8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of report (Date of earliest event reported): October 16, 2012

Affirmative Insurance Holdings, Inc.

(Exact name of Registrant as Specified in its Charter)

Delaware	000-50795	75-2770432
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

4450 Sojourn Drive, Suite 500, Addison, Texas	75001
(Address of principal executive offices)	Zip Code

Registrant’s telephone, including area code: (972) 728-6300

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01. Amendment of a Material Definitive Agreement

As previously disclosed in a Form 8-K filed with the Commission on October 20, 2006, on October 16, 2006, Registrant entered into a 10-year Master Services Agreement (the “Master Agreement”) with Accenture LLP (“Accenture”) pursuant to which Registrant agreed to outsource substantially all of its information technology (“IT”) operations to Accenture. On October 16, 2012, Registrant and Accenture materially amended the Master Agreement effective September 1, 2012 (“Amended Agreement”), whereby Registrant will assume responsibility for managing substantially all of its IT operations, including Registrant’s data center and applications management. Accenture will continue to provide substantial IT support and augment Registrant’s IT operations in the form of knowledge and resources.

Under the Amended Agreement, Registrant will pay Accenture for requested resources on a time and materials basis, with a minimum committed spend of $6.1 million per year. In order to terminate the infrastructure outsourcing portion of the Master Agreement effective September 1, 2012, Registrant will pay a termination fee of $1.1 million to Accenture. Registrant expects the Amended Agreement to yield savings of approximately $2.8 million per year, or $11.7 million over the remaining term of the Amended Agreement after accounting for Registrant’s added costs to bring IT services in-house.

The term of the Amended Agreement is materially unchanged from the Master Agreement, subject to termination for convenience provisions that may be invoked by Registrant at any time, subject to the payment of certain fees. Termination fees may be incurred for early termination under other specified circumstances as well.

Except for the terms of the Master Agreement amended therein, the Amended Agreement remains subject to the Master Agreement previously filed as Exhibit 10.27 to the Form 8-K filed with the Commission on October 20, 2006. A copy of the Amended Agreement (without attached Schedules) is filed with this Current Report on Form 8-K as Exhibit 10.27 and is incorporated herein by reference, and the foregoing summary is qualified in its entirety by reference to the complete terms of the Agreement.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibit

Number	Description
10.27	Amendment No. 19 to Services Agreement No. 1 effective September 1, 2012 between Affirmative Insurance Holdings, Inc. and Accenture LLP.

Forward-Looking Statements

This Current Report on Form 8-K contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements typically are identified by use of terms such as “may,” “will,” “should,” “plan,” “expect,” “anticipate,” “estimate” and similar words, although some forward-looking statements are expressed differently. Forward-looking statements represent our management’s judgment regarding future events. Although the Registrant believes that the expectations reflected in such forward-looking statements are reasonable, the Registrant can give no assurance that such

expectations will prove to be correct. All statements other than statements of historical fact included in this Current Report on Form 8-K are forward-looking statements. The Registrant cannot guarantee the accuracy of the forward-looking statements, and the Registrant’s actual results could differ materially from those contained in any forward-looking statements due to a number of factors, including the statements under the heading “Risk Factors” contained in the Registrant’s filings with the Securities and Exchange Commission. Accordingly, such forward-looking statements are subject to a number of risks and uncertainties and may cause actual results to differ materially from the Registrant’s expressed expectations.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.

		AFFIRMATIVE INSURANCE HOLDINGS, INC.
	By:	/s/ Joseph G. Fisher
Date: October 22, 2012	Name:	Joseph G. Fisher
	Title:	Executive Vice President and General Counsel

EX-10.27

Exhibit 10.27

AMENDMENT NO. 19 TO SERVICES AGREEMENT NUMBER 1

This Amendment No. 19 (this “Amendment”) amends Services Agreement Number 1 (the “Services Agreement”) entered into by and between Affirmative Insurance Holdings, Inc., a Delaware corporation (“Client” or “AFFM”) and Accenture LLP, an Illinois limited liability partnership (“Accenture” or “ACN”), as amended (the “Amended Services Agreement”), which is subject to the Master Services Agreement entered into between Client and Accenture on October 16, 2006 (“Master Agreement” or “MSA”), as amended, incorporated herein by reference. This Amendment shall be deemed effective as of July 1, 2012 (the “Amendment Effective Date”), with a scheduled services date of September 1, 2012 (the “Amended Services Date”).

WHEREAS, Accenture and AFFM desire to further amend the terms and conditions of the Amended Services Agreement;

NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the parties agree to the following changes:

The Services Agreement is amended as of the Amendment Effective Date as follows:

1. Section 3 – Term; Renewal: the reference to the date “October 14, 2016” is deleted and replaced with “October 31, 2016.”

2. Section 5 – Client Service Responsibilities; Client-Provided Components, is amended and modified as follows:

The following paragraph is inserted as paragraph twelve (12) of Section 5(a):

Facilitating the interconnection to the Accenture’s Chicago Global Delivery Network and the AFFM Data Center facilities. This connectivity configuration will provide Accenture off-shore resources with access to Client’s data center environment, including, but not limited to, the application software; production, development and testing environments, and Client’s data;

Section 5(b) and Exhibit A referenced therein are hereby deleted in their entirety.

3. Section 7 – Staffing and Resources, is hereby deleted in its entirety.

4. Schedule 1 – Transition Services. As of the Amendment Effective Date the parties agree that: (i) all Transition Services have been successfully completed and accepted by Client; and (ii) Schedule 1 is deleted in its entirety.

5. Schedule 2 – Application Outsourcing Services, is amended and restated in its entirety as of the Amendment Effective Date with Schedule 2 (Application Outsourcing Services) as set forth in Attachment A to this Amendment.

6. Schedule 3 – Infrastructure Outsourcing Services, is amended and restated in its entirety as of the Amendment Effective Date with Schedule 3 (Infrastructure Outsourcing Services) as set forth in Attachment B to this Amendment.

7. Schedule 5 – Pricing, is amended and restated in its entirety as of the Amended Services Date with Schedule 5 (Pricing) as set forth in Attachment C to this Amendment.

Amendment 19 to Services Agreement No. 1
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8. Schedule 6 – Pass-Through Expenses, is amended and restated in its entirety as of the Amended Services Date with Schedule 6 (Pass-Through Expenses) as set forth in Attachment D to this Amendment.

9. Schedule 7 – Service Levels, is amended and restated in its entirety as of the Amendment Effective Date with Schedule 7 (Service Levels) as set forth in Attachment E to this Amendment.

10. Schedule 8 – Termination Amounts Schedule, is amended and restated in its entirety as of the Amended Services Date with Schedule 8 (Termination Amounts Schedule) as set forth in Attachment F to this Amendment.

11. Schedule 9 – