| Delaware                                                       | 65-0231984                           |
|----------------------------------------------------------------|--------------------------------------|
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |

|   | Large accelerated filer o                                                  | Accelerated filer  x |
|--------|----------------------------------------------------------------------------|--------------------------------|
|   | Non-accelerated filer o (Do not check if a smaller reporting company) | Smaller reporting company o    |

----

| Item 1.    | Financial Statements (Unaudited)                                                                                                             |   |
|------------|----------------------------------------------------------------------------------------------------------------------------------------------|--------|
|       |                                                                                                                                         |   |
|       | Report of Independent Registered Public Accounting Firm                                                                                      | 4      |
|       |                                                                                                                                         |   |
|       | Condensed Consolidated Balance Sheets as of September 30, 2010 and December 31, 2009                                                         | 5      |
|       |                                                                                                                                         |   |
|       | Condensed Consolidated Statements of Operations for the Nine-Month and Three-Month Periods Ended September 30, 2010 and 2009                 | 6      |
|       |                                                                                                                                         |   |
|       | Condensed Consolidated Statements of Stockholders’ Equity for the Nine-Month and Three-Month Periods Ended September 30, 2010 and 2009 | 7      |
|       |                                                                                                                                         |   |
|       | Condensed Consolidated Statements of Cash Flows for the Nine-Month Periods Ended September 30, 2010 and 2009                                 | 8      |
|       |                                                                                                                                         |   |
|       | Notes to Condensed Consolidated Financial Statements                                                                                         | 9      |
|       |                                                                                                                                         |   |
| Item 2.    | Management’s Discussion and Analysis of Financial Condition and Results of Operations                                                  | 33     |
|       |                                                                                                                                         |   |
| Item 3.    | Quantitative and Qualitative Disclosures about Market Risk                                                                                   | 53     |
|       |                                                                                                                                         |   |
| Item 4.    | Controls and Procedures                                                                                                                      | 55     |
|       |                                                                                                                                         |   |
| PART II:   | OTHER INFORMATION                                                                                                                            |   |
|       |                                                                                                                                         |   |
| Item 1.    | Legal Proceedings                                                                                                                            | 55     |
|       |                                                                                                                                         |   |
| Item 1A.   | Risk Factors                                                                                                                                 | 56     |
|       |                                                                                                                                         |   |
| Item 2.    | Unregistered Sales of Equity Securities and Use of Proceeds                                                                                  | 56     |
|       |                                                                                                                                         |   |
| Item 3.    | Defaults Upon Senior Securities                                                                                                              | 56     |
|       |                                                                                                                                         |   |
| Item 4.    | (Removed and Reserved)                                                                                                                       | 56     |
|       |                                                                                                                                         |   |
| Item 5.    | Other Information                                                                                                                            | 56     |
|       |                                                                                                                                         |   |
| Item 6.    | Exhibits                                                                                                                                     | 56     |
|       |                                                                                                                                         |   |
| Signatures |                                                                                                                                         | 57     |

----

----

| ASSETS                                                                                                 |   | (Unaudited)September 30,2010 |        |   | December 31,2009 |   |
|--------------------------------------------------------------------------------------------------------|--------|------------------------------|-------------|--------|------------------|--------|
| Cash and cash equivalents                                                                              |   | $                            | 294,972,027 |   |             | $      | 192,924,291 |   |
| Investments:                                                                                           |   |                         |        |   |             |   |   |   |
|   Trading securities, at fair value                                                          |   |                         | 104,356,012 |   |             |   | - |   |
|   Available-for-sale securities, at fair value                                               |   |                         | -           |   |             |   | 114,797,010 |   |
| Real estate, net                                                                                       |   |                         | 4,100,539   |   |             |   | 3,289,893 |   |
| Prepaid reinsurance premiums                                                                           |   |                         | 228,363,400 |   |             |   | 200,294,241 |   |
| Reinsurance recoverables                                                                               |   |                         | 67,336,233  |   |             |   | 91,816,433 |   |
| Premiums receivable, net                                                                               |   |                         | 48,516,258  |   |             |   | 37,363,110 |   |
| Receivable from securities                                                                             |   |                         | 13,061,387  |   |             |   | 6,259,973 |   |
| Other receivables                                                                                      |   |                         | 2,805,825   |   |             |   | 5,068,367 |   |
| Income taxes recoverable                                                                               |   |                         | -           |   |             |   | 3,211,874 |   |
| Property and equipment, net                                                                            |   |                         | 1,280,798   |   |             |   | 1,245,858 |   |
| Deferred policy acquisition costs, net                                                                 |   |                         | 12,852,849  |   |             |   | 9,464,624 |   |
| Deferred income taxes                                                                                  |   |                         | 10,466,570  |   |             |   | 11,894,289 |   |
| Other assets                                                                                           |   |                         | 900,239     |   |             |   | 617,337 |   |
|           Total assets                               |   | $                            | 789,012,137 |   |             | $      | 678,247,300 |   |
|                                                                                                   |   |                         |        |   |             |   |   |   |
| LIABILITIES AND STOCKHOLDERS' EQUITY                                                                   |   |                         |        |   |             |   |   |   |
| LIABILITIES:                                                                                           |   |                         |        |   |             |   |   |   |
| Unpaid losses and loss adjustment expenses                                                             |   | $                            | 136,857,850 |   |             | $      | 127,197,753 |   |
| Unearned premiums                                                                                      |   |                         | 346,304,445 |   |             |   | 278,370,544 |   |
| Advance premium                                                                                        |   |                         | 20,957,517  |   |             |   | 17,078,558 |   |
| Accounts payable                                                                                       |   |                         | 3,496,095   |   |             |   | 3,172,626 |   |
| Bank overdraft                                                                                         |   |                         | 24,778,730  |   |             |   | 20,297,061 |   |
| Reinsurance payable, net                                                                               |   |                         | 67,932,331  |   |             |   | 73,104,595 |   |
| Income taxes payable                                                                                   |   |                         | 3,464,260   |   |             |   | 368,968 |   |
| Payable for securities                                                                                 |   |                         | 379,473     |   |             |   | - |   |
| Other accrued expenses                                                                                 |   |                         | 22,671,787  |   |             |   | 20,750,385 |   |
| Long-term debt                                                                                         |   |                         | 23,529,412  |   |             |   | 24,632,353 |   |
|           Total liabilities                          |   |                         | 650,371,900 |   |             |   | 564,972,843 |   |
|                                                                                                   |   |                         |        |   |             |   |   |   |
| STOCKHOLDERS' EQUITY:                                                                                  |   |                         |        |   |             |   |   |   |
| Cumulative convertible preferred stock, $.01 par value                                                 |   |                         | 1,077       |   |             |   | 1,087 |   |
|      Authorized shares - 1,000,000                                            |   |                         |        |   |             |   |   |   |
|      Issued shares - 107,690 and 108,640                                      |   |                         |        |   |             |   |   |   |
|      Outstanding shares - 107,690 and 108,640                                 |   |                         |        |   |             |   |   |   |
|      Minimum liquidation preference - $287,240 and $288,190                   |   |                         |        |   |             |   |   |   |
| Common stock, $.01 par value                                                                           |   |                         | 408,771     |   |             |   | 402,146 |   |
|      Authorized shares - 55,000,000                                           |   |                         |        |   |             |   |   |   |
|      Issued shares - 40,877,088 and 40,214,884                                |   |                         |        |   |             |   |   |   |
|      Outstanding shares - 39,166,033 and 37,774,765                           |   |                         |        |   |             |   |   |   |
|      Treasury shares, at cost - 1,711,054 and 1,809,119 shares                |   |                         | (7,389,414  | )      |             |   | (7,948,606 | ) |
| Common stock held in trust, at cost - 0 and 631,000 shares                                             |   |                         | -           |   |             |   | (511,110 | ) |
| Additional paid-in capital                                                                             |   |                         | 37,568,052  |   |             |   | 36,666,914 |   |
| Accumulated other comprehensive income, net of taxes                                                   |   |                         | 5,437       |   |             |   | 563,654 |   |
| Retained earnings                                                                                      |   |                         | 108,046,314 |   |             |   | 84,100,372 |   |
|           Total stockholders' equity                 |   |                         | 138,640,237 |   |             |   | 113,274,457 |   |
|           Total liabilities and stockholders' equity |   | $                            | 789,012,137 |   |             | $      | 678,247,300 |   |
|                                                                                                   |   |                         |        |   |             |   |   |   |

