S-3/A

Registration No. 333-135041

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

AMENDMENT NO. 1

TO

FORM S-3

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

AMERINST INSURANCE GROUP, LTD.

(Exact name of Registrant as specified in its charter)

BERMUDA

(State or other jurisdiction of incorporation or organization)

98-0207447

(IRS Employer Identification No.)

c/o USA Risk Group (Bermuda) Ltd.

Windsor Place, 18 Queen Street, 2^nd Floor

P.O. Box HM 1601, Hamilton, Bermuda, HMGX

(441) 296-3973

(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

Stuart H. Grayston, President

AmerInst Insurance Group, Ltd.

c/o USA Risk Group (Bermuda) Ltd.

Windsor Place, 18 Queen Street, 2^nd Floor

P.O. Box HM 1601, Hamilton, Bermuda, HMGX

(441) 296-3973

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copy to:

J. Craig Walker, Esq.

Bell, Boyd & Lloyd LLC

70 W. Madison St., Suite 3100

Chicago, IL 60602-4207

(312) 807-4321

Approximate date of commencement of proposed sale to the public: as soon as practicable following the effective date of this registration statement.

If the only securities being registered on this form are being offered pursuant to dividend or interest reinvestment plans, please check the following box.  ¨

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box.  x

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

If this form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box.  ¨

If this form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box.  ¨

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

Amending Part II, Items 15 and 16 and filing Exhibits 5.1, 99.1, 99.2, 99.3, 99.4 and 99.5.

PART II. INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS

AmerInst Insurance Group, Ltd. is a Bermuda company. Section 98 of the Companies Act 1981 of Bermuda, as amended, provides that a company may in its bye-laws or in any contract or arrangement between the company and any officer or any person employed by the company as auditor, exempt such officer or person from, or indemnify him in respect of any loss arising or liability attaching to him by virtue of any rule of law in respect of any negligence, default, breach of duty or breach of trust of which the officer or person may be guilty in relation to the company or any subsidiary thereof. Section 98 (2) further provides that any such arrangements which purport to exempt or indemnify such officer or person from liability which by virtue of any rule of law would otherwise attach to him in respect of any fraud or dishonesty of which he may be guilty in relation to the company shall be void.

Bye-law 30 of AmerInst Insurance Group, Ltd.’s bye-laws contain extensive indemnification provisions which provide that the Company shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending, or completed action, suit, or proceeding, including all appeals, by or in the right of the Company to procure a judgment in its favor by reason of the fact that he is or was a Director or Officer, or is or was serving at the request of the Company as a director or officer of another company, corporation, partnership, joint venture, trust, or other enterprise, against expenses (including, without limitation, reasonable professional fees, expert witness fees, and attorneys’ fees) actually and reasonably incurred by him in connection with the defense or settlement of such action, suit, or proceeding if he acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interests of the Company.

The Bye-laws also provide that the Company shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending, or completed action, suit, or proceeding, including all appeals, by or in the right of the Company to procure a judgment in its favor by reason of the fact that he is or was a Director or Officer, or is or was serving at the request of the Company as a director or officer of another company, corporation, partnership, joint venture, trust, or other enterprise, against judgments, decrees, fines, penalties, and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit, or proceeding if he acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interests of the Company, but only to the extent that a court determines upon application that, in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity.

Bye-law 30(4) makes it clear that the indemnification provisions under Bye-law 30 shall not extend to any matter in respect of any fraud or dishonesty which may attach to the persons otherwise indemnified.

Bye-law 30 (6) provides that any indemnification under Bye-law 30, unless ordered by a court, shall be made by the Company only as authorized in the specific case upon a determination that indemnification of the Director or Officer is proper in the circumstances because he has met the applicable standard of conduct set forth in Bye-law 30. Such determination shall be made (i) by the Board by a majority vote of a quorum consisting of Directors who were not parties to such action, suit, or proceeding, or (ii) if such quorum is not obtainable, or even if obtainable, a quorum of disinterested Directors so directs, by an independent legal counsel in a written opinion, or (iii) by the Members.

Expenses (including attorneys’ fees) actually and reasonably incurred by any person in defending any civil, criminal, administrative, or investigative action, suit, or proceeding, shall be paid by the Company in advance of the final disposition of such action, suit, or proceeding upon receipt of an undertaking by or on behalf of such person to repay such amount if it shall be ultimately determined that he is not entitled to be indemnified by the Company as authorized in the Bye-Laws or otherwise pursuant to applicable law; provided, however, that if it is determined by either (i) a majority vote of a quorum of the Board consisting of directors who were not parties to such action, suit, or proceeding, or (ii) if such quorum is not obtainable, or even if obtainable, a quorum of

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disinterested Directors so directs, by independent legal counsel in a written opinion, that there is a reasonable basis to believe that such person is not entitled to be indemnified by the Company as authorized in the Bye-Laws or otherwise pursuant to applicable law, then no expenses shall be advanced.

The indemnification and advancement of expenses provided in Bye-law 30 shall not be deemed exclusive of any other rights to which those seeking indemnification and advancement of expenses may now or hereafter be entitled under any statute, agreement, vote of members or otherwise, both as to action in an official capacity and as to action in another capacity while holding such office.

We currently maintain an insurance policy which, within the limits and subject to the terms and conditions thereof, covers certain expenses and liabilities that may be incurred by directors and officers in connection with actions, suits or proceedings that may be brought against them as a result of an act or omission committed or suffered while acting as a director or officer.

ITEM 16. EXHIBITS

See the Exhibit Index immediately following the signature page, which is incorporated herein by reference.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Hamilton, Bermuda, on July 19, 2006.

