exhibit101maisoninsuranc






                                                                                                                                                                                                                                                                                                                                                                                                      OFFICE OF INSURANCE REGULATION                                                                                    DAVID ALTMAIER  COMMISSIONER                IN THE MATTER OF:                                              CASE NO.:  246427-19-CO                       Application for the Direct Acquisition   of MAISON INSURANCE COMPANY   by FEDNAT HOLDING COMPANY                                     /                                              CONSENT ORDER          THIS  CAUSE  came  on for  consideration upon  the  filing by FEDNAT  HOLDING   COMPANY   (“APPLICANT”)  with  the FLORIDA OFFICE OF  INSURANCE REGULATION   (“OFFICE”) of an application for the approval of the direct acquisition of 100% of the issued and   outstanding voting securities of MAISON INSURANCE COMPANY (“MAISON”), pursuant to   Section 628.461, Florida Statutes (“Application”).   Following a complete review of the entire   record, and upon consideration thereof, and being otherwise fully advised in the premises, the   OFFICE hereby finds as follows:         1.    The OFFICE has jurisdiction over the subject matter and the parties herein.         2.    APPLICANT has applied for and, subject to the present and continuing satisfaction   of the requirements, terms, and conditions established herein, has satisfactorily met all conditions   precedent to the granting of approval by the OFFICE of the proposed acquisition of 100% of the   issued and outstanding shares of MAISON’s stock.                                     Page 1 of 13    





 






      3.    APPLICANT is a Florida holding company that is publicly traded on the National   Association  of Securities  Dealers Automated Quotations system (“Nasdaq”) under the symbol   “FNHC”, with no 10% or greater shareholders.           4.    MAISON is a Louisiana-domiciled and licensed property and casualty insurer that   is authorized to transact property and casualty insurance in Florida through a subsisting Certificate   of Authority issued by the OFFICE.  MAISON has agreed to be treated as commercially domiciled   in Florida and, as such, is subject to filings required by Section 628.461, Florida Statutes.           5.    MAISON is owned 100% by 1347 PROPERTY INSURANCE HOLDINGS, INC.   (“1347 PROPERTY”), a Delaware holding company that is publicly traded on Nasdaq under the   symbol “PIH”. 1347 PROPERTY is beneficially owned 45% by Fundamental Global Investors,   LLC, a North Carolina limited liability company; 20% by Kingsway Financial Services, Inc., a   Delaware corporation; and 10% by Gordon G. Pratt; with no other 10% or greater shareholders.         6.    The Application represents that on or about February 25, 2019, APPLICANT and   MAISON  entered  into  an “Equity Purchase  Agreement”  (“Equity Agreement”) whereby   APPLICANT agreed to purchase all issued and outstanding shares of MAISON’s stock for a total   cash consideration of $25,500,000 United States Dollars (“USD”) and a stock consideration as   determined in the Equity Agreement.         7.    APPLICANT and 1347 PROPERTY have   submitted, as Exhibit C to the Equity   Agreement referenced in paragraph 6 above, a draft “Standstill Agreement” that APPLICANT and   1347  PROPERTY  have agreed to execute  after  the  closing  of  the  transaction  described  in   paragraph 6 above.  Within 10 days after the closing of the transaction, APPLICANT and 1347   PROPERTY agree to submit an executed copy of the Standstill Agreement to the OFFICE.                                         Page 2 of 13                                           





 