----

|                                                                                 |   |                       |         |   |                       |   |         |   |   |   |         |   |
|--------------------------------------------------------------------------------------|--------|----------------------------|--------------|--------|----------------------------|--------|--------------|--------|--------|--------|--------------|--------|
|                                                                                 |   | For the Nine               |         |   | For the Three              |   |
|                                                                                 |   | Months Ended September 30, |         |   | Months Ended September 30, |   |
|                                                                                 |   | 2010                       |         |   | 2009                       |   |         | 2010   |   |   | 2009         |   |
| PREMIUMS EARNED AND OTHER REVENUES                                                   |   |                       |         |   |                       |   |         |   |   |   |         |   |
|      Direct premiums written                                |   | $                          | 520,781,570  |   |                       | $      | 436,610,689  |   |   | $      | 152,662,238  |   |   | $ | 134,626,400 |   |
|      Ceded premiums written                                 |   |                       | (357,411,323 | )      |                       |   | (328,518,186 | )      |   |   | (108,539,124 | )      |   |   | (104,152,022 | ) |
|         Net premiums written                 |   |                       | 163,370,247  |   |                       |   | 108,092,503  |   |   |   | 44,123,114   |   |   |   | 30,474,378 |   |
|      (Increase) decrease in net unearned premium            |   |                       | (39,864,743  | )      |                       |   | (200,377     | )      |   |   | 4,708,040    |   |   |   | 2,283,358 |   |
|      Premiums earned, net                                   |   |                       | 123,505,504  |   |                       |   | 107,892,126  |   |   |   | 48,831,154   |   |   |   | 32,757,736 |   |
|      Net investment income                                  |   |                       | 376,575      |   |                       |   | 1,385,007    |   |   |   | 66,004       |   |   |   | 586,525 |   |
|      Realized gains on investments                          |   |                       | 11,993,359   |   |                       |   | 13,588,681   |   |   |   | 6,249,015    |   |   |   | 12,136,072 |   |
|      Unrealized gains on investments                        |   |                       | 8,597,233    |   |                       |   | -            |   |   |   | 8,597,233    |   |   |   | - |   |
|      Foreign currency transaction gains                     |   |                       | 800,990      |   |                       |   | 6,156,945    |   |   |   | (8,060       | )      |   |   | 6,084,629 |   |
|      Commission revenue                                     |   |                       | 25,469,318   |   |                       |   | 23,413,086   |   |   |   | 7,948,019    |   |   |   | 8,105,468 |   |
|      Other revenue                                          |   |                       | 3,488,748    |   |                       |   | 4,214,347    |   |   |   | 1,468,416    |   |   |   | 1,312,617 |   |
|                                                                                 |   |                       |         |   |                       |   |         |   |   |   |         |   |   |   |   |   |
| Total premiums earned and other revenues                                             |   |                       | 174,231,727  |   |                       |   | 156,650,192  |   |   |   | 73,151,781   |   |   |   | 60,983,047 |   |
|                                                                                 |   |                       |         |   |                       |   |         |   |   |   |         |   |   |   |   |   |
| OPERATING COSTS AND EXPENSES                                                         |   |                       |         |   |                       |   |         |   |   |   |         |   |   |   |   |   |
|      Losses and loss adjustment expenses                    |   |                       | 77,856,730   |   |                       |   | 68,695,552   |   |   |   | 29,370,125   |   |   |   | 23,768,729 |   |
|      General and administrative expenses                    |   |                       | 43,820,836   |   |                       |   | 36,789,168   |   |   |   | 20,242,856   |   |   |   | 18,674,744 |   |
|                                                                                 |   |                       |         |   |                       |   |         |   |   |   |         |   |   |   |   |   |
|         Total operating costs and expenses   |   |                       | 121,677,566  |   |                       |   | 105,484,720  |   |   |   | 49,612,981   |   |   |   | 42,443,473 |   |
|                                                                                 |   |                       |         |   |                       |   |         |   |   |   |         |   |   |   |   |   |
| INCOME BEFORE INCOME TAXES                                                           |   |                       | 52,554,161   |   |                       |   | 51,165,472   |   |   |   | 23,538,800   |   |   |   | 18,539,574 |   |
|                                                                                 |   |                       |         |   |                       |   |         |   |   |   |         |   |   |   |   |   |
|      Income taxes, current                                  |   |                       | 18,980,805   |   |                       |   | 16,127,712   |   |   |   | 7,324,661    |   |   |   | 7,178,058 |   |
|      Income taxes, deferred                                 |   |                       | 1,417,694    |   |                       |   | 3,446,852    |   |   |   | 1,769,454    |   |   |   | (153,004 | ) |
|         Income taxes, net                    |   |                       | 20,398,499   |   |                       |   | 19,574,564   |   |   |   | 9,094,115    |   |   |   | 7,025,054 |   |
|                                                                                 |   |                       |         |   |                       |   |         |   |   |   |         |   |   |   |   |   |
| NET INCOME                                                                           |   | $                          | 32,155,662   |   |                       | $      | 31,590,908   |   |   | $      | 14,444,685   |   |   | $ | 11,514,520 |   |
|                                                                                 |   |                       |         |   |                       |   |         |   |   |   |         |   |   |   |   |   |
| Basic net income per common share                                                    |   | $                          | 0.82         |   |                       | $      | 0.84         |   |   | $      | 0.37         |   |   | $ | 0.31 |   |
| Weighted average of common shares                                                    |   |                       |         |   |                       |   |         |   |   |   |         |   |   |   |   |   |
|      outstanding - Basic                                    |   |                       | 39,075,571   |   |                       |   | 37,601,409   |   |   |   | 39,167,241   |   |   |   | 37,625,013 |   |
|                                                                                 |   |                       |         |   |                       |   |         |   |   |   |         |   |   |   |   |   |
| Fully diluted net income per share                                                   |   | $                          | 0.80         |   |                       | $      | 0.78         |   |   | $      | 0.36         |   |   | $ | 0.28 |   |
| Weighted average of common shares                                                    |   |                       |         |   |                       |   |         |   |   |   |         |   |   |   |   |   |
|      outstanding - Diluted                                  |   |                       | 40,386,445   |   |                       |   | 40,374,409   |   |   |   | 40,276,276   |   |   |   | 40,671,509 |   |
|                                                                                 |   |                       |         |   |                       |   |         |   |   |   |         |   |   |   |   |   |
| Cash dividend declared per common share                                              |   | $                          | 0.22         |   |                       | $      | 0.34         |   |   | $      | -            |   |   | $ | - |   |
|                                                                                 |   |                       |         |   |                       |   |         |   |   |   |         |   |   |   |   |   |
|                                                                                 |   |                       |         |   |                       |   |         |   |   |   |         |   |   |   |   |   |
|                                                                                 |   | For the Nine               |         |   | For the Three              |   |
|                                                                                 |   | Months Ended September 30, |         |   | Months Ended September 30, |   |
|                                                                                 |   |                       | 2010         |   |                       |   | 2009         |   |   |   | 2010         |   |   |   | 2009 |   |
| Comprehensive Income:                                                                |   |                       |         |   |                       |   |         |   |   |   |         |   |   |   |   |   |
|    Net income                                                         |   | $                          | 32,155,662   |   |                       | $      | 31,590,908   |   |   | $      | 14,444,685   |   |   | $ | 11,514,520 |   |
|    Change in net unrealized (losses) gains on investments, net of tax |   |                       | (558,217     | )      |                       |   | 4,590,905    |   |   |   | 408,684      |   |   |   | (3,638,071 | ) |
|                                                                                 |   |                       |         |   |                       |   |         |   |   |   |         |   |   |   |   |   |
| Comprehensive Income                                                                 |   | $                          | 31,597,445   |   |                       | $      | 36,181,813   |   |   | $      | 14,853,369   |   |   | $ | 7,876,449 |   |
|                                                                                 |   |                       |         |   |                       |   |         |   |   |   |         |   |   |   |   |   |

----

|                                                                                |   | For the Nine Months Ended September 30, 2010  |       |
|-------------------------------------------------------------------------------------|--------|----------------------------------------------------|------------|
|                                                                                |   | Common Shares                                      |       |   | Preferred Stock Shares |   |   | Common Stock Amount |   |   | Preferred Stock Amount |   |   | Additional Paid-In Capital |   |   | Retained Earnings |   |   | Accumulated Other Comprehensive (Loss) Income |   |   | Stock Held in Trust |   |   | Treasury Stock |   |   | Total Stockholders’ Equity |   |
| Balance, Dec. 31, 2009                                                              |   |                                               | 40,214,884 |   |   |   | 108,640 |   |   | $ | 402,146 |   |   | $ | 1,087 |   |   | $ | 36,666,914 |   |   | $ | 84,100,372 |   |   | $ | 563,654 |   |   | $ | (511,110 | ) |   | $ | (7,948,606 | )  |   | $ | 113,274,457 |   |
|                                                                                |   |                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common shares issued                                                                |   |                                               | 1,900,207  |   |   |   |   |   |   |   | 19,002 |   |   |   |   |   |   |   | 1,858,078 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (4,715,261 | ) |   |   | (2,838,181 | ) |
|                                                                                |   |                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Preferred stock conversion                                                          |   |                                               | 1,187      |   |   |   | (950 | ) |   |   | 12 |   |   |   | (10 | ) |   |   | (2 | ) |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | - |   |
|                                                                                |   |                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Release of shares from SGT                                                          |   |                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 939,900 |   |   |   |   |   |   |   |   |   |   |   | 511,110 |   |   |   | (2,328,859 | ) |   |   | (877,849 | ) |
|                                                                                |   |                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Retirement of treasury shares                                                       |   |                                               | (1,239,190 | ) |   |   |   |   |   |   | (12,389 | ) |   |   |   |   |   |   | (7,591,863 | ) |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 7,603,312 |   |   |   | (940 | ) |
|                                                                                |   |                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock compensation plans                                                            |   |                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 1,766,346 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 1,766,346 |   |
|                                                                                |   |                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                                                          |   |                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 32,155,662 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 32,155,662 |   |
|                                                                                |   |                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Excess tax benefits from stock-based compensation                                   |   |                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 3,660,201 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 3,660,201 |   |
|                                                                                |   |                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Reclassification of excess tax benefits from stock-based compensation               |   |                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (421,894 | )  |   |   | 421,894 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | - |   |
|                                                                                |   |                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Amortization of deferred compensation                                               |   |                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 690,372 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 690,372 |   |
|                                                                                |   |                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Declaration of dividends                                                            |   |                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (8,631,614 | ) |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (8,631,614 | ) |
|                                                                                |   |                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Reclassification of investments to trading portfolio, net of tax effect of $253,170 |   |                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 403,137 |   |   |   |   |   |   |   |   |   |   |   | 403,137 |   |
|                                                                                |   |                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Change in net unrealized gain on invest, net of tax effect of $(603,732)            |   |                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                |   |                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (961,354 | ) |   |   |   |   |   |   |   |   |   |   | (961,354 | ) |
|                                                                                |   |                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, Sept. 30, 2010                                                             |   |                                               | 40,877,088 |   |   |   | 107,690 |   |   | $ | 408,771 |   |   | $ | 1,077 |   |   | $ | 37,568,052 |   |   | $ | 108,046,314 |   |   | $ | 5,437 |   |   | $ | - |   |   | $ | (7,389,414 | ) |   | $ | 138,640,237 |   |
|                                                                                |   |                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                |   | For the Nine Months Ended September 30, 2009       |       |
| Balance Dec. 31, 2008                                                               |   |                                               | 40,158,019 |   |   |   | 138,640 |   |   | $ | 401,578 |   |   | $ | 1,387 |   |   | $ | 33,587,414 |   |   | $ | 75,654,070 |   |   | $ | 24,834 |   |   | $ | (733,860 | ) |   | $ | (7,381,768 | ) |   | $ | 101,553,655 |   |
|                                                                                |   |                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common shares issued                                                                |   |                                               | 20,000     |   |   |   |   |   |   |   | 200 |   |   |   |   |   |   |   | 21,800 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 22,000 |   |
|                                                                                |   |                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Preferred stock conversion                                                          |   |                                               | 75,000     |   |   |   | (30,000 | ) |   |   | 750 |   |   |   | (300 | ) |   |   | (450 | ) |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                |   |                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Release of shares from SGT                                                          |   |                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 136,550 |   |   |   |   |   |   |   |   |   |   |   | 36,450 |   |   |   | (189,537 | ) |   |   | (16,537 | ) |
|                                                                                |   |                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock compensation plans                                                            |   |                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 1,421,332 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 1,421,332 |   |
|                                                                                |   |                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                                                          |   |                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 31,590,908 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 31,590,908 |   |
|                                                                                |   |                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Excess tax benefits from stock-based compensation                                   |   |                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 49,549 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 49,549 |   |
|                                                                                |   |                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Amortization of deferred compensation                                               |   |                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 490,407 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 490,407 |   |
|                                                                                |   |                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Declaration of dividends                                                            |   |                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (12,807,201 | ) |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (12,807,201 | ) |
|                                                                                |   |                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Change in net unrealized gain on invest, net of tax effect of $2,883,096            |   |                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 4,590,905 |   |   |   |   |   |   |   |   |   |   |   | 4,590,905 |   |
|                                                                                |   |                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, Sept. 30, 2009                                                             |   |                                               | 40,253,019 |   |   |   | 108,640 |   |   | $ | 402,528 |   |   | $ | 1,087 |   |   | $ | 35,706,602 |   |   | $ | 94,437,777 |   |   | $ | 4,615,739 |   |   | $ | (697,410 | ) |   | $ | (7,571,305 | ) |   | $ | 128,895,018 |   |