AMERINST INSURANCE GROUP, LTD.
By:	/s/     STUART H. GRAYSTON
	Stuart H. Grayston
	President and chief executive officer

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

NAME AND SIGNATURE	TITLE	DATE
/s/    STUART H. GRAYSTON Stuart H. Grayston	President (Principal Executive Officer), Director	July 19, 2006
/s/    MURRAY NICOL         Murray Nicol, CA	Vice President, Treasurer and Director (Principal Financial Officer and Principal Accounting Officer)	July 18, 2006
/s/    *         Ronald S. Katch, CPA	Chairman of the Board	July 19, 2006
/s/    *         Jerome A. Harris, CPA	Vice-Chairman, Director	July 19, 2006
/s/    * Jerrell A. Atkinson, CPA	Director	July 19, 2006
/s/    *         Irvin F. Diamond, CPA	Director	July 19, 2006
/s/    *         Jeffry I. Gillman, CPA	Director	July 19, 2006
/s/    *         John T. Schiffman, CPA	Director	July 19, 2006
/s/    *         David N. Thompson, CPA	Director	July 19, 2006

*By:	/S/    STUART H. GRAYSTON
	Stuart H. Grayston Attorney-in-fact

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EXHIBIT INDEX

EXHIBIT NUMBER	DESCRIPTION OF EXHIBIT
5.1	Opinion of counsel
23.1*	Consent of Deloitte & Touche
23.2	Consent of counsel to the company (included in Exhibit 5.1)
24.1*	Power of attorney (included in signature page)
99.1	Form of Transmittal Letter
99.2	Form of Instructions as to Use of AmerInst Subscription Rights Certificates and Oversubscription Right Exercise Forms
99.3	Form of Subscription Rights Certificate
99.4	Form of Oversubscription Right Exercise Form
99.5	Form of Letter Regarding Oversubscription Right

* Previously filed

E-1

EX-5.1

Exhibit 5.1

MILNER HOUSE 18 PARLIAMENT STREET P.O. BOX HM 1561 HAMILTON HM FX BERMUDA TELEPHONE: (441) 295-4630 FAX: (441) 292-7880 WEBSITE: WWW.CHW.COM

19th July, 2006

AmerInst Insurance Group, Ltd.

c/o USA Risk Group (Bermuda) Ltd.

Windsor Place, 18 Queen Street, 2^nd Floor

P.O. Box HM 1601, Hamilton, Bermuda, HMGX

Dear Sirs,

AmerInst Insurance Group, Ltd. (the “Company”) -Registration Statement on Form S-3

We have acted as special counsel for the Company in connection with the preparation and filing with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the “Securities Act”), of a registration statement on Form S-3, (the “Registration Statement”) relating to the registration of subscription rights covering the purchase of up to 995,253 common shares of the Company, par value $1.00 per share being offered pursuant to the terms of the Registration Statement. The first 322,587 common shares being sold in the rights offering pursuant to the Registration Statement are to be sold by the Company’s indirect wholly owned subsidiary, AmerInst Investment Company, Ltd. (“Investco Shares”). If subscriptions are received by the Company for more than the Investco Shares, such excess number will consist of newly issued common shares of the Company (which shall not exceed 672,666) (the “Company Shares”).

For the purposes of giving this opinion we have examined and relied upon:

(i) A copy of the Registration Statement;

(ii) A copy of the share register of the Company as certified by Butterfield Fund Services Ltd., the Registrar and Transfer Agent of the Company on July 19th, 2006;

(iii) A copy of a resolution of the Board of Directors of Investco approving the sale of Investco Shares contemplated by the Registration Statement as certified by the Secretary of the Company on 1^st June, 2006;

(iv) A copy of the resolutions of the Board of Directors and shareholders of the Company approving an increase in the authorized capital of the Company as certified by the Secretary of the Company on 1^st June, 2006;

June 2006

(v) A copy of an extract of resolutions of the Board of Directors of the Company passed on 2^nd March 2006 in connection with a share dividend to shareholders of record as certified by the Secretary of the Company on 14^th June, 2006; and

(vi) A copy of the resolutions of the Board of Directors of the Company approving the rights offering as contemplated by the Registration Statement.

We have also made such enquiries as to questions of Bermuda law and satisfied ourselves as to such matters of fact, as we have deemed necessary in order to render the opinions set forth below.

Based on the foregoing, we are of the opinion that:

1. The Company is duly incorporated and validly existing under the laws of Bermuda.

2. The Company Shares have been legally authorized and, upon subscription and payment by the Shareholders pursuant to the terms set forth in the Registration Statement and the receipt by the Company of the subscription proceeds, the Company Shares will be legally issued, fully paid and non-assessable in the sense that no further amounts will be due and payable on the Company Shares.

3. The Investco Shares are legally issued, fully paid and non-assessable in the sense that no further amounts will be due and payable on the Investco Shares.

This opinion is given on the basis of Bermuda law in existence as at the date hereof.

We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to all references to our firm included in or made a part of the Registration Statement. In giving this consent, we do not admit that we are within the category of persons whose consent is required by Section 7 of the Securities Act. This opinion is not to be otherwise used, circulated, quoted or referred to for any other purpose or relied upon by any other person without our express written permission.

Yours faithfully,

COX HALLETT WILKINSON

EX-99.1

Exhibit 99.1

FORM OF TRANSMITTAL LETTER

NONTRANSFERABLE SUBSCRIPTION RIGHTS FOR UP TO

995,253 COMMON SHARES

OF AMERINST INSURANCE GROUP, LTD.

