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 4.4    | (a)    | Indenture dated October 29, 2003, between the Registrant and U. S. Bank National Association, as debenture trustee (incorporated by reference to Exhibit 10(ppp) to the Registrant's Current Report on Form 8-K (Commission File No. 1-11983) filed November 3, 2003)                                                                                                                                                                                                                                                                                                                                           |
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   | (b)    | Guarantee Agreement dated October 29, 2003, between the Registrant, as guarantor, and U.S. Bank National Association, as guarantee trustee (incorporated by reference to Exhibit 10(ooo) to the Registrant's Current Report on Form 8-K (Commission File No. 1-11983) filed November 3, 2003)                                                                                                                                                                                                                                                                                                                   |

----

|        |        |                                                                                                                                                                                                                                                                              |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.1** |   | Form of Indemnity Agreement between the Registrant and certain members of its Board of Directors (incorporated by reference to Exhibit 10(s) to the Registrant's Registration Statement on Form S-4 (Registration No. 333-02040) filed March 7, 1996)                        |
|   |   |                                                                                                                                                                                                                                                                         |
| 10.2** |   | Form of Indemnity Agreement between the Registrant and certain members of its Board of Directors and certain of its employees (incorporated by reference to Exhibit 10(p) to the Registrant's Annual Report on Form 10-K (Commission File No. 1-11983) filed March 30, 2000) |
|   |   |                                                                                                                                                                                                                                                                         |
| 10.3** | (a)    | FPIC Insurance Group, Inc. Amended and Restated Omnibus Incentive Plan (incorporated by reference to Exhibit C to the Registrant's definitive proxy statement (Commission File No. 1-11983) filed April 29, 2005)                                                            |
|   |   |                                                                                                                                                                                                                                                                         |
|   | (b)    | Amendment to the Registrant's Amended and Restated Omnibus Incentive Plan (incorporated by referenced to Exhibit 10.2 to the Registrant's Quarterly Report on Form 10-Q (Commission File No. 1-11983) filed on May 6, 2009)                                                  |
|   |   |                                                                                                                                                                                                                                                                         |
|   | (c)    | Amendment to the Registrant's Amended and Restated Omnibus Incentive Plan (incorporated by reference to Exhibit 10.1 to the Registrant's Quarterly on Form 10-Q (Commission File No. 1-11983) filed on March 30, 2010)                                                       |
|   |   |                                                                                                                                                                                                                                                                         |
|   | (d)    | Form of Stock Option Agreement (incorporated by reference to Exhibit 10(bbbb) to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2004 (Commission File No. 1-11983) filed March 15, 2005)                                                        |
|   |   |                                                                                                                                                                                                                                                                         |
|   | (e)    | Form of Stock Option Agreement, effective January 2007 (incorporated by reference to Exhibit 10.3(c) to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2006 (Commission File No. 1-11983) filed on March 9, 2007)                               |
|   |   |                                                                                                                                                                                                                                                                         |
|   | (f)    | Form of Restricted Stock Agreement (incorporated by reference to Exhibit 10(cccc) to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2004 (Commission File No. 1-11983) filed March 15, 2005)                                                    |
|   |   |                                                                                                                                                                                                                                                                         |
|   | (g)    | Form of Restricted Stock Agreement, effective January 2007 (incorporated by reference to Exhibit 10.3(e) to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2006 (Commission File No. 1-11983) filed on March 9, 2007)                           |
|   |   |                                                                                                                                                                                                                                                                         |
|   | (h)    | Form of Restricted Stock Agreement, effective January 2008 (incorporated by reference to Exhibit 10.3(f) to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2007 (Commission File No. 1-11983) filed on February 27, 2008)                       |
|   |   |                                                                                                                                                                                                                                                                         |
|   | (i)    | Form of Restricted Stock Agreement, effective December 2008 (incorporated by referenced to Exhibit 10.3(g) to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2008 (Commission File No. 1-11983) filed on March 4, 2009)                         |
|   |   |                                                                                                                                                                                                                                                                         |
|   | (j)    | Form of Performance Unit Award Agreement, effective January 2008 (incorporated by reference to Exhibit 10.3(g) to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2007 (Commission File No. 1-11983) filed on February 27, 2008)                 |
|   |   |                                                                                                                                                                                                                                                                         |
|   | (k)    | Form of Performance Unit Award Agreement, effective December 2008 (incorporated by reference to Exhibit 10.3(i) to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2008 (Commission File No. 1-11983) filed on March 4, 2009)                    |
|   |   |                                                                                                                                                                                                                                                                         |
|   | (l)    | Form of Performance Unit Award Agreement, effective January 2010 (incorporated by reference to Exhibit 10.3(k) to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2009 (Commission File No. 1-11983) filed on March 3, 2010)                     |
|   |   |                                                                                                                                                                                                                                                                         |
|   | (m)    | Form of Performance Unit Award Agreement, effective December 2010*                                                                                                                                                                                                           |
|   |   |                                                                                                                                                                                                                                                                         |