----

|                                                                                                  |   | Nine Months Ended  |         |   | Nine Months Ended  |   |
|-------------------------------------------------------------------------------------------------------|--------|--------------------|--------------|--------|--------------------|--------|
|                                                                                                  |   | September 30, 2010 |         |   | September 30, 2009 |   |
| Cash flows from operating activities:                                                                 |   |               |         |   |               |   |
| Net Income                                                                                            |   | $                  | 32,155,662   |   |               | $      | 31,590,908 |   |
| Adjustments to reconcile net income to net cash provided by operating activities:                     |   |               |         |   |               |
|      Bad debt expense                                                        |   |               | 1,665,919    |   |               |   | 1,056,636 |   |
|      Depreciation                                                            |   |               | 731,817      |   |               |   | 336,075 |   |
|      Amortization of cost of stock options                                   |   |               | 1,766,349    |   |               |   | 1,421,332 |   |
|      Amortization of restricted stock grants                                 |   |               | 690,372      |   |               |   | 490,407 |   |
|      Realized gains on investments                                           |   |               | (11,993,359  | )      |               |   | (13,588,681 | ) |
|      Unrealized gains on investments                                         |   |               | (8,597,233   | )      |               |   | - |   |
|      Foreign currency gains on investments                                   |   |               | (834,529     | )      |               |   | (6,108,112 | ) |
|      Amortization of premium / accretion of discount, net                    |   |               | 404,822      |   |               |   | 203,653 |   |
|      Deferred income taxes                                                   |   |               | 1,778,281    |   |               |   | 3,427,227 |   |
|      Other                                                                   |   |               | (20,935      | )      |               |   | 130,121 |   |
| Net change in assets and liabilities relating to operating activities:                                |   |               |         |   |               |   |   |   |
|      Prepaid reinsurance premiums                                            |   |               | (28,069,159  | )      |               |   | (34,804,467 | ) |
|      Reinsurance recoverables                                                |   |               | 24,480,200   |   |               |   | (4,621,514 | ) |
|      Premiums receivable, net                                                |   |               | (12,819,067  | )      |               |   | (5,005,214 | ) |
|      Other receivables                                                       |   |               | 2,035,488    |   |               |   | (2,817,396 | ) |
|      Income taxes recoverable                                                |   |               | 3,211,874    |   |               |   | 1,624,875 |   |
|      Deferred policy acquisition costs, net                                  |   |               | (3,388,225   | )      |               |   | (8,708,186 | ) |
|      Purchases of fixed maturities, trading                                  |   |               | (287,865,409 | )      |               |   | - |   |
|      Proceeds from sales of fixed maturities, trading                        |   |               | 338,319,461  |   |               |   | - |   |
|      Purchases of equity securities, trading                                 |   |               | (60,245,223  | )      |               |   | - |   |
|      Proceeds from sale of equity securities, trading                        |   |               | 56,968,340   |   |               |   | - |   |
|      Other assets                                                            |   |               | (150,404     | )      |               |   | (164,470 | ) |
|      Unpaid losses and loss adjustment expenses                              |   |               | 9,660,097    |   |               |   | 10,315,726 |   |
|      Unearned premiums                                                       |   |               | 67,933,901   |   |               |   | 35,004,845 |   |
|      Accounts payable                                                        |   |               | 323,469      |   |               |   | 58,414 |   |
|      Reinsurance payable                                                     |   |               | (5,172,264   | )      |               |   | 55,964,083 |   |
|      Income taxes payable                                                    |   |               | 3,095,292    |   |               |   | 235,571 |   |
|      Other accrued expenses                                                  |   |               | 1,921,402    |   |               |   | 8,279,954 |   |
|      Advance premium                                                         |   |               | 3,878,959    |   |               |   | 3,156,081 |   |
|           Net cash provided by operating activities |   |               | 131,865,898  |   |               |   | 77,477,868 |   |
| Cash flows from investing activities:                                                                 |   |               |         |   |               |   |   |   |
|      Proceeds from sale of property                                          |   |               | 32,608       |   |               |   | - |   |
|      Purchase of real estate                                                 |   |               | (1,016,921   | )      |               |   | - |   |
|      Purchases of fixed maturities, available-for-sale                       |   |               | (129,140,469 | )      |               |   | (206,473,797 | ) |
|      Proceeds from sales of fixed maturities, available-for-sale             |   |               | 116,237,712  |   |               |   | 203,451,919 |   |
|      Purchases of equity securities, available-for-sale                      |   |               | (80,730,225  | )      |               |   | (131,231,211 | ) |
|      Proceeds from sales of equity securities, available-for-sale            |   |               | 70,680,944   |   |               |   | 79,069,631 |   |
|      Capital expenditures and building improvements                          |   |               | (572,155     | )      |               |   | (509,517 | ) |
|           Net cash used in investing activities     |   |               | (24,508,506  | )      |               |   | (55,692,975 | ) |
| Cash flows from financing activities:                                                                 |   |               |         |   |               |   |   |   |
|      Bank overdraft                                                          |   |               | 4,481,669    |   |               |   | 4,559,007 |   |
|      Preferred stock dividend                                                |   |               | (14,962      | )      |               |   | (22,462 | ) |
|      Common stock dividend                                                   |   |               | (8,616,650   | )      |               |   | (8,268,279 | ) |
|      Issuance of common stock                                                |   |               | 7,000        |   |               |   | 22,000 |   |
|      Treasury shares on option exercise                                      |   |               | (3,723,972   | )      |               |   | (16,537 | ) |
|      Excess tax benefits from stock-based compensation                       |   |               | 3,660,200    |   |               |   | 19,625 |   |
|      Repayments of loans payable                                             |   |               | (1,102,941   | )      |               |   | - |   |
|           Net cash used in financing activities     |   |               | (5,309,656   | )      |               |   | (3,706,646 | ) |
|                                                                                                  |   |               |         |   |               |   |   |   |
| Net increase in cash and cash equivalents                                                             |   |               | 102,047,736  |   |               |   | 18,078,247 |   |
| Cash and cash equivalents at beginning of period                                                      |   |               | 192,924,291  |   |               |   | 256,964,637 |   |
| Cash and cash equivalents at end of period                                                            |   | $                  | 294,972,027  |   |               | $      | 275,042,884 |   |
|                                                                                                  |   |               |         |   |               |   |   |   |
| Non cash items:                                                                                       |   |               |         |   |               |   |   |   |
|      Dividends accrued                                                       |   | $                  | -            |   |               | $      | 4,516,460 |   |
|                                                                                                  |   |               |         |   |               |   |   |   |

----

----

|  Increase (decrease) in:             | For the nine months ended September 30, 2010 | For the three months ended September 30, 2010  |
|-------------------------------------------|----------------------------------------------|-----------------------------------------------------|
| Unrealized gains on investments           | $8,597,233                                   | $8,597,233                                          |
| Net income                                | $5,280,850                                   | $5,280,850                                          |
| Basic net income per common share         | $0.13                                        | $0.13                                               |
| Fully diluted net income per common share | $0.13                                        | $0.13                                               |
| Cash flows from operating activities      | $47,177,169                                  | not presented                                       |
| Cash flows from investing activities      | $(47,177,169)                                | not presented                                       |

----

| Reinsurer                          |   As of September 30,  2010 |   |  As of December 31,2009 |
|------------------------------------|-------------------------------------------------|--------|------------------------------|
| Everest Reinsurance Company        | $233,742,057                                    |   | $ 208,129,753                |
| Florida Hurricane Catastrophe Fund | n/a                                             |   | 24,888,534                   |
|                               |                                            |   |                         |
|    Total            | $233,742,057                                    |   | $ 233,018,287                |

----

|       |   |                                                |   | Reduction of in-force premium (only policies including wind coverage) |
|------------|--------|-----------------------------------------------------|--------|-----------------------------------------------------------------------|
| Date       |   | Percentage of UPCIC policyholders receiving credits |   | Total credits                                                         |   |   | In-force premium |   |   | Percentage reduction of in-force premium |
| 06/01/2007 |   |  1.9%                                          |   | $                                                                     | 6,284,697 |   |   | $ | 487,866,319 |   |   |  1.3% |
| 12/31/2007 |   |  11.8%                                         |   | $                                                                     | 31,951,623 |   |   | $ | 500,136,287 |   |   |  6.0% |
| 03/31/2008 |   |  16.9%                                         |   | $                                                                     | 52,398,215 |   |   | $ | 501,523,343 |   |   |  9.5% |
| 06/30/2008 |   |  21.3%                                         |   | $                                                                     | 74,185,924 |   |   | $ | 508,411,721 |   |   |  12.7% |
| 09/30/2008 |   |  27.3%                                         |   | $                                                                     | 97,802,322 |   |   | $ | 515,560,249 |   |   |  16.0% |
| 12/31/2008 |   |  31.1%                                         |   | $                                                                     | 123,524,911 |   |   | $ | 514,011,138 |   |   |  19.4% |
| 03/31/2009 |   |  36.3%                                         |   | $                                                                     | 158,229,542 |   |   | $ | 530,029,572 |   |   |  23.0% |
| 06/30/2009 |   |  40.4%                                         |   | $                                                                     | 188,053,342 |   |   | $ | 544,646,437 |   |   |  25.7% |
| 09/30/2009 |   |  43.0%                                         |   | $                                                                     | 210,291,783 |   |   | $ | 554,378,761 |   |   |  27.5% |
| 12/31/2009 |   |  45.2%                                         |   | $                                                                     | 219,974,130 |   |   | $ | 556,577,449 |   |   |  28.3% |
| 03/31/2010 |   |  47.8%                                         |   | $                                                                     | 235,717,892 |   |   | $ | 569,870,173 |   |   |  29.3% |
| 06/30/2010 |   |  50.9%                                         |   | $                                                                     | 281,386,124 |   |   | $ | 620,276,858 |   |   |  31.2% |
| 09/30/2010 |   |  52.4%                                         |   | $                                                                     | 291,306,407 |   |   | $ | 634,285,246 |   |   |  31.5% |

