<PAGE>   1


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

                                 ---------------

                                   FORM 10-K/A

     [MARK ONE]

[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999

                                       OR

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

            FOR THE TRANSITION PERIOD FROM _____________ TO ________

                        COMMISSION FILE NUMBER 000-23005

                        INSPIRE INSURANCE SOLUTIONS, INC.
             (Exact Name of Registrant as Specified in Its Charter)

                               300 BURNETT STREET
                                FORT WORTH, TEXAS
                    (Address of Principal Executive Offices)

           TEXAS                       76102                    75-2595937
(State or Other Jurisdiction of      (Zip Code)             (I.R.S. Employer
Incorporation or Organization)                              Identification No.)

       Registrant's telephone number, including area code: (817) 348-3900


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

          TITLE OF CLASS                  NAME OF EXCHANGE ON WHICH REGISTERED

              None                                     N/A

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

                     COMMON STOCK, PAR VALUE $.01 PER SHARE
                                (Title of Class)

                 SERIES A JUNIOR PREFERRED STOCK PURCHASE RIGHTS
                                (Title of Class)

Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No. [ ]

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

As of March 1, 2000, the aggregate market value of voting stock held by
non-affiliates was $54,641,763.

As of March 1, 2000 there were 18,998,270 shares of Common Stock outstanding.

================================================================================



<PAGE>   2



     This Form 10-K contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended (the
"Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). When used in this Form 10-K, words such as
"anticipate," "believe," "estimate," "expect," "intend" and similar expressions,
as they relate to INSpire Insurance Solutions, Inc. ("INSpire" or the "Company")
or its management, identify forward-looking statements. These forward-looking
statements are based on information currently available to INSpire's management.
Actual results could differ materially from those contemplated by the
forward-looking statements as a result of certain factors, including but not
limited to difficulties associated with growth, INSpire's dependence on major
customers and limited operating history, technological change, competitive
factors and pricing pressures, product development risks, changes in legal and
regulatory requirements, general economic conditions and other factors described
elsewhere in this Form 10-K. Such statements reflect the current views of
INSpire's management with respect to future events and are subject to these and
other risks, uncertainties and assumptions relating to the operations, results
of operations, growth strategy and liquidity of INSpire. All subsequent written
and oral forward-looking statements attributable to INSpire or persons acting on
its behalf are expressly qualified in their entirety by this paragraph.

     The undersigned registrant hereby amends and restates the information
required by Item 3 of Part I and Items 10, 11, 12 and 13 of Part III of the
previously filed Annual Report on Form 10-K for the year ended December 31,
1999.

ITEM 3. LEGAL PROCEEDINGS.

     From time to time INSpire receives various claims incidental to its
business, including claims alleging breach of warranty, breach of contract,
deceptive trade practices and similar claims under license agreements and other
agreements with customers of the Company. Such claims include a lawsuit filed on
April 18, 2000 in the District Court of Texas, Tarrant County by Buena Venture
Associates, L.P. ("Buena Venture"), a shareholder of INSpire (Buena Venture
Associates, L.P. v. INSpire Insurance Solutions, Inc. (048-182682-00)). Buena
Venture seeks a declaration that a recent amendment to the Company's bylaws
adopted by the Board of Directors is invalid with respect to the 2000 annual
meeting of shareholders and an injunction prohibiting its enforcement at such
meeting.  Buena Venture also seeks reimbursement for attorneys' fees incurred in
connection with this matter.  INSpire intends to defend this suit vigorously in
all aspects.  However, the ultimate outcome of this matter cannot presently be
determined.

     Such claims also include a lawsuit filed on June 23, 1999 in the United
States District Court for the Eastern District of North Carolina by Medical
Mutual Insurance Company of North Carolina ("Medical Mutual"), a former customer
of the Company (Medical Mutual Insurance Company of North Carolina vs. INSpire
Insurance Solutions, Inc. (5-99CV-416-F3)). Medical Mutual seeks recovery for an
amount of at least approximately $696,000 previously paid to the Company,
damages in excess of $1.0 million, a declaratory judgment that approximately
$1.1 million invoiced to such customer is not owed and treble damages and
attorney fees. INSpire intends to vigorously defend this lawsuit, and has filed
a counterclaim seeking recovery of approximately $1.1 million invoiced to such
customer and attorneys' fees. Management does not believe the outcome of this
lawsuit will have a material adverse effect on the Company's business, financial
condition, cash flows or results of operations.

     Such claims also include a lawsuit filed on November 9, 1999 in the United
States District Court for the Northern District of Illinois by Zurich American
Insurance Company ("Zurich"), a former customer of the Company (Zurich American
Insurance Company vs. INSpire Insurance Solutions, Inc. (99C-7288)). Zurich
seeks recovery for an amount of at least approximately $4.3 million previously
paid to the Company, a declaratory judgment that approximately $2.0 million
invoiced to such customer is not owed and damages to compensate Zurich for
INSpire's alleged breaches of contract. INSpire intends to vigorously defend
this lawsuit, and has filed a counterclaim seeking recovery of approximately
$2.0 million invoiced to such customer and attorneys' fees. Management does not
believe the outcome of this lawsuit will have a material adverse effect on the
Company's business, financial condition, cash flows or results of operations.

     In December 1997, INSpire entered into a contract with Sul America Cia
Nacional de Seguros ("Sul America") to provide a license for WPC and other
software products, and software services for the implementation of such
products. In conjunction with this contract, INSpire was required to arrange a
surety to provide Sul America with a performance bond in the amount of $3.7
million, the proceeds of which could be used in the event that INSpire did not
fulfill its obligations under the contract. The contract was segregated into
three phases of deliverables, two of which have been accepted and paid for in
the amount of $2.5 million by Sul America. In August 1999, Sul America
terminated its contract with the Company, and demanded payment under the
performance bond. Under its agreement to indemnify the surety against losses
under the performance bond allegedly caused by INSpire's default, the Company
arranged an irrevocable standby letter of credit in October 1999 with Bank of
America, N.A. in the amount of $3.7 million. On December 21, 1999, INSpire filed
a lawsuit in the 8th Civil Court of Rio de Janeiro (INSpire Insurance Solutions,
Inc. vs. Sul America Seguros S.A. and INA Seguradora S.A. (99.001.175.210-6))
requesting a preliminary injunction, which was granted in January 2000,
restricting the surety from paying $3.7 million to Sul America until a final
decision is rendered in the ordinary lawsuit to be filed. INSpire intends to
pursue collection of its outstanding receivable balance of $1.2 million from Sul
America and defend itself against Sul America's claims that the Company failed
to comply with the terms of the contract. The ultimate outcome of this matter
cannot presently be determined.