DISTRIBUTED TO HOLDERS OF RECORD OF THE COMPANY’S COMMON SHARES

THE RIGHTS OFFERING WILL EXPIRE AT 5:00 P.M., EASTERN TIME, ON SEPTEMBER 1, 2006, UNLESS

THE RIGHTS OFFERING IS EXTENDED

                    , 2006

Dear Shareholder:

AmerInst Insurance Group, Ltd. (the “Company”) is pleased to provide details on the Company’s rights offering (the “Rights Offering”) to the holders of record of its common shares, par value $1.00 per share, as of the close of business on April 2, 2006 (the “Record Date”), as described in the enclosed Prospectus, dated                 , 2006 (the “Prospectus”). Shareholders of the Company on the Record Date are receiving subscription rights (the “Rights”) to subscribe for and purchase common shares of the Company. The Rights are described in detail in the Prospectus. Eligible shareholders will receive one Right for each common share held on the Record Date (giving effect to the share dividend distributed on July 3, 2006).

The Rights will be evidenced by nontransferable Rights certificates (the “Subscription Rights Certificates”). As described in the accompanying Prospectus, each Right will entitle its holder to subscribe for one common share (the “Basic Subscription Right”). The subscription price for the common shares is $23.33 per share. In addition, each holder who exercises his or her Basic Subscription Right in full will be eligible to subscribe at the same price for common shares that are not otherwise purchased pursuant to the exercise of Rights by other shareholders, subject to availability and pro rata allocation as described below and more fully in the Prospectus (the “Oversubscription Right”).

The Oversubscription Right gives a holder of Rights the opportunity to purchase additional shares in the event that other shareholders do not exercise all of their Basic Subscription Rights. The Oversubscription Right entitles each Rights holder to subscribe for additional shares, not to exceed the difference between (i) the maximum number of shares permitted under the Company’s ownership limitation (12,000 shares) and (ii) the total of the number of common shares currently owned by such Rights holder and the number of shares purchased pursuant to such Rights holder’s Basic Subscription Right, subject to proration, as more fully described in the Prospectus.

The Oversubscription Right will only be available to a holder of Rights if the holder of Rights fully exercises his or her Basic Subscription Rights. Although each holder of Rights is guaranteed the right, pursuant to his or her Basic Subscription Right, to purchase that number of shares equal to the number of Rights received in the offering, the holder may not be able to purchase all (or possibly any) of the shares such holder seeks to purchase pursuant to his or her Oversubscription Right. See “The Rights Offering – The Subscription Rights – Oversubscription Right” in the Prospectus.

If you exercise your Basic Subscription Right in full, then as soon as practicable after the Expiration Date (as hereinafter defined), USA Risk Group of Vermont, Inc., acting as our “Subscription Agent,” will notify you of the number of shares subject to oversubscription rights. If you have exercised your Basic Subscription Right in full and wish to exercise your Oversubscription Right, you must exercise your Oversubscription Right by October 4, 2006 (the “Oversubscription Deadline”). If you exercise your Oversubscription Right by the Oversubscription Deadline, then as soon as practicable after the Oversubscription Deadline, the Subscription Agent will determine the number of shares that you will be deemed to purchase pursuant to your Oversubscription Right. You will receive a certificate representing our common shares you purchase as soon as practicable thereafter. Subject to state securities laws and regulations, we have the discretion to delay allocation and distribution of any and all shares to shareholders who are affected by such regulations and elect to participate in the Rights Offering, including shares that we issue with respect to your Basic Subscription Right or Oversubscription Right, in order to comply with state securities laws. If you request and pay for more shares than are allocated to you, that overpayment will be held by the Subscription Agent pending the completion of this Rights Offering and will be refunded to you, without interest, promptly thereafter.

Enclosed are copies of the following documents:

1. the Prospectus;

2. Instructions as to Use of AmerInst Subscription Rights Certificates and Oversubscription Right Exercise Forms;

3. your Subscription Rights Certificate; and

4. a return envelope addressed to USA Risk Group of Vermont, Inc., the subscription agent for the Rights Offering.

The Prospectus describes the Rights Offering and the procedure to follow if you choose to exercise your Rights. Please read the Prospectus and other enclosed materials carefully.

Your prompt action is requested. The Rights Offering will expire at 5:00 p.m., Eastern time, on September 1, 2006, unless extended by the Company in its sole discretion (the “Expiration Date”). The Company may terminate the Rights Offering at any time prior to the Expiration Date for any reason.

To exercise your Rights, you must deliver a properly completed and executed Subscription Rights Certificate and payment in full for all of the common shares subscribed for pursuant to your Basic Subscription Rights to the Subscription Agent prior to the Expiration Date, as indicated in the Prospectus.

A Rights holder cannot revoke the exercise of its Rights (though the holder may increase the number of shares for which the right is exercised, as set forth in the prospectus). Rights not exercised prior to the Expiration Date will expire.

Additional copies of the enclosed materials may be obtained from USA Risk Group of Vermont, Inc., P.O. Box 1330, Montpelier, Vermont, 05601-1330, (800) 422-8141.

We are pleased to offer you this opportunity and hope that you will consider a further investment in the Company.

Sincerely,

Stuart H. Grayston

President

EX-99.2

Exhibit 99.2

Nontransferable Subscription Rights for up to

995,253 Common Shares

of AmerInst Insurance Group, Ltd.

The Rights Offering Will Expire at 5:00 p.m., Eastern Time, on September 1, 2006, Unless the

Rights Offering is Extended

INSTRUCTIONS AS TO USE OF AMERINST SUBSCRIPTION RIGHTS CERTIFICATES AND

OVERSUBSCRIPTION RIGHT EXERCISE FORMS

Consult USA Risk Group of Vermont, Inc. with any Questions

The following instructions relate to a rights offering (the “Rights Offering”) by AmerInst Insurance Group, Ltd., a holding company based in Bermuda (“we,” “us,” “our,” or the “Company”), to the holders of record (“Record Holders”) of its common shares, par value $1.00 per share, as of the close of business on April 2, 2006 (the “Record Date”), as described in the Company’s Prospectus dated                     , 2006 (the “Prospectus”). Record Holders on the Record Date are receiving subscription rights (the “Rights”) to subscribe for and purchase common shares of the Company.