----

----

|   |                                        | 2ndEvent                                                                                                                           |                                                                                                                                          | 3rdEvent |   |
|--------|---------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------|----------|--------|
|   |                                        |                                                                                                                               |                                                                                                                                          |
|   | Coverage                                    | $123,700,000 in excess of $36,300,000 each loss occurrence subject to an otherwise recoverable amount of $123,700,000 (placed 50%) | $130,000,000 in excess of $30,000,000 each loss occurrence subject to an otherwise recoverable amount of $260,000,000 (placed 100%) |
|   |                                        |                                                                                                                               |                                                                                                                                          |
|   | Deposit premium (100%)                      | $22,266,000                                                                                                                        | $9,100,000                                                                                                                                    |
|   | Minimum premium (100%)                      | $17,812,800                                                                                                                        | $7,280,000                                                                                                                                    |
|   | Premium rate -% of total insured value | 0.020088%                                                                                                                          | 0.00821%                                                                                                                                      |

----

----

|   |   | Nine Months Ended September 30, 2010 |         |   | Nine Months Ended September 30, 2009 |   |
|--------|--------|--------------------------------------|--------------|--------|--------------------------------------|--------|
|   |   |                                 |         |   |                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   |   |                                 |         |   |                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   |   | PremiumsWritten                      |         |   | PremiumsEarned                       |   |   | Loss and LossAdjustment Expenses |   |   | PremiumsWritten |   |   | PremiumsEarned |   |   | Loss and LossAdjustment Expenses |   |
|   |   |                                 |         |   |                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Direct |   | $                                    | 520,781,570  |   |                                 | $      | 452,847,668 |   |   | $ | 156,537,023 |   |   | $ | 436,610,689 |   |   | $ | 401,605,845 |   |   | $ | 139,259,179 |   |
| Ceded  |   |                                 | (357,411,323 | )      |                                 |   | (329,342,164 | ) |   |   | (78,680,293 | ) |   |   | (328,518,186 | ) |   |   | (293,713,719 | ) |   |   | (70,563,627 | ) |
|   |   |                                 |         |   |                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net    |   | $                                    | 163,370,247  |   |                                 | $      | 123,505,504 |   |   | $ | 77,856,730 |   |   | $ | 108,092,503 |   |   | $ | 107,892,126 |   |   | $ | 68,695,552 |   |
|   |   |                                 |         |   |                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

|   |   | Three Months Ended September 30, 2010 |         |   | Three Months Ended September 30, 2009 |   |
|--------|--------|---------------------------------------|--------------|--------|---------------------------------------|--------|
|   |   |                                  |         |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   |   |                                  |         |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   |   | PremiumsWritten                       |         |   | PremiumsEarned                        |   |   | Loss and LossAdjustment Expenses |   |   | PremiumsWritten |   |   | PremiumsEarned |   |   | Loss and LossAdjustment Expenses |   |
|   |   |                                  |         |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Direct |   | $                                     | 152,662,238  |   |                                  | $      | 162,093,491 |   |   | $ | 59,511,679 |   |   | $ | 134,626,400 |   |   | $ | 139,207,538 |   |   | $ | 48,330,038 |   |
| Ceded  |   |                                  | (108,539,124 | )      |                                  |   | (113,262,337 | ) |   |   | (30,141,553 | ) |   |   | (104,152,022 | ) |   |   | (106,449,802 | ) |   |   | (24,561,309 | ) |
|   |   |                                  |         |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net    |   | $                                     | 44,123,114   |   |                                  | $      | 48,831,154 |   |   | $ | 29,370,126 |   |   | $ | 30,474,378 |   |   | $ | 32,757,736 |   |   | $ | 23,768,729 |   |

|                                             |   | As of Sept. 30,2010 |        |   | As of December 31,2009 |   |
|--------------------------------------------------|--------|---------------------|-------------|--------|------------------------|--------|
|                                             |   |                |        |   |                   |   |
| Prepaid reinsurance premiums                     |   | $                   | 228,363,400 |   |                   | $      | 200,294,241 |   |
|                                             |   |                |        |   |                   |   |   |   |
| Reinsurance recoverable on unpaid losses and LAE |   | $                   | 67,151,722  |   |                   | $      | 62,900,913 |   |
| Reinsurance recoverable on paid losses           |   |                | 184,511     |   |                   |   | 28,915,520 |   |
| Reinsurance recoverables                         |   | $                   | 67,336,233  |   |                   | $      | 91,816,433 |   |
|                                             |   |                |        |   |                   |   |   |   |

|                                                                          |   |                |        |   |                   |   |
|-------------------------------------------------------------------------------|--------|---------------------|-------------|--------|------------------------|--------|
|                                                                          |   | As of Sept. 30,2010 |        |   | As of December 31,2009 |   |
|                                                                          |   |                |        |   |                   |   |
|  Reinsurance payable, net of ceding commissions due from reinsurers |   | $                   | 109,972,621 |   |                   | $      | 105,536,847 |   |
| Inuring premiums receivable                                                   |   |                | (42,040,290 | )      |                   |   | (32,432,252 | ) |
|                                                                          |   |                |        |   |                   |   |   |   |
| Reinsurance payable, net                                                      |   | $                   | 67,932,331  |   |                   | $      | 73,104,595 |   |
|                                                                          |   |                |        |   |                   |   |   |   |

----

|                                                                              |   | For the Nine Months Ended September 30, |     |
|-----------------------------------------------------------------------------------|--------|-----------------------------------------|----------|
|                                                                              |   | 2010                                    |     |   | 2009 |   |
| Cash and cash equivalents                                                         |   | $                                       | 109,150  |   |   | $ | 253,073 |   |
| Fixed maturities                                                                  |   |                                    | 710,325  |   |   |   | 1,136,568 |   |
| Equity securities                                                                 |   |                                    | 36,530   |   |   |   | 634,362 |   |
|      Total investment income                             |   |                                    | 856,005  |   |   |   | 2,024,003 |   |
| Less investment expenses                                                          |   |                                    | (479,430 | ) |   |   | (638,996 | ) |
|                                                                              |   |                                    |     |   |   |   |   |   |
|           Net investment income |   | $                                       | 376,575  |   |   | $ | 1,385,007 |   |
|                                                                              |   |                                    |     |   |   |   |   |   |

----

|                                                                                     | As of September 30, 2010 |
|------------------------------------------------------------------------------------------|--------------------------|
| Financial Institution                                                                    | Cash                     | Money Market Funds | Total | % |
|                                                                                     |                     |   |   |   |
| U. S. Bank IT&C (1)                                                                  | $0                       | $71,454,904 | $71,454,904 | 24.2% |
| Evergreen Investment Management                                                          |                     |   |   |   |
|    Company, L.L.C.                                                        | 0                        | 2,909 | 2,909 | 0.0% |
| SunTrust Bank                                                                            | 1,203,993                | 0 | 1,203,993 | 0.4% |
| SunTrust Bank Institutional                                                              |                     |   |   |   |
|    Asset Services                                                         | 0                        | 197,938,069 | 197,938,069 | 67.2% |
| Wachovia Bank, N.A.                                                                      | 660,389                  |   | 660,389 | 0.2% |
| Bank of New York Trust Fund                                                              | 0                        | 23,276,955 | 23,276,955 | 7.9% |
| All Other Banking Institutions                                                           | 434,808                  | 0 | 434,808 | 0.1% |
|                                                                                     | $2,299,190               | $292,672,837 | $294,972,027 | 100.0% |
|                                                                                     |                     |   |   |   |
| (1)   Funds invested with Evergreen Investment Management Company, L.L.C. |                     |
|                                                                                     |                     |   |   |   |
|                                                                                     |                     |   |   |   |
|                                                                                     |                     |   |   |   |
|                                                                                     | As of December 31, 2009  |
| Financial Institution                                                                    | Cash                     | Money Market Funds | Total | % |
|                                                                                     |                     |   |   |   |
| U. S. Bank IT&C (1)                                                                  | $0                       | $71,977,371 | $71,977,371 | 37.3% |
| Evergreen Investment Management                                                          | 0                        | 26,909 | 26,909 | 0.0% |
|    Company, L.L.C.                                                        |                     |   |   |   |
| SunTrust Bank                                                                            | 1,063,785                | 0 | 1,063,785 | 0.5% |
| SunTrust Bank Institutional                                                              |                     |   |   |   |
|    Asset Services                                                         | 0                        | 102,257,833 | 102,257,833 | 53.0% |
| Wachovia Bank, N.A.                                                                      | 489,051                  | 0 | 489,051 | 0.3% |
| Bank of New York Trust Fund                                                              | 0                        | 16,515,181 | 16,515,181 | 8.6% |
| All Other Banking Institutions                                                           | 594,161                  | 0 | 594,161 | 0.3% |
|                                                                                     | $2,146,997               | $190,777,294 | $192,924,291 | 100.0% |
|                                                                                     |                     |   |   |   |
| (1)   Funds invested with Evergreen Investment Management Company, L.L.C. |                     |

|                                    |   |   | For the Nine Months Ended |   |   |   | For the Three Months Ended |   |
|-----------------------------------------|--------|--------|---------------------------|--------|--------|--------|----------------------------|--------|
|                                    |   |   | September 30, 2010        |   |   |   | September 30, 2010         |   |
| Fixed maturities                        |   | $      | 4,498,755                 |   |   | $      | 2,602,654                  |   |
| Equity securities                       |   |   | 11,187,280                |   |   |   | 3,993,320                  |   |
|    Total realized gains  |   | $      | 15,686,035                |   |   | $      | 6,595,974                  |   |
|                                    |   |   |                      |   |   |   |                       |   |
| Fixed maturities                        |   | $      | (365,171                  | )      |   | $      | (81,269                    | )      |
| Equity securities                       |   |   | (3,177,480                | )      |   |   | (167,665                   | )      |
| Other Investments                       |   |   | (150,025                  | )      |   |   | (98,025                    | )      |
|    Total realized losses |   | $      | (3,692,676                | )      |   | $      | (346,959                   | )      |
|                                    |   |   |                      |   |   |   |                       |   |
| Net realized gains on investments       |   | $      | 11,993,359                |   |   | $      | 6,249,015                  |   |