                                       2
<PAGE>   3
     On December 3, 1999, a shareholder class action lawsuit was filed in the
United States District Court for the Northern District of Texas on behalf of all
purchasers of the Company's Common Stock during the period between January 28,
1998 and October 14, 1999 (Southland Securities Corporation et. al. vs. INSpire
Insurance Solutions, Inc. et. al. (7-99CV-243-R)). The named defendants include
the Company, certain officers and directors of the Company, and Millers
Insurance. The complaint alleges violations under Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934 and Rule lOb-5 promulgated thereunder by
making false and misleading statements and failing to disclose material facts
necessary in order to make the statements made, in light of the circumstances
under which they were made, not misleading. The plaintiff seeks monetary damages
and interest. Two additional shareholder class action lawsuits, nearly identical
to the one described above, have been filed against the Company in the United
States District Court for the Northern District of Texas: Larry Altobell and
Lawrence J. Miller et. al. vs. INSpire Insurance Solutions, Inc. et. al.
(7-99CV-248-R) filed on December 16, 1999, and Stacy B. and Rhonda K. Lofton et.
al. vs. INSpire Insurance Solutions, Inc. et. al. (7-OOCV-001-R) filed on
January 3, 2000. INSpire intends to defend these suits vigorously in all
aspects. However, the ultimate outcome of these matters cannot presently be
determined

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT

     The Board of Directors of INSpire currently consists of six directors. The
following table sets forth certain information as of April 28, 2000 with respect
to the directors of INSpire:

<TABLE>
<CAPTION>
                                                                   POSITIONS               SERVED AS
NAME                                                     AGE      WITH COMPANY           DIRECTOR SINCE    TERM EXPIRES
----                                                     ---    ------------------       ---------------   ------------
<S>                                                      <C>    <C>                      <C>               <C>
Harvey Bartel .................................          57     Director                     1996              2000

Daniel E. Berce ...............................          46     Director                     1999              2001

R. Earl Cox, III ..............................          66     Director                     1996              2001

F. George Dunham III ..........................          41     Director and Chief           1995              2000
                                                                Executive Officer

Jeffrey W. Robinson ...........................          42     Director, President          2000              2002
                                                                and Chief
                                                                Operating Officer

Mitch S. Wynne ................................          41     Director                     1997              2002
</TABLE>


     Mr. Bartel has served as a director of INSpire since 1996, and his current
term as director expires in 2000. Mr. Bartel also served as a director of The
Millers Insurance Company ("Millers Insurance") (formerly The Millers Mutual
Fire Insurance Company) and The Millers Casualty Insurance Company ("Millers
Casualty") from March 1995 to June 1997. Mr. Bartel has been a partner with the
law firm of Cantey & Hanger, LLP since 1968.

     Mr. Berce has served as a director of INSpire since March 1999, and his
current term as director expires in 2001. Mr. Berce has served as Vice Chairman
of AmeriCredit Corp., a publicly traded consumer finance company
("AmeriCredit"), since November 1996. Mr. Berce has served as Chief Financial
Officer and a director of AmeriCredit since May 1990 and as Treasurer of
AmeriCredit from May 1990 to November 1996. Mr. Berce has also served as a
director of Curative Health Services, Inc., a publicly traded health services
company, since February 2000. Previously, Mr. Berce was a partner with
PricewaterhouseCoopers LLP.

     Mr. Cox has served as a director of INSpire since 1996, and his current
term as director expires in 2001. Mr. Cox served as a director of Millers
Insurance and Millers Casualty from March 1987 to June 1997. Since 1977, Mr. Cox
has served as president of R.E. Cox Realty Co. Mr. Cox has been a co-owner of
OFCO Office Furniture, Inc. since 1985. Mr. Cox has served as a director of KBK
Capital Corp., a factoring company, since 1995 and as a director of Tandycraft,
Inc., a manufacturer and retailer of craft products, since 1985. Mr. Cox served
as Chairman of the Board of Tandycraft, Inc. from 1985 until November 1999.

     Mr. Dunham has served as a director and Chief Executive Officer of
INSpire since its inception in 1995. His current term as director expires in
2000. Mr. Dunham also served as President of INSpire from its inception in 1995
to April 1998. Mr. Dunham served as Chairman of the Board of INSpire from its
inception in 1995 to March 1996 and was again elected to that position in June
1997. Mr. Dunham served as a director of Millers Insurance and Millers Casualty
from 1992 to January 2000. From September 1999 to January 2000, he also served
as interim Chief Executive Officer of Millers Insurance and Millers Casualty.
From October





                                       3
<PAGE>   4

1998 to January 2000, he served as Chairman of the Board of Millers Insurance
and Millers Casualty. From June 1997 to October 1998, he served as Vice Chairman
of the Board of Millers Insurance and Millers Casualty. From 1994 to June 1997,
Mr. Dunham served as President and Chief Executive Officer of Millers Insurance
and Millers Casualty. From 1992 to 1994, Mr. Dunham served as Executive Vice
President and Chief Financial Officer of Millers Insurance and Millers Casualty.
From 1991 to 1992, Mr. Dunham served as Vice President -- Finance of Lindsey
Morden Claim Services, Inc., an insurance claims services and administration
company.

     Mr. Robinson was appointed as a director and President and Chief Operating
Officer by the Board of Directors effective January 7, 2000, and his current
term as director expires in 2002. Mr. Robinson previously served as Executive
Vice President -- Outsourcing of INSpire since June 1997. From November 1996 to
June 1997, Mr. Robinson served as Vice President -- Policy Life Cycle of
INSpire, Millers Insurance and Millers Casualty. From 1985 to March 1997, Mr.
Robinson served in various management positions with Policy Management Systems
Corporation ("PMSC"), including Vice President of the Risk Services Division.
Prior to 1985, Mr. Robinson served in various management and analyst positions
for Home Insurance Company and Business Computer Systems, an insurance
processing and administration company.

     Mr. Wynne has served as a director of INSpire since March 1997, and his
current term as director expires in 2002. Mr. Wynne also served as a director of
Millers Insurance and Millers Casualty from March l997 to June 1997. Mr. Wynne
has owned and operated Wynne Petroleum Company, an oil and gas production
company, for more than five years.

     William J. Smith, III, whose term as director was scheduled to expire in
2002, resigned from the Board of Directors effective January 7, 2000. Mr. Smith
served as a director and President and Chief Operating Officer of INSpire from
April 1998 to January 2000.