      8.    If,  as  a  result  of  the transaction  contemplated  in  this  Consent  Order,  1347   PROPERTY acquires 10% or more of APPLICANT, 1347 PROPERTY acknowledges that it must   comply with the requirements of Section 628.461, Florida Statutes.         9.    APPLICANT has  made  material  representations  that, except  as  disclosed in  the   Application, none of its officers or directors, and none of the post-acquisition officers and directors   of MAISON, have been found guilty of, or have pleaded guilty or nolo contendere to, a felony or   misdemeanor,  other  than  a  minor  traffic  violation,  without  regard  to  whether  a  judgment  or   conviction was entered by the court.          10.   APPLICANT has further represented that it has submitted complete background   information on all the individuals referenced in paragraph 9 above.  If said information has not   been provided to the OFFICE, or if the sources utilized by the OFFICE in its investigation process   reveal that the representations made in paragraph 9 above are inaccurate, any such individual shall   be removed as officer or director of said company within 30 days of receipt of notification from   the OFFICE and replaced with a person or persons acceptable to the OFFICE.          11.   If, upon receipt of notification from the OFFICE pursuant to paragraph 10 above,   APPLICANT does not timely take the required corrective action, APPLICANT agrees that such   failure to act would constitute an immediate serious danger to the public and the OFFICE may   immediately suspend, revoke, or take other administrative action as it deems appropriate upon the   Certificate  of  Authority  of  MAISON  without  further  proceedings,  pursuant  to  Sections   120.569(2)(n) and 120.60(6), Florida Statutes.         12.   APPLICANT represents that, except as disclosed in the Application, there are no   present plans or proposals to make any substantive changes to MAISON, including liquidating it,   selling any of its assets (except for transactions such as investment portfolio transactions in the                                      Page 3 of 13                                           





 






ordinary course of business), merging or consolidating it with any person or persons, or making   any other major change in its business operations.         13.   APPLICANT acknowledges and represents that if the transactions contemplated in   the  Application  are  consummated, MAISON  will  be  an  affiliated  person  of  FedNat Insurance   Company and Monarch National Insurance Company, pursuant to Section 624.10(2)(e), Florida   Statutes.           14.   APPLICANT, MAISON, and 1347 PROPERTY shall ensure that any agreement   MAISON  is  party  to  or  governed  by,  with  respect  to  any  and  all  pro  rata  and  excess  of  loss   reinsurance coverage, shall provide for terms and pricing to be procured at open market terms.    APPLICANT, MAISON, or 1347 PROPERTY shall conduct sufficient due diligence, through a   broker or otherwise, and shall solicit legitimate written quotes from potential third-party reinsurers   through a firm order prior to entering into a quota share or excess of loss agreement.         15.   MAISON shall not enter into any reinsurance or brokerage agreement, whether or   not affiliated, that requires approval from the reinsurer or broker regarding any potential sale of   MAISON.         16.   Until such time as MAISON is no longer subject to the commercially domiciled   conditions  stipulated  in  Consent  Order  No.: 203693-17-CO, and  pursuant  to  Sections   628.461(3)(f)-(g), Florida Statutes, APPLICANT shall file or cause to be filed with the OFFICE   the  Enterprise  Risk  Report  required  by  Section  628.801(2),  Florida  Statutes,  and  any  and  all   additional information necessary to evaluate the enterprise risk of MAISON.         17.   Until such time as MAISON is no longer subject to the commercially domiciled   conditions stipulated in Consent Order No.: 203693-17-CO, and pursuant to Section 624.10(3),   Florida  Statutes,  APPLICANT  is  a  controlling  entity  and,  as  such,  shall  comply  with  Section                                      Page 4 of 13                                           





 






628.461(12)(b), Florida Statutes, should APPLICANT choose to divest its controlling interest in   MAISON.         18.   All  parties  to  this  Consent  Order  agree  that  this  Consent  Order  regarding  the   acquisition  of  MAISON  shall  be  deemed  null  and  void  if  the  transaction  contemplated  in  the   Application does not close within 180 days of execution of this Consent Order.          19.   Within 10 business days after the transactions contemplated in the Application are   completed, APPLICANT shall submit, or cause to be submitted, to the OFFICE all documents   evidencing completion of said transactions. Further, APPLICANT or MAISON shall notify the   OFFICE within 3 days of determining that the transaction will not occur.         20.   Any material changes to the information submitted in the Application filing shall   be  reported  to  the  OFFICE  for  its  review  prior  to  the  closing.   APPLICANT  and  MAISON   acknowledge that if the  OFFICE determines  that any of these reported  changes  would have a   material negative impact to the financial condition or operation of APPLICANT or MAISON, the   OFFICE  may  rescind  its  approval  as  granted  in  this  Consent  Order  by  written  notice  to   APPLICANT.         21.   The Application represents that APPLICANT, 1347 PROPERTY, and MAISON   requested approval of the  transactions  contemplated  in  this  Application from MAISON’s   domiciliary regulator, the Louisiana Department of Insurance, which issued its approval by order   dated August 7, 2019.         22.   APPLICANT, 1347 PROPERTY, and MAISON acknowledge that any repayment   of  surplus  notes issued  by  MAISON  are  subject  to approval by  the Louisiana Department  of   Insurance and shall not be construed as being approved by issuance of this Consent Order.                                      Page 5 of 13                                           