----

|         |        |                                                                                                                                                                                                                                                                                            |
|---------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.4**  | (a)    | FPIC Insurance Group, Inc. Amended and Restated Director Stock Option Plan (incorporated by reference to Exhibit B to the Registrant's definitive proxy statement (Commission File No. 1-11983) filed March 15, 2005)                                                                      |
|    |   |                                                                                                                                                                                                                                                                                       |
|    | (b)    | Amendment to the Registrant's Amended and Restated Director Stock Option Plan (incorporated by referenced to Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q (Commission File No. 1-11983) filed on May 6, 2009)                                                            |
|    |   |                                                                                                                                                                                                                                                                                       |
|    | (c)    | Form of Stock Option Agreement (incorporated by reference to Exhibit 10.4(b) to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2006 (Commission File No. 1-11983) filed on March 9, 2007)                                                                     |
|    |   |                                                                                                                                                                                                                                                                                       |
|    | (d)    | Form of Amended and Restated Director Stock Plan Restricted Stock Award Agreement (incorporated by reference to Exhibit 10(hhhh) to the Registrant's Current Report on Form 8-K (Commission File No. 1-11983) filed June 3, 2005)                                                          |
|    |   |                                                                                                                                                                                                                                                                                       |
| 10.5**  | (a)    | FPIC Insurance Group, Inc. Supplemental Executive Retirement Plan, as amended (incorporated by reference to Exhibit 10.5 to the Registrant's Quarterly Report on Form 10-Q (Commission File No. 1-11983) filed May 17, 1999)                                                               |
|    |   |                                                                                                                                                                                                                                                                                       |
|    | (b)    | Amendment to the FPIC Insurance Group, Inc. Supplemental Executive Retirement Plan (incorporated by referenced to Exhibit 10.5(b) to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2008 (Commission File No. 1-11983) filed on March 4, 2009)                |
|    |   |                                                                                                                                                                                                                                                                                       |
| 10.6**  | (a)    | Florida Physicians Insurance Company Excess Benefit Plan (incorporated by reference to Exhibit 10(nn) to the Registrant's Registration Statement on Form S-4 (Registration No. 333-02040) filed March 7, 1996)                                                                             |
|    |   |                                                                                                                                                                                                                                                                                       |
|    | (b)    | FPIC Insurance Group, Inc. Excess Benefit Plan, as amended and restated effective January 1, 2008 (incorporated by referenced to Exhibit 10.6(b) to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2008 (Commission File No. 1-11983) filed on March 4, 2009) |
|    |   |                                                                                                                                                                                                                                                                                       |
| 10.7**  | (a)    | FPIC Deferred Compensation Plan (incorporated by reference to Exhibit 10.4 to the Registrant's Current Report on Form 8-K (Commission File No. 1-11983) filed December 12, 2007)                                                                                                           |
|    |   |                                                                                                                                                                                                                                                                                       |
|    | (b)    | FPIC Deferred Compensation Plan, as amended and restated, effective January 1, 2008 (incorporated by reference to Exhibit 10.10 to the Registrant's Current Report on Form 8-K (Commission File No. 1-11983) filed December 18, 2008)                                                      |
|    |   |                                                                                                                                                                                                                                                                                       |
| 10.8**  |   | FPIC Insurance Group, Inc. Amended and Restated 2008 Senior Executive Annual Incentive Plan (incorporated by referenced to Exhibit 10.1 to the Registrant's Current Report on Form 8-K (Commission File No. 1-11983) filed on March 9, 2009)                                               |
|    |   |                                                                                                                                                                                                                                                                                       |
| 10.9**  |   | Summary of Implementation Guide for 2011 Executive Incentive Compensation Plan*                                                                                                                                                                                                            |
|    |   |                                                                                                                                                                                                                                                                                       |
| 10.10** |   | Employment Agreement dated as of January 1, 2008, between the Registrant and John R. Byers (incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K (Commission File No. 1-11983) filed December 18, 2008)                                                |
|    |   |                                                                                                                                                                                                                                                                                       |
| 10.11** |   | Change in Control Severance Agreement dated as of January 1, 2008, between the Registrant and John R. Byers (incorporated by reference to Exhibit 10.2 to the Registrant's Current Report on Form 8-K (Commission File No. 1-11983) filed December 18, 2008)                               |
|    |   |                                                                                                                                                                                                                                                                                       |
| 10.12** |   | Employment Agreement dated as of January 1, 2008, between the Registrant and Charles Divita, III (incorporated by reference to Exhibit 10.3 to the Registrant's Current Report on Form 8-K (Commission File No. 1-11983) filed December 18, 2008)                                          |
|    |   |                                                                                                                                                                                                                                                                                       |