EXECUTIVE OFFICERS

     Set forth below is a table identifying executive officers of INSpire who
are not identified herein as directors:

<TABLE>
<CAPTION>
NAME                                            AGE                    POSITION WITH COMPANY
----                                            ---                    ---------------------
<S>                                             <C>    <C>
John C. Aldredge.........................       54     Executive Vice President and Chief Technology Officer

Ronald O. Lynn...........................       62     Executive Vice President and Chief Information Officer

Robert K. Agazzi.........................       56     Executive Vice President -- Software and Systems

James P. Strickland......................       33     Senior Vice President -- Sales and Marketing
</TABLE>

     Mr. Aldredge has served as Executive Vice President and Chief Technology
Officer of INSpire since September 1999, and previously served as Senior Vice
President -- Research and Development of INSpire from September 1998. From
January 1996 to September 1998, Mr. Aldredge served as Senior Vice President for
Technology Services for Insurance Technology Services, Inc., an insurance
systems integration and consulting firm. From 1993 to December 1995, Mr.
Aldredge served as the Chief Information Officer of the Texas Workers
Compensation Insurance Fund. Before 1993, he served as an officer of several
software companies and Chief Information Officer of the City of Lubbock, Texas.

     Mr. Lynn has served as Executive Vice President and Chief Information
Officer of INSpire since March 1997. From March 1996 to March 1997, Mr. Lynn
served as Vice President of INSpire. Mr. Lynn also served as Executive Vice
President and Chief Information Officer from March 1997 to June 1997 and as Vice
President from 1993 to March 1997 of Millers Insurance and Millers Casualty.
From 1992 to 1993, Mr. Lynn served as Vice President of Harco National Insurance
Company, where he was responsible for computer related functions. From 1988 to
1992, Mr. Lynn served as Assistant Vice President of Property and Casualty
Processing Services for PMSC.

     Mr. Agazzi has served as Executive Vice President -- Software and Systems
of INSpire since July 1997. Mr. Agazzi served as President of Strategic Data
Systems. Inc. ("SDS") from 1989 until July 1997 and as Vice President --
Marketing of SDS from 1983 to 1989. Prior to 1983, Mr. Agazzi served in various
management positions with PMSC and several insurance and software development
companies.

     Mr. Strickland has served as Senior Vice President -- Sales and Marketing
of INSpire since January 1998. From 1996 to January 1998, Mr. Strickland served
as Vice President of Integrated Business Services of Computer Sciences
Corporation (formerly The Continuum Company, Inc.), a software development and
policy and claims administration company for property and casualty and life
insurance companies. From 1992 to 1996, Mr. Strickland served as Vice President
of Outsourcing Services for The Continuum



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<PAGE>   5

Company, Inc. From 1988 to 1996, Mr. Strickland served as Director of
Outsourcing Sales Support for Electronic Data Systems Corporation.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

     Section 16(a) of the Exchange Act requires directors and officers of
INSpire, and persons who own more than 10% of the Common Stock, to file with the
Securities and Exchange Commission (the "SEC") initial reports of Common Stock
ownership and reports of changes in such ownership. A reporting person must file
a Form 3 -- Initial Statement of Beneficial Ownership of Securities within 10
days after such person becomes a reporting person. A reporting person must file
a Form 4 -- Statement of Changes of Beneficial Ownership of Securities within 10
days after any month in which such person's beneficial ownership of securities
changes, except for certain changes exempt from the reporting requirements of
Form 4. Such exempt changes include stock options granted under a plan
qualifying pursuant to Rule 16b-3 under the Exchange Act. A reporting person
must file a Form 5 -- Annual Statement of Beneficial Ownership of Securities
within 45 days after the end of the issuer's fiscal year to report any changes
in ownership during such year not reported on a Form 4, including changes exempt
from the reporting requirements of Form 4.

     The SEC's rules require INSpire's reporting persons to furnish INSpire with
copies of all Section 16(a) reports that they file. Based solely upon a review
of the copies of such reports furnished to INSpire and written representations
that no other reports were required with respect to the year ended December 31,
1999, INSpire believes that the reporting persons have complied with all
applicable Section 16(a) filing requirements for 1999 on a timely basis, except
for Forms 4 due in January 2000 with respect to Messrs. Agazzi, Aldredge,
Bartel, Berce, Cox, Lynn, Robinson, Strickland and Wynne, which were filed late.

ITEM 11. EXECUTIVE COMPENSATION

     Amounts and prices related to shares of Common Stock have been adjusted to
give effect to a three-for-two stock split of the Common Stock, effected in the
form of a stock dividend paid on August 17, 1998. The following table sets forth
the annual and long-term compensation with respect to the Chief Executive
Officer of INSpire and INSpire's four most highly compensated executive officers
other than the Chief Executive Officer (the "named executive officers") for
services rendered during 1999, 1998 and 1997:

                           SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
                                                                                               LONG-TERM
                                                                                              COMPENSATION
                                                                                              ------------
                                                         ANNUAL COMPENSATION(1)                SECURITIES
                                                ----------------------------------------       UNDERLYING        ALL OTHER
                                                YEAR         SALARY($)          BONUS($)        OPTIONS(#)     COMPENSATION($)
                                                ----   ----------------------   --------      ------------     ---------------
<S>                                             <C>          <C>                <C>           <C>              <C>
F. George Dunham, III ..............            1999         400,000                 --              --              --
   Chief Executive Officer                      1998         391,667                 --         270,000              --
   and Chairman of the Board                    1997         175,000(2)         175,000       1,397,309              --

William J. Smith, III ..............            1999         325,000                 --          50,000         100,000(4)
   President and Chief Operating                1998         216,667(5)              --         375,000         199,332(6)
   Officer (3)

Jeffrey W. Robinson ................            1999         210,000                 --          75,000              --
   President and Chief Operating                1998         127,500                 --          45,000              --
   Officer (3)                                  1997         115,000             57,500         237,543              --

Kenneth J. Meister .................            1999         275,000(7)              --         300,000         105,603(8)
   Executive Vice President and
   Chief Financial Officer

James P. Strickland ................            1999         152,500            150,000          25,000              --
   Senior Vice President --                     1998         130,000(9)              --         112,500              --
   Sales and Marketing
</TABLE>

-------------



                                       5
<PAGE>   6

(1)  Does not include "Other Annual Compensation" because amounts of certain
     perquisites and other noncash benefits provided by INSpire did not exceed
     the lesser of $50,000 or 10% of the total annual base salary and bonus
     disclosed in this table for the respective officer.

(2)  Represents salary paid to Mr. Dunham for the six month period ended
     December 31, 1997. Mr. Dunham was compensated by Millers Insurance for the
     six month period ended June 30, 1997.

(3)  Mr. Robinson succeeded Mr. Smith as President and Chief Operating Officer
     of INSpire upon Mr. Smith's resignation effective January 7, 2000. Mr.
     Robinson served as Executive Vice President--Outsourcing prior to January
     7, 2000.

(4)  Represents deferred compensation paid to Mr. Smith pursuant to his
     employment agreement.