 






      23.   Any  prior  orders,  consent  orders,  or  corrective  action  plans  that  MAISON  has   entered into with the OFFICE prior to the execution of this Consent Order shall apply and remain   in full force and effect for MAISON, except where provisions of such orders, consent orders, or   corrective action plans have expired; have been superseded by subsequent orders, consent orders,   or corrective action plans; or are inconsistent with this Consent Order.         24.   MAISON shall, no later than 15 days after the  month in  which all transactions   contemplated in the Application are completed, file an update to its Holding Company Registration   Statement,  as  required  by  Section  628.801,  Florida  Statutes,  and  Rule  69O-143.046,  Florida   Administrative Code.         25.   APPLICANT,  1347  PROPERTY,  and  MAISON  affirm  that  all  explanations,   representations,  statements,  and  documents  provided  to  the  OFFICE  in  connection  with  this   Application,  including  all  attachments  and  supplements  thereto,  are  true  and  correct  and  fully   describe all  transactions,  agreements,  ownership  structures,  understandings,  and  control  with   regard to the acquisition and future operations of MAISON. APPLICANT, 1347 PROPERTY, and   MAISON  further  agree  and  affirm  that  said  explanations,  representations,  statements,  and   documents, including all attachments and supplements thereto, are material to the issuance of this   Consent Order and have been relied upon by the OFFICE in its determination to enter into this   Consent Order.         26.   APPLICANT  or  MAISON  shall  report  to  the  OFFICE,  Property  &  Casualty   Financial Oversight, any time that one or more of them is named as a party defendant in a class   action lawsuit within 15 days after the class is certified.  APPLICANT or MAISON shall include   a copy of the complaint at the time the class action lawsuit is reported to the OFFICE.                                      Page 6 of 13                                           





 






      27.   MAISON  shall  maintain  an  information  security  program  for  the  security  and   protection  of  confidential  and  proprietary  information  under  its  control  that  complies  with  all   applicable  laws  and  regulations  regarding  information  security.   MAISON  agrees  that  it  shall   continually  monitor  and  enhance  its  information  security  programs  in  order  to  mitigate  data   security breaches. MAISON further agrees that it shall notify the OFFICE within 5 business days   of identifying a data breach.          28.   Executive Order 13224 prohibits any transactions by U.S. persons involving the   blocked assets and interests of terrorists and terrorist support organizations.  APPLICANT and   MAISON  shall  maintain  and  adhere  to  procedures  necessary  to  detect  and  prevent  prohibited   transactions  with  those  individuals  and  entities,  which  have  been  identified  at  the  Treasury   Department’s Office of Foreign Assets Control website, http://www.treas.gov/ofac.         29.   Within 60 days of the execution of this Consent Order, APPLICANT shall submit,   or  cause  to  be  submitted,  to  the  OFFICE  a  certification  evidencing  compliance  with  all  the   requirements  of  this  Consent  Order.  Any  exceptions  shall  be  so  noted  and  contained  in  the   certification.  Exceptions noted in the certification shall also include a timeline defining when the   outstanding  requirements  of  the  Consent  Order  will  be  completed.   Said  certification  shall  be   submitted to the OFFICE via electronic mail and directed to the attention of the Assistant General   Counsel representing the OFFICE in this matter and as named in this Consent Order.         30.   Any deadlines, reporting requirements, other provisions, or requirements set forth   in this Consent Order may be altered or terminated by written approval of the OFFICE.  Such   written approval by the OFFICE is subject to statutory or administrative regulation limitations.         31.   APPLICANT, 1347 PROPERTY, and MAISON expressly waive a hearing in this   matter, the making of findings of fact and conclusions of law by the OFFICE, and all further and                                      Page 7 of 13                                           