----

|         |        |                                                                                                                                                                                                                                                                                     |
|---------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.13** |   | Change in Control Severance Agreement dated as of January 1, 2008, between the Registrant and Charles Divita, III (incorporated by reference to Exhibit 10.4 to the Registrant's Current Report on Form 8-K (Commission File No. 1-11983) filed December 18, 2008)                  |
|    |   |                                                                                                                                                                                                                                                                                |
| 10.14** |   | Employment Agreement dated as of January 1, 2008, between the Registrant and Robert E. White, Jr, (incorporated by reference to Exhibit 10.5 to the Registrant's Current Report on Form 8-K (Commission File No. 1-11983) filed December 18, 2008)                                  |
|    |   |                                                                                                                                                                                                                                                                                |
| 10.15** |   | Change in Control Severance Agreement dated as of January 1, 2008, between the Registrant and Robert E. White, Jr. (incorporated by reference to Exhibit 10.6 to the Registrant's Current Report on Form 8-K (Commission File No. 1-11983) filed December 18, 2008)                 |
|    |   |                                                                                                                                                                                                                                                                                |
| 10.16** |   | Executive Employment Agreement dated July 30, 2009 by and among the Registrant, Advocate, MD Financial Group Inc. and Mark E. Adams (incorporated by referenced to Exhibit 2.4 to the Registrant's Current Report on Form 8-K (Commission File No. 1-11983) filed on July 30, 2009) |
|    |   |                                                                                                                                                                                                                                                                                |
| 10.17** |   | Summary of Compensation of Outside Directors (incorporated by reference to Exhibit 10.3(f) to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2007 (Commission File No. 1-11983) filed on February 27, 2008)                                            |
|    |   |                                                                                                                                                                                                                                                                                |
| 10.18   | (a)    | Noncompetition Agreement made as of September 29, 2006, by the Registrant (incorporated by reference to Exhibit 2.3 to the Registrant's Current Report on Form 8-K (Commission File No. 1-11983) filed October 2, 2006)                                                             |
|    |   |                                                                                                                                                                                                                                                                                |
|    | (b)    | Non-Competition Agreement dated July 30, 2009 by and among the Registrant, Advocate, MD Financial Group Inc. and Mark E. Adams (incorporated by reference to Exhibit 2.3 to the Registrant's Current Report on Form 8-K filed (Commission File No. 1-11983) filed on July 30, 2009) |
|    |   |                                                                                                                                                                                                                                                                                |
| 10.19** |   | Settlement and Deferred Compensation Agreement effective December 31, 2008, between Registrant and John R. Byers (incorporated by reference to Exhibit 10.7 to the Registrant's Current Report on Form 8-K (Commission File No. 1-11983) filed December 18, 2008)                   |
|    |   |                                                                                                                                                                                                                                                                                |
| 10.20** |   | Settlement and Deferred Compensation Agreement effective December 31, 2008, between Registrant and Charles Divita, III (incorporated by reference to Exhibit 10.8 to the Registrant's Current Report on Form 8-K (Commission File No. 1-11983) filed December 18, 2008)             |
|    |   |                                                                                                                                                                                                                                                                                |
| 10.21** |   | Settlement and Deferred Compensation Agreement effective December 31, 2008, between Registrant and Robert E. White, Jr. (incorporated by reference to Exhibit 10.9 to the Registrant's Current Report on Form 8-K (Commission File No. 1-11983) filed December 18, 2008)            |
|    |   |                                                                                                                                                                                                                                                                                |
| 21      |   | Subsidiaries of the Registrant *                                                                                                                                                                                                                                                    |
|    |   |                                                                                                                                                                                                                                                                                |
| 23      |   | Consent of PricewaterhouseCoopers LLP *                                                                                                                                                                                                                                             |
|    |   |                                                                                                                                                                                                                                                                                |
| 31.1    |   | Certification of John R. Byers, President and Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 *                                                                                                                                                  |
|    |   |                                                                                                                                                                                                                                                                                |
| 31.2    |   | Certification of Charles Divita, III, Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 *                                                                                                                                                          |
|    |   |                                                                                                                                                                                                                                                                                |
| 32      |   | Certification of John R. Byers, President and Chief Executive Officer, and Charles Divita, III, Chief Financial Officer, pursuant to 18 U.S.C. Section1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 *                                                   |
|    |   |                                                                                                                                                                                                                                                                                |