Record Holders will receive one Right for each common share held on the Record Date (giving effect to the share dividend distributed on July 3, 2006).

The Rights will expire if they are not exercised by 5:00 p.m., Eastern time, on September 1, 2006. The Company, in its sole discretion, may extend the period for exercising the Rights (as it may be extended, the “Expiration Date”).

After the Expiration Date, unexercised Rights will be null and void. The Company will not be obligated to honor any purported exercise of Rights received by USA Risk Group of Vermont, Inc. (the “Subscription Agent”) after the Expiration Date, regardless of when the documents relating to such exercise were sent. The Company may extend the Expiration Date by giving oral or written notice to the Subscription Agent before the Expiration Date. If the Company extends the Expiration Date, the Company will issue a press release announcing the extension no later than 9:00 a.m., Eastern time, on the next business day after the most recently announced Expiration Date. The Company may, in its sole discretion, withdraw or terminate the Rights Offering at any time prior to the Expiration Date.

The Rights will be evidenced by nontransferable Rights certificates (the “Subscription Rights Certificates”).

Each Right will entitle its holder to subscribe for one common share (the “Basic Subscription Right”). The subscription price (the “Subscription Price”) is $23.33 per common share.

The number of Rights to which you are entitled is printed on the face of your Subscription Rights Certificate. You should indicate your wishes with regard to the exercise of your Rights by completing your Subscription Rights Certificate and returning it to the Subscription Agent in the envelope provided pursuant to the procedures described in these Instructions and in the Prospectus.

YOUR SUBSCRIPTION RIGHTS CERTIFICATE AND SUBSCRIPTION PRICE PAYMENT MUST BE RECEIVED BY THE SUBSCRIPTION AGENT ON OR BEFORE 5:00 P.M., EASTERN TIME, ON SEPTEMBER 1, 2006. ONCE YOU HAVE EXERCISED YOUR BASIC SUBSCRIPTION RIGHTS, YOUR EXERCISE MAY NOT BE REVOKED (THOUGH YOU MAY INCREASE THE NUMBER OF SHARES FOR WHICH THE RIGHT IS EXERCISED, AS SET FORTH IN THE PROSPECTUS). BASIC SUBSCRIPTION RIGHTS NOT EXERCISED PRIOR TO THE EXPIRATION DATE WILL EXPIRE.

In addition, if you exercise your Basic Subscription Rights in full, you will be eligible to subscribe at the same price for common shares that are not otherwise purchased pursuant to the exercise of Rights by other shareholders (the “Excess Shares”), subject to availability and pro rata allocation as described below and more fully in the Prospectus (the “Oversubscription Right”).

The Oversubscription Right will only be available to you if you fully exercise your Basic Subscription Rights. If there are not enough Excess Shares to satisfy all subscriptions made under the Oversubscription Right, the Company will allocate the remaining Excess Shares pro rata, after rounding fractional shares up to the nearest whole share, among those Rights holders who exercised their Oversubscription Rights. “Pro rata” means in proportion to the amount of subscription price tendered by each Rights holder who wishes to exercise his or her Oversubscription Rights prior to 5:00 p.m., Eastern time, on October 4, 2006 (the “Oversubscription Deadline”). If there is a pro rata allocation of the remaining Excess Shares and you receive an allocation of a greater number of shares than you subscribed for under your Oversubscription Right, then the Company will allocate to you only the number of Excess Shares for which you subscribed. See “The Rights Offering – The Subscription Rights” in the Prospectus.

If you have been notified by the Subscription Agent that you are eligible to purchase shares pursuant to your Oversubscription Right and you are interested in exercising your Oversubscription Right, you should indicate your wishes with regard to the exercise of your Oversubscription Right by completing your Oversubscription Right Exercise Form and returning it to the Subscription Agent in the envelope provided pursuant to the procedures described in these Instructions and in the Prospectus.

YOUR OVERSUBSCRIPTION RIGHT EXERCISE FORM AND SUBSCRIPTION PRICE PAYMENT MUST BE RECEIVED BY THE SUBSCRIPTION AGENT ON OR BEFORE 5:00 P.M., EASTERN TIME, ON OCTOBER 4, 2006. ONCE YOUR HAVE EXERCISED YOUR OVERSUBSCRIPTION RIGHT, YOUR EXERCISE MAY NOT BE REVOKED (THOUGH YOU MAY INCREASE THE NUMBER OF SHARES FOR WHICH THE RIGHT IS EXERCISED, AS SET FORTH IN THE PROSPECTUS). IF YOUR OVERSUBSCRIPTION RIGHT IS NOT EXERCISED PRIOR TO THE OVERSUBSCRIPTION DEADLINE THE OVERSUBSCRIPTION RIGHT WILL EXPIRE.

For more complete information on the terms of the Rights Offering, please see the discussion set forth under the headings “PROSPECTUS SUMMARY — The Rights Offering” and “The Rights Offering” in the Prospectus. Questions may be answered, and additional copies of relevant documents, including the Prospectus, may be obtained, by contacting the Subscription Agent at the following address: USA Risk Group of Vermont, Inc., P.O. Box 1330, Montpelier, Vermont, 05601-1330, (800) 422-8141.