 






other  proceedings  herein  to  which  they  may  be  entitled  by  law  or  rules  of  the  OFFICE.    APPLICANT, 1347 PROPERTY, and MAISON also hereby knowingly and voluntarily waive all   rights to challenge or to contest this Consent Order in any forum available to them, now or in the   future, including the right to any administrative proceeding, state or federal court action, or any   appeal.         32.   APPLICANT,  1347 PROPERTY, and MAISON   affirm that all requirements set   forth herein are material to the issuance of this Consent Order.         33.   APPLICANT, 1347 PROPERTY, and MAISON agree that, upon execution of this   Consent Order, failure to adhere to one or more of the terms and conditions contained herein may   result,  without  further  proceedings,  in  the  OFFICE  suspending,  revoking,  or  taking  other   administrative action as it deems appropriate upon the Certificate of Authority of MAISON in this   state in accordance with Sections 120.569(2)(n) and 120.60(6), Florida Statutes.         34.   Each party to this action shall bear its own costs and fees.         35.   The parties agree that this Consent Order shall be deemed to be executed when the   OFFICE  has  signed  and  docketed  a  copy  of  this  Consent  Order  bearing  the  signatures  of  the   authorized representatives of APPLICANT, 1347 PROPERTY, and MAISON, notwithstanding   the  fact  that  the  copy  may  have  been  transmitted  to  the  OFFICE  electronically.  Further,   APPLICANT,  1347  PROPERTY,  and  MAISON agree  that  the  signatures  of  their  authorized   representatives as affixed to this Consent Order shall be under the seal of a Notary Public.                                      Page 8 of 13                                           





 






      WHEREFORE, subject to the terms and conditions set forth above, the Application for the   direct acquisition  of 100% of  the  issued  and  outstanding  voting  securities of MAISON   INSURANCE COMPANY     by FEDNAT HOLDING COMPANY,      pursuant to Section 628.461,   Florida Statutes, is APPROVED.         FURTHER, all terms and conditions contained herein are hereby ORDERED.         DONE and ORDERED this 7th day of August, 2019.                                                     /s/ David Altmaier                                                        David Altmaier, Commissioner                                            Office of Insurance Regulation                                      Page 9 of 13                                           





 






      By execution hereof, FEDNAT HOLDING COMPANY consents to entry of this Consent  Order, agrees without reservation to all of the above terms and conditions, and shall be bound by  all provisions herein.  The undersigned represents that he or she has the authority to bind FEDNAT  HOLDING COMPANY to the terms and conditions of this Consent Order.                                         FEDNAT HOLDING COMPANY                                                                            By: /s/ Michael Braun                                                             Print Name: Michael Braun                                                         Title:  CEO                                   [Corporate Seal]                    Date:  8/7/19                                    STATE OF FLORIDA    COUNTY OF BROWARD        The foregoing instrument was acknowledged before me this 7th day of August, 2019     by Michael Braun                 as             CEO                                    (name of person)                                                 (type of authority, e.g. officer, trustee, attorney in fact)      for FedNat Holding Company            (Company Name)                                       /s/ James Gordon Jennings III                                                   (Signature of the Notary)                                      James Gordon Jennings III                                                       (Print, Type or Stamp Commissioned Name of Notary)        Personally Known            OR Produced Identification      Type of Identification Produced                            My Commission Expires    12/16/2021                                                          Page 10 of 13                                           





 