(5)  Represents salary paid to Mr. Smith during 1998 since his employment with
     INSpire began in April 1998.

(6)  Represents moving expenses and a one-time bonus paid to Mr. Smith in
     connection with his employment with INSpire.

(7)  Mr. Meister began employment with INSpire in January 1999 and resigned his
     position effective March 31, 2000.

(8)  Represents moving expenses and club dues paid on behalf of Mr. Meister in
     connection with his employment with INSpire.

(9)  Represents salary paid to Mr. Strickland during 1998 since his employment
     with INSpire began in January 1998.


     The following table sets forth certain information concerning the options
granted to the named executive officers during 1999. For additional information
on and certain terms of such options, see "-- Stock Option Plan."


                        OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
                                                        INDIVIDUAL GRANTS
                            ------------------------------------------------------------------------
                                                                                                           POTENTIAL REALIZABLE
                                                                                                             VALUE AT ASSUMED
                              NUMBER OF       % OF TOTAL                     MARKET                       ANNUAL RATES OF STOCK
                             SECURITIES         OPTIONS                     PRICE ON                        PRICE APPRECIATION
                             UNDERLYING        GRANTED TO     EXERCISE      DATE OF                        FOR OPTION TERM($)(2)
                               OPTIONS        EMPLOYEES IN     PRICE         GRANT        EXPIRATION    ---------------------------
                             GRANTED (#)     FISCAL YEAR(1)    ($/SH)        ($/SH)          DATE             5%            10%
                            ------------     -------------   ----------   ------------   -----------    ------------   ------------
<S>                         <C>              <C>             <C>          <C>            <C>            <C>            <C>
William J. Smith, III ...      50,000(3)                 4        15.38          15.38      1/27/05          261,449        593,138
Jeffrey W. Robinson .....      75,000(4)                 7         4.11           4.11     12/21/05          104,809        237,776
Kenneth J. Meister ......     300,000(5)                27        16.13          16.13      1/11/05        1,645,213      3,732,426
James P. Strickland .....      25,000(4)                 2         4.11           4.11     12/21/05           34,936         79,259
</TABLE>

----------

(1)  Options to purchase a total of 1,121,500 shares of Common Stock were
     granted to employees in 1999.

(2)  The amounts under the columns labeled "5%" and "10%" are included by the
     Company pursuant to certain rules promulgated by the Securities and
     Exchange Commission (the "SEC") and are not intended to forecast future
     appreciation, if any, in the price of the Common Stock. Such amounts are
     based on the assumption that the named persons hold the options for the
     full term of the options. The actual value of the options will vary in
     accordance with the market price of the Common Stock.

(3)  Options are subject to a five-year vesting schedule, with one-fifth
     becoming exercisable on each of the first five anniversaries of the date of
     grant.

(4)  Options are subject to a three-year vesting schedule, with one-third
     becoming exercisable on each of the first three anniversaries of the date
     of grant.



                                       6
<PAGE>   7


(5)  Options are subject to a four-year vesting schedule, with one-fifth
     becoming exercisable on the date of grant and one-fifth becoming
     exercisable on each of the first four anniversaries of the date of grant.

     The following table sets forth certain information concerning options
exercised in 1999 by the named executive officers and all unexercised options
held by the named executive officers as of December 31, 1999. The value of
unexercised in-the-money options at fiscal year-end is based on the closing
price of the Common Stock of $4.59 on December 31, 1999. For additional
information on and certain terms of such options, see "-- Stock Option Plan."

<TABLE>
<CAPTION>
                       AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION VALUES


                                                                NUMBER OF UNEXERCISED         VALUE OF UNEXERCISED
                                 SHARES                                OPTIONS                IN-THE-MONEY OPTIONS
                                ACQUIRED                       AT FISCAL YEAR-END (#)        AT FISCAL YEAR-END ($)
                                   ON          VALUE        ---------------------------    ---------------------------
                              EXERCISE(#)    REALIZED($)    EXERCISABLE   UNEXERCISABLE    EXERCISABLE   UNEXERCISABLE
                              -----------    -----------    -----------   -------------    -----------   -------------
<S>                           <C>            <C>            <C>           <C>              <C>           <C>
F. George Dunham, III ....             --             --      1,042,846         270,000        520,777             --

William J. Smith, III ....             --             --             --              --             --             --

Jeffrey W. Robinson ......             --             --        143,418         159,126        315,792         36,375

Kenneth J. Meister .......             --             --         60,000         240,000             --             --

James P. Strickland ......             --             --         22,500         115,000             --         12,125
</TABLE>

EMPLOYMENT AND INDEMNIFICATION AGREEMENTS

     In July 1997, INSpire entered into employment agreements with Messrs.
Dunham and Robinson, each of which terminates in June 2000, and which provide
for an annual salary for Mr. Dunham of $350,000 and an annual salary for Mr.
Robinson of $115,000. Messrs. Dunham and Robinson have been granted options to
purchase 1,667,309 and 357,543 shares of Common Stock, respectively, under the
Second Amended and Restated 1997 Stock Option Plan (the "Stock Option Plan").
Each of Messrs. Dunham and Robinson shall be entitled to participate in
INSpire's 1998 Annual Bonus Plan during the remainder of the terms of their
respective employment agreements and each is subject to noncompetition and
confidentiality provisions. See "-- Stock Option Plan."

     Each employment agreement with Messrs. Dunham and Robinson also provides
that if there is a "change of control" of INSpire, the employee shall be paid,
for the term of his employment agreement, plus a period of two years thereafter,
his annual "cash compensation" (which is based upon such employee's average cash
compensation for the two years prior to such change of control) along with an
annual amount equal to 50% of such average annual cash compensation (the
"Bonus"). The total amount, however, cannot exceed the amount that would cause
such payment to be deemed a "parachute payment" under Section 280G of the
Internal Revenue Code of 1986, as amended. Each agreement also provides that the
payments to such employee will cease if he is terminated for cause or in the
event of reasonable proof of any violation of the noncompetition or
confidentiality provisions of his employment agreement. Also, if following a
change of control an employee voluntarily terminates employment for other than
good reason (as defined in the employment agreement), his annual cash
compensation and Bonus will be payable for only one year following such
termination.

     In April 1998, INSpire entered into a five-year employment agreement with
Mr. Smith, which provided for an annual salary of $325,000. Mr. Smith's
employment agreement also provided that: (i) he would be entitled to five equal
annual installments of $100,000 in cash on each April 28 during the term of his
employment agreement provided he is employed on such date, and (ii) in the event
his employment agreement was terminated for any reason other than cause (as
defined in his employment agreement) prior to April 27, 2003, he would be
entitled to an additional one-time cash payment, the amount of which would
depend on the date of such termination. Mr. Smith resigned his employment with
INSpire effective January 7, 2000, and received a one-time cash payment of
$375,000 and severance compensation equal to one year's salary. Mr. Smith was
granted stock options to purchase 425,000 shares of Common Stock under the Stock
Option Plan, all of which were canceled pursuant to an agreement between Mr.
Smith and the Company effective December 10, 1999.