1. How to Exercise Your Rights

Basic Subscription Rights. To exercise your Basic Subscription Rights, complete your Subscription Rights Certificate and send the properly completed and executed Subscription Rights Certificate evidencing such Rights, together with payment in full of the Subscription Price for each common share subscribed for pursuant to your Basic Subscription Rights, to the Subscription Agent, on or prior to 5:00 p.m., Eastern time, on September 1, 2006 (the “Expiration Date”).

Oversubscription Right. If you exercise your Basic Subscription Right in full, then as soon as practicable after the Expiration Date, USA Risk Group of Vermont, Inc., acting as our “Subscription Agent,” will notify you

of the number of shares subject to oversubscription rights. If you have exercised your Basic Subscription Right in full and wish to exercise your Oversubscription Right, you must exercise your Oversubscription Right on or prior to 5:00 p.m., Eastern time, on October 4, 2006 (the “Oversubscription Deadline”). If you have fully exercised your Basic Subscription Rights, and desire to exercise your Oversubscription Right, complete your Oversubscription Right Exercise Form and send the properly completed and executed Oversubscription Right Exercise Form evidencing such Right, together with payment in full of the Subscription Price for each common share subscribed for pursuant to your Oversubscription Right, to the Subscription Agent prior to the Oversubscription Deadline.

Payments. Payments of the Subscription Price for the Basic Subscription Rights and the Oversubscription Right will be held in a segregated account to be maintained by the Subscription Agent. All payments must be made in U.S. dollars for the full number of common shares being subscribed for (a) by check or bank draft drawn upon a U.S. bank or postal, telegraphic, or express money order payable to “USARGVT for AmerInst”, or (b) by wire transfer of immediately available funds, to the account maintained by the Subscription Agent for purposes of accepting subscriptions in the Rights Offering (the “Subscription Account”) at:

TD Banknorth, N.A.

011 600 033-ABA

Account No. 5241216482

Account Name-USA Risk Group of Vermont, Inc. FBO AmerInst Insurance Group, Ltd.

Rights Offering

Bank Contact: Gail Cromie, phone-802-652-3244, fax-802-652-3230

Any wire transfer should clearly indicate the identity of the subscriber who is paying the Subscription Price by the wire transfer. Payments will be deemed to have been received by the Subscription Agent only upon (i) receipt by the Subscription Agent of a personal check, or of a certified check or bank draft drawn upon a U.S. bank, or of any postal, telegraphic, or express money order, or (ii) receipt of collected funds in the Subscription Account.

Acceptance of Payments and Documents; Method of Delivery. The Subscription Rights Certificate and payment of the Subscription Price for the Basic Subscription Rights (if made other than by wire transfer), or the Oversubscription Right Exercise Form and payment of the Subscription Price for the Oversubscription Right (if made other than by wire transfer), as applicable, must be delivered to the Subscription Agent by one of the methods described below:

For delivery by mail:

USA Risk Group of Vermont, Inc.

P.O. Box 1330

Montpelier, Vermont 05601-1330

By hand delivery or overnight courier:

USA Risk Group of Vermont, Inc.

2386 Airport Road

Barre, Vermont 05641

Delivery to an address other than to an address set forth above will not constitute valid delivery. For assistance, call the Subscription Agent at (800) 422-8141.

The method of delivery of Subscription Rights Certificates or the Oversubscription Right Exercise Form, as applicable, and payment of the Subscription Price to the Subscription Agent will be at your election and risk, but, if sent by mail, we recommend that you send such certificates and payments by registered mail, properly insured, with return receipt requested, and that you allow a sufficient number of days to ensure delivery to the Subscription Agent prior to the Expiration Date or the Oversubscription Deadline, as applicable.

Fractional Shares. You will not be permitted to purchase fractional common shares pursuant to the exercise of the Rights. We will accept any inadvertent subscription indicating a purchase of fractional shares by rounding down to the nearest whole share number and, as soon as practicable, refunding without interest any payment received for a fractional share. In any allocation of Excess Shares pro rata in connection with the exercise of Oversubscription Rights, we will round any fractional shares up to the nearest whole share.

No Subscription Rights Amount; Effect of Over and Underpayments. If you do not indicate the number of Rights being exercised, then you will be deemed to have exercised your Rights with respect to the maximum number of Rights that may be exercised with the aggregate Subscription Price payment you delivered to the Subscription Agent. Similarly, if you do not forward full payment of the total Subscription Price for the number of Rights that you indicate are being exercised, then you will be deemed to have exercised your right for the number of shares covered by the payment you actually submit. If we do not apply your full Subscription Price payment to your purchase of common shares, we will return the excess amount to you by mail without interest as soon as practicable after the completion of the Rights Offering.

2. How to Properly Execute Your Subscription Rights Certificate

The signature on the Subscription Rights Certificate must correspond with the name of the registered holder exactly as it appears on the face of the Subscription Rights Certificate without any alteration or change whatsoever. Persons who sign the Subscription Rights Certificate in a representative or other fiduciary capacity must indicate their capacity when signing and, unless waived by the Subscription Agent in its sole and absolute discretion, must present to the Subscription Agent satisfactory evidence of their authority to so act.

3. How to Properly Execute Your Oversubscription Right Exercise Form

The signature on the Oversubscription Right Exercise Form must correspond with the name of the registered holder exactly as it appears on the face of the Oversubscription Right Exercise Form without any alteration or change whatsoever. Persons who sign the Oversubscription Right Exercise Form in a representative or other fiduciary capacity must indicate their capacity when signing and, unless waived by the Subscription Agent in its sole and absolute discretion, must present to the Subscription Agent satisfactory evidence of their authority to so act.

4. Delivery of the Common Shares That You Purchase in the Offering

The following deliveries and payments will be made to the address shown on the face of your Subscription Rights Certificate.