----

|                                                               |   | December 31, 2009          |       |
|--------------------------------------------------------------------|--------|----------------------------|------------|
|                                                               |   | Amortized Cost / Cost |       |   | Gross Unrealized Gains |   |   | Gross Unrealized Losses |   |   | Estimated Fair Value |   |
| Fixed maturities:                                                  |   |                       |       |   |   |   |   |   |   |   |   |   |
|      US government and agency obligations |   | $                          | 42,296,727 |   |   | $ | 37,623 |   |   | $ | (945,342 | ) |   | $ | 41,389,008 |   |
| Total fixed maturities                                             |   | $                          | 42,296,727 |   |   | $ | 37,623 |   |   | $ | (945,342 | ) |   | $ | 41,389,008 |   |
|                                                               |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Equity securities:                                                 |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      Commodities                          |   | $                          | 53,098,484 |   |   | $ | 4,079,387 |   |   | $ | (216,691 | ) |   | $ | 56,961,180 |   |
|      Common stock                         |   |                       | 18,437,549 |   |   |   | 199,045 |   |   |   | (2,189,772 | ) |   |   | 16,446,822 |   |
| Total equity securities                                            |   | $                          | 71,536,033 |   |   | $ | 4,278,432 |   |   | $ | (2,406,463 | ) |   | $ | 73,408,002 |   |
|                                                               |   |                       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

|                                                               |   | September 30, 2010 |   |   | December 31, 2009 |   |
|--------------------------------------------------------------------|--------|--------------------|--------|--------|-------------------|--------|
|                                                               |   | Carrying           |   |   | Percent           |   |   | Carrying |   |   | Percent |   |
|                                                               |   | Amount             |   |   | of Total          |   |   | Amount |   |   | of Total |   |
| Available for sale                                                 |   |               |   |   |              |   |   |   |   |   |   |   |
| Fixed maturities, at fair value:                                   |   |               |   |   |              |   |   |   |   |   |   |   |
|      US government and agency obligations |   |  $            | -      |   |              |   | 0.0 | % |   |  $ | 41,389,008 |   |   |   | 36.1 | % |
|                                                               |   |               |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Equity securities, at fair value:                                  |   |               |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
|      Commodities                          |   |               | -      |   |              |   | 0.0 | % |   |   | 56,961,180 |   |   |   | 49.6 | % |
|      Common stock                         |   |               | -      |   |              |   | 0.0 | % |   |   | 16,446,822 |   |   |   | 14.3 | % |
|                                                               |   |               |   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Total investments                                                  |   | $                  | -      |   |              |   | 0.00 | % |   | $ | 114,797,010 |   |   |   | 100.00 | % |

|                                                               |   | September 30, 2010 |        |   | December 31, 2009 |   |
|--------------------------------------------------------------------|--------|--------------------|-------------|--------|-------------------|--------|
|                                                               |   | Carrying           |        |   | Percent           |   |   | Carrying |   |   | Percent |   |
|                                                               |   | Amount             |        |   | of Total          |   |   | Amount |   |   | of Total |   |
| Trading                                                            |   |               |        |   |              |   |   |   |   |   |   |   |
| Fixed maturities, at fair value:                                   |   |               |        |   |              |   |   |   |   |   |   |   |
|      US government and agency obligations |   |  $            | 3,465,332   |   |              |   | 3.3 | % |   |  $ | - |   |   |   | 0.0 | % |
|      Foreign obligations                  |   |               | 6,173,911   |   |              |   | 5.9 | % |   |   | - |   |   |   | 0.0 | % |
|                                                               |   |               |        |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Equity securities, at fair value:                                  |   |               |        |   |              |   |   |   |   |   |   |   |   |   |   |   |
|      Commodities                          |   |               | 84,388,400  |   |              |   | 80.9 | % |   |   | - |   |   |   | 0.0 | % |
|      Common stock                         |   |               | 10,328,369  |   |              |   | 9.9 | % |   |   | - |   |   |   | 0.0 | % |
|                                                               |   |               |        |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Total investments                                                  |   | $                  | 104,356,012 |   |              |   | 100.00 | % |   | $ | - |   |   |   | 0.00 | % |

| Available-for-sale                     |   | September 30, 2010 |   |   | December 31, 2009          |   |
|----------------------------------------|--------|--------------------|--------|--------|----------------------------|--------|
| Contractual or Expected Period:        |   | Amortized Cost     |   |   |  Estimated Fair Value |   |   | Amortized Cost |   |   | Estimated Fair Value |   |
| Due in one year or less                |   | $                  | -      |   |                       | $      | - |   |   |   | $ | - |   |   | $ | - |   |
| Due after one year through five years  |   |               | -      |   |                       |   | - |   |   |   |   | 176,350 |   |   |   | 180,901 |   |
| Due after five years through ten years |   |               | -      |   |                       |   | - |   |   |   |   | 2,909,446 |   |   |   | 2,942,497 |   |
| Due after ten years                    |   |               | -      |   |                       |   | - |   |   |   |   | 39,210,931 |   |   |   | 38,265,610 |   |
|                                   |   |               |   |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |
|      Total    |   | $                  | -      |   |                       | $      | - |   |   |   | $ | 42,296,727 |   |   | $ | 41,389,008 |   |

----

| Trading                                |   | September 30, 2010 |      | December 31, 2009 |                 |
|----------------------------------------|--------|--------------------|-----------|-------------------|----------------------|
| Contractual or Expected Period:        |   | Amortized Cost     |      |              | Estimated Fair Value |   | Amortized Cost |   |   | Estimated Fair Value |   |
| Due in one year or less                |   | $                  | 3,356,843 |              |                 | $ | 3,393,067 |   |   | $ | - |   |   | $ | - |   |
| Due after one year through five years  |   |               | 2,889,897 |              |                 |   | 2,961,866 |   |   |   | - |   |   |   | - |   |
| Due after five years through ten years |   |               | 3,019,144 |              |                 |   | 3,284,310 |   |   |   | - |   |   |   | - |   |
| Due after ten years                    |   |               | -         |              |                 |   | - |   |   |   | - |   |   |   | - |   |
|                                   |   |               |      |              |                 |   |   |   |   |   |   |   |   |   |   |   |
|      Total    |   | $                  | 9,265,884 |              |                 | $ | 9,639,243 |   |   | $ | - |   |   | $ | - |   |

|   | 2010       | $           - |   |
|--------|------------|----------------------------------------------------------------------|--------|
|   | 2011       |  1,470,588                                                      |   |
|   | 2012       |    1,470,588                                          |   |
|   | 2013       |    1,470,588                                          |   |
|   | 2014       | 1,470,588                                                            |   |
|   | Thereafter |  17,647,060                                                     |   |
|   | Total      | $23,529,412                                                          |   |

----

----

----

|                                     |  As of September 30,2010                                                                                                                                                   |   | As of December 31, 2009                                                                                                                                                                            |
|------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Deferred income tax assets:              |                                                                                                                                                                            |   |                                                                                                                                                                                                    |
| Unearned premiums                        |     $                9,099,152                                                        |   |  $               6,023,587                                                                                              |
| Advanced premiums                        |               1,557,207                                                                                   |   |                   1,266,152                                                                                   |
| Unpaid losses                            |               1,987,558                                                                                   |   |                   1,836,061                                                                                   |
| Regulatory assessments                   |                  535,240                                                                   |   |                   1,605,884                                                                                   |
| Executive compensation                   |                              - |   |                      181,992                                                                   |
| Shareholder compensation                 |                  446,550                                                                   |   |                      327,553                                                                   |
| Stock option expense                     |               3,334,872                                                                                   |   |                   3,037,961                                                                                   |
| Accrued wages                            |                  338,543                                                                   |   |                      423,190                                                                   |
| Allowance for uncollectible receivables  |                  644,143                                                                   |   |                   1,042,228                                                                                   |
| Additional tax basis of securities       |                  180,184                                                                   |   |                      140,878                                                                   |
| Restricted stock grant                   |                  276,193                                                                   |   |                          9,882                                             |
| Recognition of OTTI                      |                  306,897                                                                   |   |                                  - |
| Other                                    |                              - |   |                          3,876                                             |
|                                     |                                                                                                                                                                            |   |                                                                                                                                                                                                    |
| Total deferred income tax assets         |             18,706,539                                                                                              |   |                 15,899,244                                                                                              |
|                                     |                                                                                                                                                                            |   |                                                                                                                                                                                                    |
| Deferred income tax liabilities:         |                                                                                                                                                                            |   |                                                                                                                                                                                                    |
| Deferred policy acquisition costs, net   |              (4,957,986)                                                                                       |   |                  (3,650,979)                                                                                       |
| Net unrealized gains on investments      |                     (3,414)                                                 |   |                     (353,976)                                                                       |
| Market value gains on trading securities |              (3,278,569)                                                                                       |   |                                  - |
| Total deferred income tax liabilities    |              (8,239,969)                                                                                       |   |                  (4,004,955)                                                                                       |
|                                     |                                                                                                                                                                            |   |                                                                                                                                                                                                    |
| Net deferred income tax asset            | $               10,466,570                                                                                |   |  $             11,894,289                                                                                                         |

----

|                           |   |      |       |   |                   |   |   |   |            |   |          |   |   |  Aggregate |   |
|--------------------------------|--------|-----------|------------|--------|------------------------|--------|--------|--------|-----------------|--------|---------------|--------|--------|-----------------|--------|
|                           |   | Number    |       |   | Option Price per Share |   |   |   |  Intrinsic |   |
|                           |   | of Shares |       |   | Low                    |   |   | High   |            |   | Weighted Avg. |   |   | Value           |   |
|                           |   |      |       |   |                   |   |   |   |            |   |          |   |   |            |   |
| Outstanding January 1, 2010    |   |      | 6,345,000  |   |                   | $      | 0.50   |   |            | $      | 6.50          |   |   | $               | 3.21   |   |   | $ | 17,888,900 |   |
|   Granted            |   |      | 1,665,000  |   |                   | $      | 4.87   |   |            | $      | 5.84          |   |   | $               | 5.07   |   |   |   |   |   |
|   Exercised          |   |      | (2,230,000 | )      |                   | $      | 0.70   |   |            | $      | 3.90          |   |   | $               | 1.49   |   |   |   |   |   |
|   Expired            |   |      | -          |   |                   |   |   |   |            |   |          |   |   |            |   |   |   |   |   |   |
| Outstanding September 30, 2010 |   |      | 5,780,000  |   |                   | $      | 0.50   |   |            | $      | 6.50          |   |   | $               | 4.41   |   |   | $ | 4,613,100 |   |
|                           |   |      |       |   |                   |   |   |   |            |   |          |   |   |            |   |   |   |   |   |   |
| Outstanding January 1, 2009    |   |      | 6,650,000  |   |                   | $      | 0.50   |   |            | $      | 6.50          |   |   | $               | 3.15   |   |   | $ | 3,795,250 |   |
|   Granted            |   |      | -          |   |                   |   |   |   |            |   |          |   |   |            |   |   |   |   |   |   |
|   Exercised          |   |      | (65,000    | )      |                   | $      | 1.10   |   |            | $      | 3.90          |   |   | $               | 3.00   |   |   |   |   |   |
|   Expired            |   |      | -          |   |                   |   |   |   |            |   |          |   |   |            |   |   |   |   |   |   |
| Outstanding September 30, 2009 |   |      | 6,585,000  |   |                   | $      | 0.50   |   |            | $      | 6.50          |   |   | $               | 3.15   |   |   | $ | 14,685,300 |   |