                                       7
<PAGE>   8

     In January 1999, INSpire entered into a three-year employment agreement
with Mr. Meister, which provided for an annual salary of $275,000. Mr. Meister
resigned his employment with INSpire effective March 31, 2000, and received a
one-time severance payment upon his termination equal to his annual salary. Mr.
Meister was granted stock options to purchase 300,000 shares of Common Stock
under the Stock Option Plan. Pursuant to the terms of the Stock Option Plan, Mr.
Meister's unexercisable options were canceled on his termination date, and any
outstanding exercisable options will be canceled 60 days after his termination
date.

     INSpire has entered into indemnification agreements with each of its
directors. Each indemnification agreement provides that INSpire shall indemnify
the director against certain liabilities and expenses actually and reasonably
incurred by the director in connection with any threatened, pending or completed
action, suit or proceeding, including an action by or on behalf of shareholders
of INSpire or by or in the right of INSpire, to which the director is, or is
threatened to be made, a party by reason of his status as a director, provided
that such individual did not derive an improper benefit, such individual did not
commit acts or omissions that were not in good faith or that involved
intentional misconduct or a knowing violation of the law, or such
indemnification is not otherwise disallowed under Texas law.

EMPLOYEE BENEFIT PLANS

     Millers Insurance has a defined benefit pension plan that covered the
employees of INSpire. INSpire and Millers Insurance have reached an agreement
that provides for the assets of this plan attributable to INSpire's employees to
be handled in the same manner as those assets attributable to terminated
employees who were 100% vested under such plan. Under the defined benefit
pension plan, participating employees of INSpire receive benefits as follows.
With respect to normal and late retirement benefits, a participating employee
who retires after age 65 will receive an annuity for life, payable monthly in an
amount determined actuarially on the basis of the participating employee's
account balance at age 65. A participant's account balance is equal to the
present value of his accrued benefit on July 1, 1996, calculated using an 8%
interest rate plus quarterly additions to the account equal to 5% of quarterly
considered compensation plus an interest credit equal to the rate on one-year
U.S. Treasury securities (but not greater than 30-year U.S. Treasury
securities). With respect to early retirement benefits, a participating employee
who retires on or after age 55 and before his normal retirement age is eligible
to receive an annuity for life, commencing at age 65 and payable monthly in an
amount equal to the amount calculated above for normal retirement benefits,
provided, however, that if such employee so elects, such employee may receive a
reduced pension benefit beginning on his elected retirement date. As of the date
of this Form 10-K, the estimated annual benefit payable upon retirement at
normal retirement age under the defined benefit pension plan for Mr. Dunham is
expected to be $10,789. Messrs. Smith, Robinson, Meister and Strickland were not
participants in the defined benefit pension plan, and therefore will not receive
any payments upon retirement under such plan.

     In addition, INSpire maintains a defined contribution plan for its
employees that is qualified under Section 401(k) of the Internal Revenue Code of
1986, as amended.

STOCK OPTION PLAN

     A total of 4,500,000 shares of Common Stock have been reserved for issuance
pursuant to the Stock Option Plan. The Stock Option Plan was initially adopted
by the Board of Directors in March 1997, amended and restated by the Board of
Directors in July 1997, amended by the Board of Directors effective as of July
30, 1997, and amended and restated by the Board of Directors in February 1998.
The Stock Option Plan was administered by the Board of Directors through January
27, 1998 and thereafter has been administered by the Compensation Committee.
Both nonqualified stock options and incentive stock options (as defined in the
Internal Revenue Code) may be granted under the Stock Option Plan. Incentive
stock options granted under the Stock Option Plan may be exercised solely by the
grantee, or in the case of a grantee's death or incapacity, by the grantee's
executors, administrators, guardians or other legal representatives and are not
assignable or transferable by such grantee. Nonqualified stock options may be
transferred to certain permitted transferees under the Stock Option Plan.

DIRECTOR STOCK OPTION PLAN

     In July 1997, the Board of Directors adopted the 1997 Director Stock Option
Plan, which was amended by the Board of Directors in February 1998 (the
"Director Plan"). The Director Plan is administered by the Board of Directors. A
total of 75,000 shares of Common Stock have been reserved for issuance pursuant
to the Director Plan.

     Each new nonemployee director who is elected (or appointed to fill any
vacancy) as a director of INSpire will be granted options under the Director
Plan to purchase 3,750 shares of Common Stock at the fair market value of the
Common Stock on the date of grant.



                                       8
<PAGE>   9

Also, each nonemployee director who has previously been granted options under
the Director Plan will be granted additional options under the Director Plan to
purchase 375 shares of Common Stock on the day immediately after each annual
meeting of shareholders of INSpire subsequent to the time at which such
nonemployee director is first elected or appointed as a director of INSpire if
such nonemployee director continues to serve as a director on such date of
grant. The options under the Director Plan will vest and be exercisable as of
the date of grant. Options granted under the Director Plan may be exercised
solely by the grantee, or in the case of a grantee's death or incapacity, by the
grantee's executors, administrators, guardians or other legal representatives,
and are not assignable or transferable by such grantee, except for certain
permitted transfers subject to the prior consent of the Board of Directors.

EMPLOYEE STOCK PURCHASE PLAN

     In July 1997, the Board of Directors adopted INSpire's 1997 Employee Stock
Purchase Plan (the "Stock Purchase Plan"), under which a total of 637,500 shares
of Common Stock have been reserved for issuance. Any employee who has been
employed by INSpire for 90 days is eligible to participate in offerings under
the Stock Purchase Plan.

     In 1999, INSpire implemented two semiannual offerings of Common Stock,
beginning on January 1 and July 1, of 75,000 shares of Common Stock each.
Pursuant to such offerings, 18,455 and 30,691 shares of Common Stock,
respectively, were purchased by participants under the Stock Purchase Plan.
INSpire anticipates that the Stock Purchase Plan will be further implemented by
four additional semiannual offerings of Common Stock occurring on January 1 and
July 1 for each of the years 2000 and 2001. The maximum number of shares issued
in each semi-annual offering will be 75,000 shares plus the number of unissued
shares remaining from prior offerings under the Stock Purchase Plan.

     On the commencement date of each offering under the Stock Purchase Plan, a
participating employee will be deemed to have been granted an option to purchase
a maximum number of shares of Common Stock equal to (i) the percentage of the
employee's base pay that such employee has elected to be withheld (not to exceed
10%), (ii) multiplied by such employee's base pay during the period of such
offering and (iii) divided by the lower of 85% of the closing market price of
the Common Stock on the applicable offering commencement date or 85% of the
closing market price of the Common Stock on the offering termination date.
Options held by a participant shall be exercisable only by that participant.