Basic Subscription Right. As soon as practicable after completion of the Rights Offering, the Subscription Agent will mail to each exercising Rights holder certificates representing common shares purchased pursuant to the Basic Subscription Right. See “The Rights Offering – The Subscription Rights – Basic Subscription Right” in the Prospectus.

Oversubscription Right. As soon as practicable after the Oversubscription Deadline, and after all prorations and adjustments contemplated by the terms of the Rights Offering have been effected, the Subscription Agent will mail to each exercising Rights holder certificates representing common shares, if any, allocated to such Rights holder pursuant to the Oversubscription Right. See “The Rights Offering – The Subscription Rights – Oversubscription Right” in the Prospectus.

Excess Cash Payments. As soon as practicable after the Oversubscription Deadline, and after all prorations and adjustments contemplated by the terms of the Rights Offering have been effected, the Subscription Agent will mail to each Rights holder who exercises the Oversubscription Right any excess amount, without interest, received in payment of the Subscription Price for Excess Shares that are subscribed for by such Rights holder but not allocated to such Rights holder pursuant to the Oversubscription Right. See “The Rights Offering – The Subscription Rights – Return of Excess Payment” in the Prospectus.

5. Rights are Not Transferable

The Rights evidenced by your Subscription Rights Certificate and Oversubscription Right Exercise Form are not transferable, and the Company has not authorized the Subscription Agent to recognize the validity of any purported transfer of Rights.

EX-99.3

Exhibit 99.3

FORM OF SUBSCRIPTION RIGHTS CERTIFICATE

Certificate No.:                  Number of Rights:                 

THE TERMS AND CONDITIONS OF THE RIGHTS OFFERING ARE SET FORTH IN THE COMPANY’S PROSPECTUS, DATED                 , 2006 (THE “PROSPECTUS”), AND ARE INCORPORATED HEREIN BY REFERENCE. COPIES OF THE PROSPECTUS ARE AVAILABLE UPON REQUEST FROM USA RISK GROUP OF VERMONT, INC., THE SUBSCRIPTION AGENT.

AMERINST INSURANCE GROUP, LTD.

ORGANIZED UNDER THE LAWS OF BERMUDA

SUBSCRIPTION RIGHTS CERTIFICATE

EVIDENCING NONTRANSFERABLE SUBSCRIPTION RIGHTS TO PURCHASE

COMMON SHARES

OF AMERINST INSURANCE GROUP, LTD.

SUBSCRIPTION PRICE: $23.33 PER SHARE

THE SUBSCRIPTION RIGHTS WILL EXPIRE IF NOT EXERCISED ON OR BEFORE

5:00 P.M., EASTERN TIME, ON SEPTEMBER 1, 2006,

UNLESS EXTENDED OR THE RIGHTS OFFERING IS TERMINATED

THIS CERTIFIES THAT the registered owner whose name is inscribed hereon is the owner of the number of subscription rights (“Rights”) set forth above, each of which entitles the owner thereof to subscribe for and purchase, at a subscription price of $23.33 per share (the “Subscription Price”), one common share of AmerInst Insurance Group, Ltd., a holding company organized under the laws of Bermuda (the “Company”), pursuant to a rights offering (the “Rights Offering”), on the terms and subject to the conditions set forth in the Prospectus and the “Instructions as to Use of AmerInst Subscription Rights Certificates and Oversubscription Right Exercise Forms” accompanying this Subscription Rights Certificate (the “Basic Subscription Right”).

In order to be eligible to exercise your oversubscription rights, if any, you must FULLY exercise your Basic Subscription Right, as described in the Prospectus and the “Instructions as to Use of AmerInst Subscription Rights Certificates and Oversubscription Right Exercise Forms” accompanying this Subscription Rights Certificate.

The Rights represented by this Subscription Rights Certificate may be exercised by completing the reverse side hereof and returning the full payment of the Subscription Price for each Right to be purchased pursuant to your Basic Subscription Right, in accordance with the “Instructions as to Use of AmerInst Subscription Rights Certificates and Oversubscription Right Exercise Forms” that accompany this Subscription Rights Certificate.

The Rights evidenced by this Subscription Rights Certificate may not be transferred or sold. The Rights will not be listed for trading on any stock exchange or on the OTC bulletin board.

THE RIGHTS MAY NOT BE EXERCISED UNLESS THE REVERSE SIDE HEREOF IS COMPLETED AND SIGNED.

Dated:                                 , 2006

Name and Address of Registered Owner:	AMERINST INSURANCE GROUP, LTD.
	Stuart H. Grayston President

SECTION 1 – EXERCISE AND SUBSCRIPTION

BASIC SUBSCRIPTION RIGHTS

The undersigned irrevocably exercises Basic Subscription Rights to subscribe for common shares of the Company, as indicated below, on the terms and subject to the conditions specified in the Company’s Prospectus, relating to the offering of such Basic Subscription Rights, receipt of which is hereby acknowledged.

To subscribe for shares pursuant to your Basic Subscription Rights, please complete lines (a) and (b) and sign Section 2 below.

(a) I hereby subscribe for                      common shares pursuant to my Basic Subscription Rights.

(b) Total Subscription Price (total shares subscribed for in line (a), multiplied by the Subscription Price of $23.33 per share): $                

METHOD OF PAYMENT (CHECK ONE):

¨ Check or bank draft drawn upon a U.S. bank, or postal, telegraphic, or express money order payable to “USARGVT for AmerInst”

¨ Wire transfer directed to the account maintained by USA Risk Group of Vermont, Inc., as Subscription Agent for AmerInst Insurance Group, Ltd., for purposes of accepting subscriptions in this Rights Offering, at

TD Banknorth, N.A.