----

----

|                                                |  Issued Shares                                                                                                             |  Treasury Shares |  Shares Held in Trust                                                                                                                        |  Outstanding Shares |
|-----------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------|-----------------------|---------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------|
|                                                |                                                                                                                            |                  |                                                                                                                                              |                     |   |   |   |
| Balance, January 1, 2010                            |     40,214,884                                                                                              |                  |         (1,809,119)                                                                                       |                     |             (631,000) |   |   37,774,765 |
| Issued Shares                                       |              2,394                                             |                  |                         - |                     |                          - |   |            2,394 |
| Options exercised                                   |       1,599,000                                                                                   |                  |                         - |                     |              631,000 |   |     2,230,000 |
| Shares applied to exercise price and payroll taxes: |                                                                                                                            |                  |                                                                                                                                              |                     |   |   |   |
| Shares held in trust                                |                      - |                  |         (1,141,126)                                                                                       |                     |                          - |   |   (1,141,126) |
| Shares cancelled                                    |     (1,239,190)                                                                                             |                  |           1,239,190                                                                             |                     |                          - |   |                    - |
| Restricted stock grant                              |          300,000                                                                   |                  |                         - |                     |                          - |   |        300,000 |
|                                                |                                                                                                                            |                  |                                                                                                                                              |                     |   |   |   |
| Balance, September 30, 2010                         |     40,877,088                                                                                              |                  |         (1,711,055)                                                                                       |                     |                          - |   |   39,166,033 |

|           |   | For the nine-month period ended |   |   | For the nine-month period ended |   |
|----------------|--------|---------------------------------|--------|--------|---------------------------------|--------|
|           |   | September 30, 2010              |   |   |                            |   |   | September 30, 2009 |   |
|           |   | Per ShareAmount                 |   |   | AggregateAmount                 |   |   | Per ShareAmount |   |   | AggregateAmount |   |
|           |   |                            |   |   |                            |   |   |   |
| First Quarter  |   | $                               | 0.12   |   |                            | $      | 4,699,926 |   |   | $ | 0.22 |   |   | $ | 8,268,278 |   |
| Second Quarter |   | $                               | 0.10   |   |                            | $      | 3,916,724 |   |   | $ | 0.12 |   |   | $ | 4,516,461 |   |
| Third Quarter  |   |                            | -      |   |                            |   | - |   |   |   | - |   |   |   | - |   |

----

----

|                                                           |   | Nine Months EndedSeptember 30, 2010     |       |   | Nine Months EndedSeptember 30, 2009 |   |
|----------------------------------------------------------------|--------|-----------------------------------------|------------|--------|-------------------------------------|--------|
|                                                           |   |                                    |       |   |                                |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                           |   | Income Available to Common Stockholders |       |   | Shares                              |   |   | Per-ShareAmount |   |   | Income Available to Common Stockholders |   |   | Shares |   |   | Per-ShareAmount |   |
|                                                           |   |                                    |       |   |                                |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                                     |   | $                                       | 32,155,662 |   |                                |   |   |   |   |   |   | $ | 31,590,908 |   |   |   |   |   |   |   |
|  Less: preferred stocks dividends                         |   |                                    | (14,963    | )      |                                |   |   |   |   |   |   |   | (22,463 | ) |   |   |   |   |   |   |
| Income available to common stockholders                        |   | $                                       | 32,140,699 |   |                                |   | 39,075,571 |   |   | $ | 0.82 |   |   | $ | 31,568,445 |   |   |   | 37,601,409 |   |   | $ | 0.84 |   |
|                                                           |   |                                    |       |   |                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Effect of dilutive securities:                                 |   |                                    |       |   |                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                           |   |                                    |       |   |                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Stock options and warrants                         |   |                                    | -          |   |                                |   | 1,150,946 |   |   |   | (0.02 | ) |   |   | - |   |   |   | 2,593,855 |   |   |   | (0.05 | ) |
|   Preferred stock                                    |   |                                    | 14,963     |   |                                |   | 159,928 |   |   |   | - |   |   |   | 22,463 |   |   |   | 179,145 |   |   |   | (0.01 | ) |
| Income available to common stockholders and assumed conversion |   | $                                       | 32,155,662 |   |                                |   | 40,386,445 |   |   |   | 0.80 |   |   | $ | 31,590,908 |   |   |   | 40,374,409 |   |   | $ | 0.78 |   |
|                                                           |   |                                    |       |   |                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

|                                                           |   | Three Months EndedSeptember 30, 2010   |       |   | Three Months EndedSeptember 30, 2009 |   |
|----------------------------------------------------------------|--------|----------------------------------------|------------|--------|--------------------------------------|--------|
|                                                           |   |                                   |       |   |                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                           |   | Income Available to CommonStockholders |       |   | Shares                               |   |   | Per-ShareAmount |   |   | Income Available to CommonStockholders |   |   | Shares |   |   | Per-ShareAmount |   |
|                                                           |   |                                   |       |   |                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                                     |   | $                                      | 14,444,685 |   |                                 |   |   |   |   |   |   | $ | 11,514,520 |   |   |   |   |   |   |   |
|  Less: preferred stocks dividends                         |   |                                   | (4,988     | )      |                                 |   |   |   |   |   |   |   | (4,988 | ) |   |   |   |   |   |   |
| Income available to common stockholders                        |   | $                                      | 14,439,697 |   |                                 |   | 39,167,241 |   |   | $ | 0.37 |   |   | $ | 11,509,532 |   |   |   | 37,625,013 |   |   | $ | 0.31 |   |
|                                                           |   |                                   |       |   |                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Effect of dilutive securities:                                 |   |                                   |       |   |                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                           |   |                                   |       |   |                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Stock options and warrants                         |   |                                   | -          |   |                                 |   | 949,485 |   |   |   | (0.01 | ) |   |   | - |   |   |   | 2,885,758 |   |   |   | (0.03 | ) |
|   Preferred stock                                    |   |                                   | 4,988      |   |                                 |   | 159,550 |   |   |   | - |   |   |   | 4,988 |   |   |   | 160,738 |   |   |   | 0.00 |   |
| Income available to common stockholders and assumed conversion |   | $                                      | 14,444,685 |   |                                 |   | 40,276,276 |   |   | $ | 0.36 |   |   | $ | 11,514,520 |   |   |   | 40,671,509 |   |   | $ | 0.28 |   |

----

|                                                                   |   |                     |      |   |                     |   |       |      |   |   |      |   |   |   |       |   |      |   |
|------------------------------------------------------------------------|--------|--------------------------|-----------|--------|--------------------------|--------|------------|-----------|--------|--------|-----------|--------|--------|--------|------------|--------|-----------|--------|
|                                                                   |   |                     |      |   |                     |   |       |      |   |   |      |   |   |   |       |   |      |   |
|                                                                   |   | For the Nine Months      |      |   | For the Nine Months      |   |
|                                                                   |   | Ended September 30, 2010 |      |   | Ended September 30, 2009 |   |
|                                                                   |   | Pretax                   |      |   | Tax                      |   |       | After-tax |   |   | Pretax    |   |   | Tax    |       |   | After-tax |   |
|                                                                   |   |                     |      |   |                     |   |       |      |   |   |      |   |   |   |       |   |      |   |
| Net unrealized gains on available-for-sale                             |   |                     |      |   |                     |   |       |      |   |   |      |   |   |   |       |   |      |   |
|    investments arising during the periods               |   | $                        | 4,979,278 |   |                     | $      | (1,920,757 | )         |   | $      | 3,058,521 |   |   | $      | 27,219,627 |   |      | $      | (10,499,972 | ) |   | $ | 16,719,655 |   |
|                                                                   |   |                     |      |   |                     |   |       |      |   |   |      |   |   |   |       |   |      |   |   |   |   |   |   |   |
| Less:  realized gains on investments                         |   |                     | 5,744,344 |   |                     |   | (2,215,881 | )         |   |   | 3,528,463 |   |   |   | 13,588,681 |   |      |   | (5,241,834 | ) |   |   | 8,346,847 |   |
|                                                                   |   |                     |      |   |                     |   |       |      |   |   |      |   |   |   |       |   |      |   |   |   |   |   |   |   |
| Less:  reclassification of unrealized losses                 |   |                     |      |   |                     |   |       |      |   |   |      |   |   |   |       |   |      |   |   |   |   |   |   |   |
|     relating to the reclassification of investment |   |                     |      |   |                     |   |       |      |   |   |      |   |   |   |       |   |      |   |   |   |   |   |   |   |
|     portfolio to trading from available-for-sale   |   |                     | (656,307  | )      |                     |   | 253,170    |      |   |   | (403,137  | )      |   |   | -          |   |      |   | - |   |   |   | - |   |
|                                                                   |   |                     |      |   |                     |   |       |      |   |   |      |   |   |   |       |   |      |   |   |   |   |   |   |   |
| Less:  realized foreign currency gains                       |   |                     |      |   |                     |   |       |      |   |   |      |   |   |   |       |   |      |   |   |   |   |   |   |   |
|    on investments                                       |   |                     | 809,050   |   |                     |   | (312,091   | )         |   |   | 496,959   |   |   |   | 6,156,945  |   |      |   | (2,375,042 | ) |   |   | 3,781,903 |   |
|                                                                   |   |                     |      |   |                     |   |       |      |   |   |      |   |   |   |       |   |      |   |   |   |   |   |   |   |
| Less:  other                                                 |   |                     | (9,031    | )      |                     |   | 3,484      |      |   |   | (5,547    | )      |   |   | -          |   |      |   | - |   |   |   | - |   |
|                                                                   |   |                     |      |   |                     |   |       |      |   |   |      |   |   |   |       |   |      |   |   |   |   |   |   |   |
| Change in net unrealized gains                                         |   |                     |      |   |                     |   |       |      |   |   |      |   |   |   |       |   |      |   |   |   |   |   |   |   |
| on available-for-sale investments                                      |   |                     | (908,778  | )      |                     |   | 350,561    |      |   |   | (558,217  | )      |   |   | 7,474,001  |   |      |   | (2,883,096 | ) |   |   | 4,590,905 |   |
|                                                                   |   |                     |      |   |                     |   |       |      |   |   |      |   |   |   |       |   |      |   |   |   |   |   |   |   |
| Other comprehensive (loss) income                                      |   | $                        | (908,778  | )      |                     | $      | 350,561    |      |   | $      | (558,217  | )      |   | $      | 7,474,001  |   |      | $      | (2,883,096 | ) |   | $ | 4,590,905 |   |
|                                                                   |   |                     |      |   |                     |   |       |      |   |   |      |   |   |   |       |   |      |   |   |   |   |   |   |   |