     No employee may be granted options to participate in the Stock Purchase
Plan if, as a result of such grant, such employee would (i) own stock or hold
options to purchase stock possessing 5% or more of the total combined voting
power or value of all classes of stock of INSpire or (ii) have rights to
purchase stock under all employee stock purchase plans of INSpire that accrue at
a rate in excess of $25,000 in fair market value for any calendar year.

1998 ANNUAL BONUS PLAN

     In January 1998, the Board of Directors adopted the 1998 Annual Bonus Plan,
which is administered by the Compensation Committee of the Board of Directors.
The Compensation Committee may designate earnout periods and, for each such
earnout period, the performance goal, participants, performance award for each
such participant and the award percentage of the performance award for each such
participant for various degrees of achievement of such performance goal. At the
end of each earnout period, based on a comparison of the actual performance of
INSpire over such earnout period to the applicable performance goal, each
participant shall receive a lump sum cash award within 75 days after the
issuance of INSpire's audited financial statements corresponding to such earnout
period. This lump sum cash payment shall be an amount equal to the performance
award designated for such participant for such earnout period multiplied by the
award percentage corresponding to the extent to which such performance goal was
achieved. No performance awards were paid for the years ended December 31, 1999
or December 31, 1998 under the 1998 Annual Bonus Plan.

MEETINGS OF THE BOARD OF DIRECTORS

     During the year ended December 31, 1999, the Board of Directors held 12
formal meetings. Each of the directors attended at least 75% of the meetings of
the Board of Directors and the committees of the Board of Directors on which
such director served.

COMMITTEES OF THE BOARD OF DIRECTORS

     INSpire has an Audit Committee and a Compensation Committee. INSpire has
not established a formal nominating committee. The Audit Committee currently is
comprised of Messrs. Bartel, Cox and Wynne and is responsible for reviewing the
independence, qualifications and activities of INSpire's independent certified
accountants and INSpire's financial policies, control procedures and





                                       9
<PAGE>   10

accounting staff. The Audit Committee recommends to the Board of Directors the
appointment of the independent certified public accountants and reviews and
approves INSpire's financial statements. The Audit Committee held no formal
meetings in 1999.

     The Compensation Committee currently is comprised of Messrs. Bartel, Berce,
Cox and Wynne and is responsible for establishing the compensation of INSpire's
directors, officers and other managerial personnel, including salaries, bonuses,
termination agreements and other executive officer benefits as well as certain
grants of stock options. The Compensation Committee held three formal meetings
in 1999.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

     In 1999, INSpire's Compensation Committee was comprised of Harry E. Bartel,
Daniel E. Berce, R. Earl Cox, III and Mitch S. Wynne, each of whom is an outside
independent director and none of whom is currently or was formerly an officer or
employee of INSpire or any of its affiliates.

DIRECTOR COMPENSATION

     Directors who are executive officers or employees of INSpire receive no
compensation as such for service as members of the Board of Directors or any
committees thereof. Directors who are not executive officers or employees of
INSpire receive an annual fee of $15,000, plus $1,000 per meeting of the Board
of Directors attended, $300 per committee meeting attended and reimbursement for
travel expenses to attend such meetings. Directors who serve as chairman of a
committee receive an additional annual fee of $3,000. The nonemployee directors
are also eligible to receive options to purchase Common Stock under the Director
Plan. See "-- Director Stock Option Plan."

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The following table sets forth, as of April 15, 2000, certain information
with respect to the beneficial ownership of the Common Stock by (i) each person
known by INSpire to own beneficially more than 5% of the outstanding shares of
Common Stock, (ii) each director and executive officer of INSpire as of such
date and (iii) all directors and executive officers as a group.

<TABLE>
<CAPTION>
                                                                         NUMBER OF SHARES    PERCENT OF SHARES
NAME OF BENEFICIAL OWNER                                                BENEFICIALLY OWNED   BENEFICIALLY OWNED
------------------------                                                ------------------   ------------------
<S>                                                                     <C>                  <C>
Millers Insurance ....................................................     4,606,875(1)           24.1%
     777 Main Street, Suite 1000
     Fort Worth, Texas 76102

Buena Venture Associates, L.P. .......................................     2,135,000(2)           11.2
     201 Main Street, Suite 3200
     Fort Worth, Texas 76102

Massachusetts Financial Services Company .............................     2,109,430(3)           11.0
     500 Boylston Street
     Boston, Massachusetts 02116

Eagle Asset Management, Inc. .........................................     1,068,174(4)            5.6
     880 Carillon Parkway
     St. Petersburg, Florida 33716

Warburg Pincus Asset Management, Inc. ................................       965,100(5)            5.1
     466 Lexington Avenue
     New York, New York 10017

F. George Dunham, III ................................................     1,232,757(6)            6.1

Jeffrey W. Robinson ..................................................       158,268(7)            *

James P. Strickland ..................................................        45,000(7)            *

John Aldredge ........................................................        10,000(7)            *

Ronald O. Lynn .......................................................       151,418(8)            *

Robert K. Agazzi .....................................................       168,045(9)            *

Harry E. Bartel ......................................................        12,375(10)           *

Daniel E. Berce ......................................................         4,125(11)           *

R. Earl Cox, III .....................................................        12,375(10)           *
</TABLE>






                                       10


<PAGE>   11


<TABLE>
<S>                                                                     <C>                  <C>
Mitch S. Wynne .......................................................        36,875(12)           *

All directors and executive officers as a group (10 individuals) .....     1,831,238(13)           9.6
</TABLE>

-------------------------

* Less than 1%.

(1)  Based on the Schedule l3G/A filed by Millers American Group, Inc., Trilogy
     Holdings, Inc. and Millers Insurance with the SEC on January 21, 2000.

(2)  Based on the Schedule 13D filed by Buena Venture Associates, L.P. with the
     SEC on October 28, 1999.

(3)  Based on the Schedule l3G/A filed by Massachusetts Financial Services
     Company with the SEC on February 18, 2000.

(4)  Based on the Schedule 13G filed by Eagle Asset Management, Inc. with the
     SEC on January 10, 2000.

(5)  Based on the Schedule l3G filed by Warburg Pincus Asset Management, Inc.
     with the SEC on January 13, 1999.

(6)  Includes 10,600 shares of Common Stock held in trusts, of which Mr. Dunham
     or a person controlled by Mr. Dunham is trustee, for the benefit of certain
     family members of Mr. Dunham, and 992,214 shares of Common Stock issuable
     upon exercise of options exercisable within 60 days of April 15, 2000.