011 600 033-ABA

Account No. 5241216482

Account Name - USA Risk Group of Vermont, Inc. FBO AmerInst Insurance Group, Ltd. Rights Offering

Bank Contact: Gail Cromie, phone - 802-652-3244, fax - 802-652-3230

We will deliver to you certificates representing the common shares that you purchase as soon as practicable after the completion of this Rights Offering. In order to be eligible to exercise your oversubscription rights, if any, you must fully exercise your Basic Subscription Rights, as described in the Prospectus and the “Instructions as to Use of AmerInst Subscription Rights Certificates and Oversubscription Right Exercise Forms” accompanying this Subscription Rights Certificate.

DELIVERY INSTRUCTIONS

Upon completion of this Subscription, please deliver it along with payment to:

For delivery by mail:	USA Risk Group of Vermont, Inc.
	P.O. Box 1330
	Montpelier, Vermont 05601-1330
By hand delivery or overnight courier:	USA Risk Group of Vermont, Inc.
	2386 Airport Road
	Barre, Vermont 05641

SECTION 2 – ACKNOWLEDGMENT AND SIGNATURE

This Subscription Rights Certificate Is Not Valid Unless You Sign Below

The undersigned hereby acknowledges receipt of the Prospectus for this Rights Offering and understands that upon delivery of this Subscription Rights Certificate to the Subscription Agent, the undersigned irrevocably subscribes for the number of common shares indicated above on the terms and subject to the conditions of the Prospectus, and may not revoke this Subscription Rights Certificate (but may increase the number of shares for which the oversubscription right is exercised, as set forth in the Prospectus). Under penalties of perjury, the undersigned certifies that the information contained herein is correct.

Subscriber’s Signature:                                                                                                                Date:                                                                  

IMPORTANT: The signature must correspond with the name as printed on the reverse of this Subscription Rights Certificate in every particular, without any alteration or change whatsoever.

If signature is by trustee(s), executor(s), administrator(s), guardian(s), attorney(s)-in-fact, agent(s), officer(s) of a corporation, or other individual acting in a fiduciary or representative capacity, please provide the following information (please print). (See the Instructions included with this Subscription Rights Certificate).

Name:	Capacity:
Address:	Phone:
	Soc. Sec. # or Tax ID #:

EX-99.4

Exhibit 99.4

FORM OF OVERSUBSCRIPTION RIGHT EXERCISE FORM

Form No.:                        

THE TERMS AND CONDITIONS OF THE RIGHTS OFFERING ARE SET FORTH IN THE COMPANY’S PROSPECTUS, DATED                     , 2006 (THE “PROSPECTUS”), AND ARE INCORPORATED HEREIN BY REFERENCE. COPIES OF THE PROSPECTUS ARE AVAILABLE UPON REQUEST FROM USA RISK GROUP OF VERMONT, INC., THE SUBSCRIPTION AGENT.

AMERINST INSURANCE GROUP, LTD.

ORGANIZED UNDER THE LAWS OF BERMUDA

OVERSUBSCRIPTION RIGHT EXERCISE FORM

RELATING TO NONTRANSFERABLE OVERSUBSCRIPTION RIGHT TO PURCHASE

COMMON SHARES OF AMERINST INSURANCE GROUP, LTD.

SUBSCRIPTION PRICE: $23.33 PER SHARE

THE OVERSUBSCRIPTION RIGHT WILL EXPIRE IF NOT EXERCISED ON OR BEFORE

5:00 P.M., EASTERN TIME, ON OCTOBER 4, 2006,

UNLESS EXTENDED OR THE RIGHTS OFFERING IS TERMINATED

NAME AND ADDRESS OF REGISTERED OWNER:                                                                                                       

THIS CERTIFIES THAT the registered owner whose name is inscribed hereon may exercise an oversubscription right to subscribe for and purchase, at a subscription price of $23.33 per share (the “Subscription Price”), common shares of AmerInst Insurance Group, Ltd., a holding company organized under the laws of Bermuda (the “Company”), pursuant to a rights offering (the “Rights Offering”), on the terms and subject to the conditions set forth in the Prospectus and the “Instructions as to Use of AmerInst Subscription Rights Certificates and Oversubscription Right Exercise Forms” accompanying this Oversubscription Right Exercise Form (the “Oversubscription Right”).

If any of the shares available for purchase in the Rights Offering are not purchased by other holders of Basic Subscription Rights (the “Excess Shares”), any rights holder that exercises its Basic Subscription Rights in full may subscribe for a number of Excess Shares in an amount not to exceed the difference between (i) the maximum number of shares permitted under the Company’s ownership limitation (12,000 shares) and (ii) the total of the number of common shares owned by such rights holder and the number of shares purchased pursuant to such rights holder’s Basic Subscription Right, pursuant to the terms and conditions of the Rights Offering, subject to pro rata allocation, as described in the Prospectus (the “Oversubscription Right”). In order to be eligible to exercise your Oversubscription Right, you must have fully exercised your Basic Subscription Right, as described in the Prospectus and the “Instructions as to Use of AmerInst Subscription Rights Certificates and Oversubscription Right Exercise Forms” accompanying this Oversubscription Right Exercise Form.

The Oversubscription Right may be exercised by completing the reverse side hereof and returning the full payment of the Subscription Price for the number of common shares you wish to subscribe for pursuant to your Oversubscription Right, in accordance with the “Instructions as to Use of AmerInst Subscription Rights Certificates and Oversubscription Right Exercise Forms” that accompany this Oversubscription Right Exercise Form.

Oversubscription Rights may not be transferred or sold. The Oversubscription Rights will not be listed for trading on any stock exchange or on the OTC bulletin board.