      By  execution  hereof, 1347  PROPERTY  INSURANCE  HOLDINGS,  INC., consents  to  entry of this Consent Order, agrees without reservation to all of the above terms and conditions,  and shall be bound by all provisions herein.  The undersigned represents that he or she has the  authority to bind 1347 PROPERTY INSURANCE HOLDINGS, INC., to the terms and conditions  of this Consent Order.                                                                          1347 PROPERTY INSURANCE HOLDINGS, INC.                                                                            By: /s/ John S. Hill                                                               Print Name: John S. Hill                                                          Title: VP, CFO and Secretary                  [Corporate Seal]                    Date: August 7, 2019                             STATE OF FLORIDA    COUNTY OF HILLSBOROUGH        The foregoing instrument was acknowledged before me this 7th day of August, 2019     by John S. Hill                  as             CFO                                    (name of person)                                              (type of authority, e.g. officer, trustee, attorney in fact)      for 1347 Property Ins. Holding                          (Company Name)                                       /s/ Carla D. Barber                                                             (Signature of the Notary)                                      Carla D. Barber                                                                 (Print, Type or Stamp Commissioned Name of Notary)        Personally Known            OR Produced Identification      Type of Identification Produced                            My Commission Expires May 16, 2023                                                                                     Page 11 of 13                                           





 






      By  execution  hereof, MAISON INSURANCE  COMPANY  consents  to  entry  of  this  Consent Order, agrees without reservation to all of the above terms and conditions, and shall be  bound by all provisions herein.  The undersigned represents that he or she has the authority to bind  MAISON INSURANCE COMPANY to the terms and conditions of this Consent Order.                                        MAISON INSURANCE COMPANY                                                                            By: /s/ Douglas N. Raucy                                                           Print Name:  Douglas N. Raucy                                                     Title: President                              [Corporate Seal]                    Date: 8/7/19                                     STATE OF FLORIDA    COUNTY OF HILLSBOROUGH        The foregoing instrument was acknowledged before me this 7th day of August, 2019     by Douglas N. Raucy              as             CEO and President                      (name of person)                                              (type of authority, e.g. officer, trustee, attorney in fact)      for Maison Insurance                                    (Company Name)                                       /s/ Carla D. Barber                                                             (Signature of the Notary)                                      Carla D. Barber                                                                 (Print, Type or Stamp Commissioned Name of Notary)        Personally Known            OR Produced Identification      Type of Identification Produced                            My Commission Expires May 16, 2023                                                                                     Page 12 of 13                                           





 






COPIES FURNISHED TO:     DOUGLAS RAUCY, PRESIDENT                  RYAN SHAFFER, FINANCIAL  Maison Insurance Company                  SPECIALIST  1511 N. Westshore Boulevard               Property & Casualty Financial Oversight –  Tampa, Florida 33607                      Company Admissions  Telephone: (813) 579-6210                 Florida Office of Insurance Regulation  Email: draucy@maisonins.com               200 East Gaines Street                                            Tallahassee, Florida 32399  MICHAEL H. BRAUN, PRESIDENT                 FedNat Holding Company                    MICHAEL KLINER, ASSISTANT  14050 NW 14 Street, Suite 180             GENERAL COUNSEL  Sunrise, Florida 33323                    Florida Office of Insurance Regulation  Telephone: (954) 308-1322                 200 East Gaines Street  Email: mbraun@fednat.com                  Tallahassee, Florida 32399                                            Telephone: (850) 413-4108  SANDY FAY, ATTORNEY                       Email: michael.kliner@floir.com  Colodny Fass, P.L.L.C.                      1401 NW 136th Avenue, Suite 200             Sunrise, Florida 33323                      Telephone: (954) 492-4010                   Email: sfay@colodnyfass.com                                                             ALISON STERETT, FINANCIAL                    ADMINISTRATOR  Property & Casualty Financial Oversight -  Company Admissions   Florida Office of Insurance Regulation  200 East Gaines Street  Tallahassee, Florida 32399     COREY HUBBARD, FINANCIAL  EXAMINER/ANALYST SUPERVISOR  Property & Casualty Financial Oversight -  Company Admissions   Florida Office of Insurance Regulation  200 East Gaines Street  Tallahassee, Florida 32399                                                       Page 13 of 13