(7)  Represents shares of Common Stock issuable upon exercise of options
     exercisable within 60 days of April 15, 2000.

(8)  Includes 148,418 shares of Common Stock issuable upon exercise of options
     exercisable within 60 days of April 15, 2000.

(9)  Includes 4,640 shares of Common Stock held in trusts, of which Mr. Agazzi
     or a person controlled by Mr. Agazzi is trustee, for the benefit of certain
     family members of Mr. Agazzi and 19,688 shares of Common Stock issuable
     upon exercise of options exercisable within 60 days of April 15, 2000.

(10) Includes 7,875 shares of Common Stock issuable upon exercise of options
     exercisable within 60 days of April 15, 2000. Does not include options
     covering additional shares expected to be granted following the 2000 Annual
     Meeting pursuant to the Director Plan.

(11) Represents shares of Common Stock issuable upon exercise of options
     exercisable within 60 days of April 15, 2000. Does not include options
     covering additional shares expected to be granted following the 2000 Annual
     Meeting pursuant to the Director Plan.

(12) Includes 24,000 shares of Common Stock held in trusts, of which Mr. Wynne
     or a person controlled by Mr. Wynne is trustee, for the benefit of certain
     family members of Mr. Wynne, and 7,875 shares of Common Stock issuable upon
     exercise of options exercisable within 60 days of April 15, 2000. Does not
     include options covering additional shares expected to be granted following
     the 2000 Annual Meeting pursuant to the Director Plan.

(13) Includes 1,401,338 shares of Common Stock issuable upon exercise of options
     exercisable within 60 days of April 15, 2000.

ITEM 13. CERTAIN RELATIONSHIPS AND CERTAIN TRANSACTIONS

MILLERS MASTER SERVICES AGREEMENT

     On December 30, 1999, INSpire entered into a consolidated Master Services
Agreement (the "Millers Master Services Agreement") with Millers American Group,
Inc. ("Millers American"), of which Millers Insurance is an indirect
wholly-owned subsidiary, and its subsidiaries (collectively, the "Millers
Group"), which supercedes the claims services contracts, policy services
contract, information services contract and other outsourcing contracts
described below. The Millers Master Services Agreement includes seven service
addendums, each applicable to a certain line or lines of business with specific
Millers Group entities, pursuant to which INSpire performs policy
administration, claims administration and/or information system services.
Generally, these service addendums provide for INSpire to be paid a percentage
of written premiums, subject to a monthly minimum, for policy




                                       11
<PAGE>   12

administration, a percentage of earned premium and a percentage of incurred
catastrophe losses for claims administration, a percentage of written premium,
subject to a monthly minimum, for information system services and an hourly fee
for the services of consultants and programmers. The Millers Master Services
Agreement provides that the aggregate fees due and payable to INSpire will be
reduced when such monthly fees reach certain levels based on a sliding scale of
discount rates set forth in the agreement. Each service addendum executed
pursuant to the Millers Master Services Agreement is effective through December
31, 2004, at which time it will be automatically extended unless earlier
terminated.

     Claims Services Contracts. Effective October 1, 1997, INSpire, Millers
Insurance and Millers Casualty entered into a claims administration services
agreement (the "Claims Services Agreement"), which provides that INSpire will
perform claims administration services for and on behalf of Millers Insurance
and Millers Casualty. Under the Claims Services Agreement, each of Millers
Insurance and Millers Casualty pays a fee per claim administered and a monthly
fee for claims open greater than 31 days, both of which are in an amount that
depends on the insurance policy line under which a claim is administered, and a
fee per hour for the services of consultants and programmers. The Claims
Services Agreement was amended in 1998 to provide that INSpire will perform
claims administration services to Millers Insurance with respect to three
general agents that Millers Insurance or Millers Casualty entered into agency
relationships with during 1998. For the year ended December 31, 1999, Millers
Insurance and Millers Casualty paid INSpire aggregate service fees of $8.8
million under the Claims Services Agreement. The Claims Services Agreement was
superceded by the Millers Master Services Agreement executed on December 30,
1999.

     INSpire and the Specialty Personal Lines Division of Millers Insurance are
parties to a service contract effective as of April 1, 1997 (the "Sun Coast
Services Contract") under which INSpire provides claims administration services
to Millers Insurance with respect to nonstandard auto policies issued by Sun
Coast General Insurance Agency ("Sun Coast"). During 1998, INSpire and Millers
Insurance agreed to amend the Sun Coast Services Contract to increase the rate
charged by INSpire for claims administration services. Millers Insurance paid
INSpire fees for services related to policies issued by Sun Coast of $2.2
million in 1999. The Sun Coast Services Contract was superceded by the Millers
Master Services Agreement executed on December 30, 1999.

     Policy Services Contract. Effective October 1, 1997, INSpire, Millers
Insurance and Millers Casualty entered into a policy administration services
agreement (the "Policy Services Agreement"), which provides that INSpire will
perform policy administration services for and on behalf of Millers Insurance
and Millers Casualty. In 1999, Millers Insurance and Millers Casualty paid
INSpire aggregate service fees of approximately $3.6 million under the Policy
Services Agreement. The Policy Services Agreement was superceded by the Millers
Master Services Agreement executed on December 30, 1999.

     Information Services Contract. Effective October 1, 1997, INSpire, Millers
Insurance and Millers Casualty entered into a second amended information
services contract (the "Second Amended Information Services Contract"), which
provides that INSpire will provide certain information technology ("IT")
services to Millers Insurance and Millers Casualty, including telecommunications
services, hardware services, application software services, system software
services, network services and system integration services. Under the Second
Amended Information Services Contract, each of Millers Insurance and Millers
Casualty pays monthly service fees based on the amount and type of services
provided, subject to a minimum monthly fee. In addition, each of Millers
Insurance and Millers Casualty pays a fee per hour for modifications by INSpire
to INSpire-supplied application software. For the year ended December 31, 1999,
Millers Insurance and Millers Casualty paid INSpire aggregate service fees of
$7.6 million under the Second Amended Information Services Contract. The Second
Amended Information Services Contract was superceded by the Millers Master
Services Agreement executed on December 30, 1999.

     Outsourcing Services Contracts with Millers Casualty. Effective May 1,
1997, INSpire and Millers Casualty entered into a policy administration services
agreement, which was amended effective October 1, 1997 (the "Policy
Administration Services Agreement"), pursuant to which INSpire provides policy
administration services for Millers Casualty's homeowners line of business in
Florida. For the year ended December 31, 1999, Millers Casualty paid INSpire
aggregate fees of approximately $1.0 million under the Policy Administration
Services Agreement. The Policy Administration Services Agreement was superceded
by the Millers Master Services Agreement executed on December 30, 1999.