THE OVERSUBSCRIPTION RIGHT MAY NOT BE EXERCISED UNLESS THE REVERSE SIDE HEREOF IS COMPLETED AND SIGNED.

Dated:                             , 2006	AMERINST INSURANCE GROUP, LTD.
	Stuart H. Grayston President

OVERSUBSCRIPTION RIGHT EXERCISE FORM

SECTION 1 – EXERCISE AND SUBSCRIPTION

OVERSUBSCRIPTION RIGHT

The undersigned irrevocably exercises his or her Oversubscription Right to subscribe for common shares of the Company, as indicated below, on the terms and subject to the conditions specified in the Company’s Prospectus, relating to such Oversubscription Right, receipt of which is hereby acknowledged.

If you have exercised your Basic Subscription Rights in full and wish to subscribe for additional shares pursuant to your Oversubscription Right, please complete lines (a) and (b) and sign Section 2 below.

(a) I hereby subscribe for                      common shares pursuant to my Oversubscription Right.

(b) Total Subscription Price (total shares subscribed for in line (a), multiplied by the Subscription Price of $23.33 per share): $                    

METHOD OF PAYMENT (CHECK ONE):

¨ Check or bank draft drawn upon a U.S. bank, or postal, telegraphic, or express money order payable to “USARGVT for AmerInst”

¨ Wire transfer directed to the account maintained by USA Risk Group of Vermont, Inc., as Subscription Agent for AmerInst Insurance Group, Ltd., for purposes of accepting subscriptions in this Rights Offering, at

TD Banknorth, N.A.

011 600 033-ABA

Account No. 5241216482

Account Name-USA Risk Group of Vermont, Inc. FBO AmerInst Insurance Group, Ltd.

Rights Offering

Bank Contact: Gail Cromie, phone-802-652-3244, fax-802-652-3230

If you exercise your Oversubscription Right and are allocated less than all of the common shares for which you wished to subscribe, your excess payment for shares that were not allocated to you will be returned to you by mail, without interest, as soon as practicable after the completion of this Rights Offering. We will deliver to you certificates representing the common shares that you purchase as soon as practicable after the expiration of the period for exercise of the Oversubscription Right and after all pro rata allocations and adjustments have been completed.

DELIVERY INSTRUCTIONS

Upon completion of this Subscription, please deliver it along with payment to:

For delivery by mail:	USA Risk Group of Vermont, Inc.
	P.O. Box 1330
	Montpelier, Vermont 05601-1330
By hand delivery or overnight courier:	USA Risk Group of Vermont, Inc.
	2386 Airport Road
	Barre, Vermont 05641

SECTION 2 – ACKNOWLEDGMENT AND SIGNATURE

This Oversubscription Right Exercise Form Is Not Valid Unless You Sign Below

The undersigned hereby acknowledges receipt of the Prospectus for this Rights Offering and understands that upon delivery of this Oversubscription Right Exercise Form to the Subscription Agent, the undersigned irrevocably subscribes for the number of common shares indicated above on the terms and subject to the conditions of the Prospectus, and may not revoke this Oversubscription Right Exercise Form (but may increase the number of shares for which the oversubscription right is exercised, as set forth in the Prospectus). The undersigned further represents that the undersigned has properly exercised the undersigned’s Basic Subscription Rights in full, and that the sum of the shares subscribed for above, shares purchased pursuant to the Basic Subscription Rights and other shares owned by the undersigned will not exceed 12,000. Under penalties of perjury, the undersigned certifies that the information contained herein is correct.

Subscriber’s Signature:                                                                                                                Date:                                                                  

IMPORTANT: The signature must correspond with the name as printed on the reverse of this Oversubscription Right Exercise Form in every particular, without any alteration or change whatsoever.

If signature is by trustee(s), executor(s), administrator(s), guardian(s), attorney(s)-in-fact, agent(s), officer(s) of a corporation, or other individual acting in a fiduciary or representative capacity, please provide the following information (please print). (See the Instructions included with this Subscription Rights Certificate).

Name:	Capacity:
Address:	Phone:
	Soc. Sec. # or Tax ID #:

EX-99.5

Exhibit 99.5

Form of Letter Regarding

Oversubscription Right

Dear AmerInst Shareholder:

As you know, the expiration date for our rights offering mailed to shareholders on July [28], 2006 was [September 1], 2006. Based on our preliminary review of subscription forms received on or prior to the expiration date, we believe basic subscription rights were exercised for a total of [            ] shares. This means that a total of [            ] shares are available for purchase pursuant to the oversubscription right. [For your information, all of the eligible directors have exercised their basic subscription rights in full.]

We are sending this notice to those shareholders we believe have properly exercised their basic subscription rights in full. You are eligible to exercise your oversubscription right. If you wish to purchase shares pursuant to your oversubscription right, you must complete the [enclosed] oversubscription right exercise form, indicating the number of shares you wish to purchase, and send the form, together with payment in full at the purchase price of $23.33 per share, to the subscription agent so that they are received by October 4, 2006, the oversubscription deadline.

Additional information concerning the rights offering and the oversubscription right is set forth in the prospectus dated July [28], 2006, and in the enclosed Instructions As To Use of AmerInst Subscription Rights Certificates and Oversubscription Right Exercise Forms. Please note that your total ownership of shares (including shares owned as of April 2, 2006, shares received upon distribution of the share dividend, shares acquired upon exercise of your basic subscription right, and shares purchased pursuant to the oversubscription right) may not exceed 12,000 shares.

If you have any questions, please contact the subscription agent, USA Risk Group of Vermont, Inc., at 800-422-8141.

Your board of directors is excited about the future of AmerInst, and as always, thanks you for your support of our company.

Sincerely,

Stuart H. Grayston

President