|                                                                   |   | For the Three Months     |     |   | For the Three Months     |   |
|------------------------------------------------------------------------|--------|--------------------------|----------|--------|--------------------------|--------|
|                                                                   |   | Ended September 30, 2010 |     |   | Ended September 30, 2009 |   |
|                                                                   |   | Pretax                   |     |   | Tax                      |   |   | After-tax |   |   | Pretax |   |   | Tax |   |   | After-tax |   |
|                                                                   |   |                     |     |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net unrealized gains on available-for-sale                             |   |                     |     |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    investments arising during the periods               |   | $                        | -        |   |                     | $      | - |   |   | $ | - |   |   | $ | 12,243,930 |   |   | $ | (4,689,936 | ) |   | $ | 7,553,994 |   |
|                                                                   |   |                     |     |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Less:  realized gains on investments                         |   |                     | -        |   |                     |   | - |   |   |   | - |   |   |   | 12,136,072 |   |   |   | (4,681,490 | ) |   |   | 7,454,582 |   |
|                                                                   |   |                     |     |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Less:  reclassification of unrealized losses                 |   |                     |     |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     relating to the reclassification of investment |   |                     |     |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     portfolio to trading from available-for-sale   |   |                     | (656,307 | )      |                     |   | 253,170 |   |   |   | (403,137 | ) |   |   | - |   |   |   | - |   |   |   | - |   |
|                                                                   |   |                     |     |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Less:  realized foreign currency gains                       |   |                     |     |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    on investments                                       |   |                     |     |   |                     |   | - |   |   |   | - |   |   |   | 6,084,629 |   |   |   | (2,347,146 | ) |   |   | 3,737,483 |   |
|                                                                   |   |                     |     |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Less:  other                                                 |   |                     | (9,031   | )      |                     |   | 3,484 |   |   |   | (5,547 | ) |   |   | - |   |   |   | - |   |   |   | - |   |
|                                                                   |   |                     |     |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Change in net unrealized gains                                         |   |                     |     |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| on available-for-sale investments                                      |   |                     | 665,338  |   |                     |   | (256,654 | ) |   |   | 408,684 |   |   |   | (5,976,771 | ) |   |   | 2,338,700 |   |   |   | (3,638,071 | ) |
|                                                                   |   |                     |     |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other comprehensive income (loss)                                      |   | $                        | 665,338  |   |                     | $      | (256,654 | ) |   | $ | 408,684 |   |   | $ | (5,976,771 | ) |   | $ | 2,338,700 |   |   | $ | (3,638,071 | ) |
|                                                                   |   |                     |     |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

| Level 1:       |   | Financial assets and financial liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market that the Company can access.                                                                                                                                                                                            |   |
|---------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|  Level 2: |   |  Financial assets and financial liabilities whose values are based on inputs that utilize other than quoted prices included in Level I that are observable for similar assets, or unobservable inputs that are corroborated by market data.                                                                                                                              |   |
|  Level 3: |   |  Financial assets and financial liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs reflect the Company's estimates of the assumptions that market participants would use in valuing the financial assets and financial liabilities. |

----

|                                                |   | Fair Value Measurements  |        |
|-----------------------------------------------------|--------|--------------------------|-------------|
|                                                |   | Level 1                  |        |   | Level 2 |   |   | Level 3 |   |   | Total |   |
|                                                |   |                     |        |   |   |   |   |   |   |   |   |   |
|                                                |   | As of September 30, 2010 |        |
| US government obligations and agencies              |   | $                        | 3,465,332   |   |   | $ | - |   |   | $ | - |   |   | $ | 3,465,332 |   |
| Foreign obligations                                 |   |                     | 6,173,911   |   |   |   | - |   |   |   | - |   |   |   | 6,173,911 |   |
| Equity securities                                   |   |                     | 94,716,769  |   |   |   | - |   |   |   | - |   |   |   | 94,716,769 |   |
|                                                |   |                     |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      Total invested assets |   | $                        | 104,356,012 |   |   | $ | - |   |   | $ | - |   |   | $ | 104,356,012 |   |
|                                                |   |                     |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                |   |                     |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                |   | As of December 31, 2009  |        |
| US government obligations and agencies              |   | $                        | 41,389,008  |   |   | $ | - |   |   | $ | - |   |   | $ | 41,389,008 |   |
| Equity securities                                   |   |                     | 73,408,002  |   |   |   | - |   |   |   | - |   |   |   | 73,408,002 |   |
|                                                |   |                     |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      Total invested assets |   | $                        | 114,797,010 |   |   | $ | - |   |   | $ | - |   |   | $ | 114,797,010 |   |

----

----

----

|                                  |   | As of September 30, |        |   | As of December 31, |   |
|---------------------------------------|--------|---------------------|-------------|--------|--------------------|--------|
| Type of Investment                    |   | 2010                |        |   | 2009               |   |
| Cash and cash equivalents             |   | $                   | 294,972,027 |   |               | $      | 192,924,291 |   |
| Fixed maturities, available-for-sale  |   |                | -           |   |               |   | 41,389,008 |   |
| Equity securities, available-for-sale |   |                | -           |   |               |   | 73,408,002 |   |
| Fixed maturities, trading             |   |                | 9,639,243   |   |               |   | - |   |
| Equity securities, trading            |   |                | 94,716,769  |   |               |   | - |   |
| Real estate, net                      |   |                | 4,100,540   |   |               |   | 3,289,893 |   |
|                                  |   |                |        |   |               |   |   |   |
| Total Investments                     |   | $                   | 403,428,579 |   |               | $      | 311,011,194 |   |
|                                  |   |                |        |   |               |   |   |   |

----

----

----

|                                    |         |  Nine months ended September 30, 2010                                                                                                        |
|-----------------------------------------|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------|
|                                    |         |                   Direct       |              Ceded       |             Net       |
|  Loss and loss adjustment expenses | $156,537,023 | $78,680,292                                                                                                                                       | $77,856,730 |
|  Premiums earned                   |         | $452,847,668                                                                                                                                      | $329,342,164 | $123,505,504 |
|  Loss & LAE ratios             |         | 34.6%                                                                                                                                             | 23.9% | 63.0% |
|                                    |         |                                                                                                                                              |   |   |
|                                    |         |                                                                                                                                              |   |   |

----

|   |   |  Nine months ended September 30, 2009 |
|--------|--------|--------------------------------------------|

|                                    |         |                      Direct      |                   Ceded     |            Net       |
|-----------------------------------------|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------|
|  Loss and loss adjustment expenses | $139,259,179 | $70,563,627                                                                                                                                                   | $68,695,552                                                                                                                          |
|  Premiums earned                   |         | $401,605,845                                                                                                                                                  | $293,713,719                                                                                                                         | $107,892,126                                                                                         |
|  Loss & LAE ratios             |         | 34.7%                                                                                                                                                         | 24.0%                                                                                                                                | 63.7%                                                                                                |

----

----

|                                    |        |  Three months ended September 30, 2010                                                                        |
|-----------------------------------------|-------------|--------------------------------------------------------------------------------------------------------------------|
|                                    |        |               Direct     |             Ceded    |             Net      |
|  Loss and loss adjustment expenses | $59,511,679 | $30,141,554                                                                                                        | $29,370,126 |
|  Premiums earned                   |        | $162,093,491                                                                                                       | $113,262,337 | $48,831,154 |
|  Loss & LAE ratios             |        | 36.7%                                                                                                              | 26.6% | 60.1% |
|                                    |        |                                                                                                               |   |   |
|                                    |        |                                                                                                               |   |   |
|                                    |        |  Three months ended September 30, 2009                                                                        |
|                                    |        |           Direct                             |            Ceded     |            Net      |
|  Loss and loss adjustment expenses | $48,330,038 | $24,561,309                                                                                                        | $23,768,729 |
|  Premiums earned                   |        | $139,207,538                                                                                                       | $106,449,802 | $32,757,736 |
|  Loss & LAE ratios             |        | 34.7%                                                                                                              | 23.1% | 72.6% |

----

|   | ● | The increase in cash provided by operating activities of $47,177,169 from net proceeds of trading securities purchased and sold during the 2010 third quarter period.  As part of the previously described reclassification of the Company’s available-for-sale investment portfolio to a trading portfolio, effective July 1, 2010, the net proceeds from the sales and purchases of securities in the trading portfolio are recorded as cash flows from operating activities.  The comparable amounts for purchases and sales of available-for-sale securities are recorded as cash flows form investing activities. |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   | ● | The increase in cash provided by operating activities from net changes in unearned premiums were $67,933,901 and $35,004,845 for the nine-month periods ended September 30, 2010 and 2009, respectively.  The increase of $32,929,056 relates primarily to an increase in direct written premiums.                                                                                                                                                                                                                                                                                                                                     |
|   |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   | ● | Cash used in operating activities from net changes in reinsurance payable was $5,172,264 for the nine-month period ended September 30, 2010 compared to cash provided by operating activities from net changes in reinsurance payable of $55,964,083 for the nine-month period ended September 30, 2009.  The decrease in cash provided of $61,136,347 relates primarily to the timing of the settlement of balances with UPCIC’s reinsurers.                                                                                                                                                                               |