     Effective June 1, 1997, INSpire and Millers Casualty entered into a claims
administration services agreement (the "Claims Administration Services
Agreement") pursuant to which INSpire provides claims administration services
for Millers Casualty's homeowners line of business in Florida. For the year
ended December 31, 1999, Millers Casualty paid INSpire aggregate fees of
approximately $1.1 million under the Claims Administration Services Agreement.
The Claims Administration Services Agreement was superceded by the Millers
Master Services Agreement executed on December 30, 1999.






                                       12
<PAGE>   13

ASSET AND EMPLOYEE TRANSFER AGREEMENT

     On September 1, 1999, INSpire entered into an asset and employee transfer
agreement (the "Phoenix Acquisition") with Millers American pursuant to which
INSpire agreed to acquire from Millers American for a purchase price of $3.5
million certain assets and employees used in the conduct of its policy and
claims administration with respect to its policies written by Phoenix Indemnity
Insurance Company. In conjunction with this transaction, which is expected to
close upon obtaining all necessary regulatory authority approvals, INSpire
entered into a Service Addendum to the Company's Master Services Agreement with
Millers American to provide certain policy and claims administration services
with respect to the Phoenix Indemnity book of business (the "Phoenix Services
Agreement") for a period of ten years beginning September l, 1999. For the year
ended December 31, 1999, Millers Insurance paid INSpire service fees of $4.1
million under the Phoenix Services Agreement.

BENEFITS ADMINISTRATION CONTRACT

     Effective July 1, 1997, INSpire and Millers Insurance entered into a
benefits administration contract (the "Benefits Administration Contract")
pursuant to which Millers Insurance provides INSpire with certain benefits
administration services, including payroll, and INSpire pays Millers Insurance a
service fee of $15,000 per month. The term of the Benefits Administration
Contract is three years. Effective January 1, 1998, INSpire and Millers
Insurance amended the Benefits Administration Contract to provide that INSpire
shall provide Millers Insurance, rather than Millers Insurance providing to
INSpire, the benefits administration services specified in the Benefits
Administration Contract, and Millers Insurance shall pay INSpire a service fee
of $15,000 per month. For the year ended December 31, 1999, Millers Insurance
paid INSpire aggregate service fees of $180,000 under the Benefits
Administration Contract, as amended.

CONSULTING AGREEMENT

     Effective March 15, 1998, INSpire entered into a consulting agreement with
Stuart H. Warrington pursuant to which Mr. Warrington retired as an executive
officer of INSpire. The consulting agreement provides that Mr. Warrington would
serve as a consultant to INSpire until May 30, 1999 for a consulting fee of
$2,000 per month and would be fully vested with respect to options for 139,731
shares of Common Stock granted to Mr. Warrington on March 12, 1997, which were
scheduled to vest in three equal annual installments commencing on the date of
grant. Mr. Warrington also retained the vested portion of options granted
effective August 22, 1997, covering 19,563 shares of Common Stock. The
consulting agreement also provides for deferred annual compensation of $40,000
to be paid each year for the 20-year period commencing January 1, 1999 and
ending December 31, 2018. The consulting agreement contains noncompetition and
confidentiality provisions. Mr. Warrington founded SDS and served in one or more
capacities as its President, Chief Executive Officer and Chairman of the Board
from its inception in 1981 until July 1997 and served from July 1997 until March
15, 1998 as an executive officer of INSpire.

MISCELLANEOUS

     INSpire leases its approximately 129,400 square foot corporate headquarters
in Fort Worth, Texas from IIS Realty, Ltd., a Texas limited partnership (the
"Partnership") pursuant to a lease agreement, dated as of November 13, 1998 (the
"Lease Agreement") and amendments to the Lease Agreement effective May 1, 1999
and November 1, 1999. F. George Dunham, III owns a 50% interest in the
Partnership and Messrs. Bartel, Cox and Wynne own in equal parts the remaining
50% interest. The term of the Lease Agreement is ten years, with one renewal
option of five years. The Lease Agreement, as amended, provides for monthly
rental payments of approximately $86,000 for the first five years, $97,000 for
the next five years, and $108,000 for the five-year renewal period, plus taxes,
insurance and maintenance costs. For the year ended December 31, 1999, INSpire
made rental payments of approximately $835,000 to the Partnership under the
Lease Agreement.

     INSpire leases its principal Sheboygan, Wisconsin facility pursuant to a
lease dated March 12, 1997 (the "Building Lease"). The building is owned by
Riverview Building, LLC ("Riverview"), which is controlled by Stuart H.
Warrington, a former executive officer of INSpire. The term of the Building
Lease ends February 28, 2007. Pursuant to the Building Lease, Riverview leases
to INSpire approximately 28,100 square feet of office space at a monthly rate of
approximately $21,000 for the first four years, $23,000 for the next five years,
and $25,000 for the last year. For the year ended December 31, 1999, INSpire
paid Riverview approximately $248,000 under the Building Lease.

     INSpire and Millers Insurance are parties to a sublease agreement, dated as
of January 1, 1997, pursuant to which Millers Insurance subleases to INSpire
certain furniture, equipment and other personal property that Millers Insurance
has leased from third





                                       13
<PAGE>   14

parties under various equipment leases for the benefit of INSpire. The sublease
payments by INSpire to Millers Insurance under the sublease equal the lease
payments by Millers Insurance to the lessors under the respective leases.

     Prior to INSpire's initial public offering, Millers Insurance, INSpire and
the other subsidiaries of Millers Insurance were parties to the Tax Allocation
Agreement. Under the Tax Allocation Agreement, Millers Insurance was required to
pay INSpire an amount equal to any decrease in the income taxes otherwise
payable by the Millers Insurance consolidated tax group attributable to any net
losses of INSpire. Conversely, the Tax Allocation Agreement required INSpire to
pay to Millers Insurance the amount of any income taxes that INSpire would have
paid if it had not been included in the Millers Insurance consolidated tax
group. Effective August 23, 1997, the Tax Allocation Agreement was terminated as
it related to INSpire due to INSpire leaving the Millers Insurance consolidated
tax group at the time of INSpire's initial public offering. The agreement to
terminate the Tax Allocation Agreement provides that INSpire will indemnify the
other members of the Millers Insurance consolidated tax group for any of the
group's income taxes and related expenses attributable to INSpire and Millers
Insurance will indemnify INSpire for any income taxes and related expenses
attributable to any members of the consolidated tax group other than INSpire.

                                   SIGNATURES

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


                                             INSPIRE INSURANCE SOLUTIONS, INC.



                                             By: /s/ F. GEORGE DUNHAM, III
                                                -------------------------------
                                             Name:  F. George Dunham, III
                                             Title: Chief Executive Officer
                                                    and Director







                                       14