----

|   | ● | The increase in cash provided by operating activities from reinsurance recoverables was $24,480,200 for the nine months ended September 30, 2010 compared to a decrease of $4,621,514 for the nine-month period ended September 30, 2009.  The increase of $29,101,714 relates primarily to the timing of the settlement of balances with UPCIC’s reinsurers.  |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                      |   | Nine Month Ended   |         |
|-------------------------------------------|--------|--------------------|--------------|
|                                      |   | September 30, 2010 |         |   | September 30,2009 |   |
|                                      |   |               |         |   |   |   |
| Balance - January 1                       |   | $                  | 114,797,010  |   |   | $ | 5,648,775 |   |
|                                      |   |               |         |   |   |   |   |   |
| Purchases of fixed maturities             |   |               | 417,122,128  |   |   |   | 206,473,797 |   |
| Purchases of equity securities            |   |               | 141,238,671  |   |   |   | 138,139,475 |   |
| Net amort of prem / accretion of discount |   |               | (404,822     | ) |   |   | (203,653 | ) |
| Sales of fixed maturities                 |   |               | (454,557,173 | ) |   |   | (203,451,919 | ) |
| Sales of equity securities                |   |               | (134,450,698 | ) |   |   | (84,456,340 | ) |
| Realized gains on investments             |   |               | 20,740,617   |   |   |   | 13,588,679 |   |
| Foreign currency gains on investments     |   |               | 834,529      |   |   |   | 6,108,112 |   |
| Unrealized (losses) gains                 |   |               | (964,250     | ) |   |   | 7,514,045 |   |
|                                      |   |               |         |   |   |   |   |   |
| Balance - September 30                    |   | $                  | 104,356,012  |   |   | $ | 89,360,971 |   |

----

----

----

----

----

----

----

----

----

----

|                                                                              |   | For the Nine Months Ended September 30, |     |
|-----------------------------------------------------------------------------------|--------|-----------------------------------------|----------|
|                                                                              |   | 2010                                    |     |   | 2009 |   |
| Cash and cash equivalents                                                         |   | $                                       | 109,150  |   |   | $ | 253,073 |   |
| Fixed maturities                                                                  |   |                                    | 710,325  |   |   |   | 1,136,568 |   |
| Equity securities                                                                 |   |                                    | 36,530   |   |   |   | 634,362 |   |
|      Total investment income                             |   |                                    | 856,005  |   |   |   | 2,024,003 |   |
| Less investment expenses                                                          |   |                                    | (479.430 | ) |   |   | (638,996 | ) |
|                                                                              |   |                                    |     |   |   |   |   |   |
|           Net investment income |   | $                                       | 376,575  |   |   | $ | 1,385,007 |   |
|                                                                              |   |                                    |     |   |   |   |   |   |

|                                                               |   | September 30, 2010 |   |   | December 31, 2009 |   |
|--------------------------------------------------------------------|--------|--------------------|--------|--------|-------------------|--------|
|                                                               |   | Carrying           |   |   | Percent           |   |   | Carrying |   |   |   | Percent |   |
|                                                               |   | Amount             |   |   | of Total          |   |   | Amount |   |   |   | of Total |   |
| Available for sale                                                 |   |               |   |   |              |   |   |   |   |   |   |   |   |
| Fixed maturities, at fair value:                                   |   |               |   |   |              |   |   |   |   |   |   |   |   |
|      US government and agency obligations |   |  $            | -      |   |              |   | 0.0 | % |   |  $ | 41,389,008 |   |   |   |   | 36.1 | % |
|      Foreign obligations                  |   |               | -      |   |              |   | 0.0 | % |   |   | - |   |   |   |   | 0.0 | % |
|                                                               |   |               |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |
| Equity securities, at fair value:                                  |   |               |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |
|      Commodities                          |   |               | -      |   |              |   | 0.0 | % |   |   | 56,961,180 |   |   |   |   | 49.6 | % |
|      Common stock                         |   |               | -      |   |              |   | 0.0 | % |   |   | 16,446,822 |   |   |   |   | 14.3 | % |
|                                                               |   |               |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |
| Total investments                                                  |   | $                  | -      |   |              |   | 0.00 | % |   | $ | 114,797,010 |   |   |   |   | 100.00 | % |

|                                                               |   | September 30, 2010 |        |   | December 31, 2009 |   |
|--------------------------------------------------------------------|--------|--------------------|-------------|--------|-------------------|--------|
|                                                               |   | Carrying           |        |   | Percent           |   |   | Carrying |   |   |   | Percent |   |
|                                                               |   | Amount             |        |   | of Total          |   |   | Amount |   |   |   | of Total |   |
| Trading                                                            |   |               |        |   |              |   |   |   |   |   |   |   |   |
| Fixed maturities, at fair value:                                   |   |               |        |   |              |   |   |   |   |   |   |   |   |
|      US government and agency obligations |   |  $            | 3,465,332   |   |              |   | 3.3 | % |   |  $ | - |   |   |   |   | 0.0 | % |
|      Foreign obligations                  |   |               | 6,173,911   |   |              |   | 5.9 | % |   |   | - |   |   |   |   | 0.0 | % |
|                                                               |   |               |        |   |              |   |   |   |   |   |   |   |   |   |   |   |   |
| Equity securities, at fair value:                                  |   |               |        |   |              |   |   |   |   |   |   |   |   |   |   |   |   |
|      Commodities                          |   |               | 88,388,400  |   |              |   | 80.9 | % |   |   | - |   |   |   |   | 0.0 | % |
|      Common stock                         |   |               | 10,328,369  |   |              |   | 9.9 | % |   |   | - |   |   |   |   | 0.0 | % |
|                                                               |   |               |        |   |              |   |   |   |   |   |   |   |   |   |   |   |   |
| Total investments                                                  |   | $                  | 104,356,012 |   |              |   | 100.00 | % |   | $ | - |   |   |   |   | 0.00 | % |

----

|                                   |   | September 30, 2010 |   |   | December 31, 2009    |   |
|----------------------------------------|--------|--------------------|--------|--------|----------------------|--------|
| Available for sale                     |   | Amortized Cost     |   |   | Estimated Fair Value |   |   | Amortized Cost |   |   | Estimated Fair Value |   |
| Due in one year or less                |   | $                  | -      |   |                 | $      | - |   |   | $ | - |   |   | $ | - |   |
| Due after one year through five years  |   |               | -      |   |                 |   | - |   |   |   | 176,350 |   |   |   | 180,901 |   |
| Due after five years through ten years |   |               | -      |   |                 |   | - |   |   |   | 2,909,446 |   |   |   | 2,942,497 |   |
| Due after ten years                    |   |               | -      |   |                 |   | - |   |   |   | 39,210,931 |   |   |   | 38,265,610 |   |
|                                   |   |               |   |   |                 |   |   |   |   |   |   |   |   |   |   |   |
|      Total    |   | $                  | -      |   |                 | $      | - |   |   | $ | 42,296,727 |   |   | $ | 41,389,008 |   |

|                                   |   | September 30, 2010 |      |   | December 31, 2009    |   |
|----------------------------------------|--------|--------------------|-----------|--------|----------------------|--------|
| Trading                                |   | Amortized Cost     |      |   | Estimated Fair Value |   |   | Amortized Cost |   |   | Estimated Fair Value |   |
| Due in one year or less                |   | $                  | 3,356,843 |   |                 | $      | 3,393,067 |   |   | $ | - |   |   | $ | - |   |
| Due after one year through five years  |   |               | 2,889,897 |   |                 |   | 2,961,866 |   |   |   | - |   |   |   | - |   |
| Due after five years through ten years |   |               | 3,019,144 |   |                 |   | 3,284,310 |   |   |   | - |   |   |   | - |   |
| Due after ten years                    |   |               | -         |   |                 |   | - |   |   |   | - |   |   |   | - |   |
|                                   |   |               |      |   |                 |   |   |   |   |   |   |   |   |   |   |   |
|      Total    |   | $                  | 9,265,884 |   |                 | $      | 9,639,243 |   |   | $ | - |   |   | $ | - |   |

----

| Exhibit No. | Exhibit                                                                                                                        |
|-------------|--------------------------------------------------------------------------------------------------------------------------------|
| 3.1         | Registrant’s Restated Amended and Restated Certificate of Incorporation (1)                                              |
|        |                                                                                                                           |
| 3.2         | Certificate of Designation for Series A Convertible Preferred Stock dated October 11, 1994 (2)                            |
| 3.3         | Certificate of Designations, Preferences, and Rights of Series M Convertible Preferred Stock dated August 13, 1997 (3)    |
| 3.4         | Certificate of Amendment of Amended and Restated Certificate of Incorporation dated October 19, 1998 (2)                  |
| 3.5         | Certificate of Amendment of Amended and Restated Certificate of Incorporation dated December 18, 2000 (2)                 |
| 3.6         | Certificate of Amendment of Certificate of Designations of the Series A Convertible Preferred Stock dated October 29, 2001 (2) |
|        |                                                                                                                           |
| 3.7         | Certificate of Amendment of Amended and Restated Certificate of Incorporation dated December 7, 2005 (4)                       |
|        |                                                                                                                           |

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| 3.8    | Certificate of Amendment of Amended and Restated Certificate of Incorporation dated May 18, 2007 (4)                                                                                              |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                              |
| 3.9    | Amended and Restated Bylaws (5)                                                                                                                                                              |
| 31.1   | Certification of Chief Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                               |
|   |                                                                                                                                                                                              |
| 31.2   | Certification of Chief Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                               |
|   |                                                                                                                                                                                              |
| 32     | Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Title 18, United States Code, Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
|   |                                                                                                                                                                                              |
| 99.1   | Schedule of Investments                                                                                                                                                                           |

| (1) | Incorporated by reference to the Registrant’s Registration Statement on Form S-1 (File No. 33-51546) declared effective on December 14, 1992 |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Incorporated by reference to the Registrant’s Annual Report on Form 10-KSB for the year ended December 31, 2002 |
|-----|-----------------------------------------------------------------------------------------------------------------------|

| (3) | Incorporated by reference to the Registrant’s Annual Report on Form 10-KSB/A for the year ended April 30, 1997 |
|-----|----------------------------------------------------------------------------------------------------------------------|

| (4) | Incorporated by reference to the Registrant’s Quarterly Report on Form 10-QSB for period ended June 30, 2007 |
|-----|--------------------------------------------------------------------------------------------------------------------|

| (5) | Incorporated by reference to the Registrant’s Current Report on Form 8-K dated January 8, 2007 |
|-----|------------------------------------------------------------------------------------------------------|

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|                                                                                    |   | UNIVERSAL INSURANCE HOLDINGS, INC.                                                   |
|-----------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------|
|                                                                                    |   |                                                                                 |
|                                                                                    |   |                                                                                 |
| Date:           November 9, 2010 |   | /s/ Bradley I. Meier                                                                 |
|                                                                                    |   | Bradley I. Meier, President and Chief Executive Officer                              |
|                                                                                    |   |                                                                                 |
|                                                                                    |   |                                                                                 |
|                                                                                    |   | /s/ George R. De Heer                                                                |
|                                                                                    |   | George R. De Heer,  Chief Financial Officer (Principal Accounting Officer) |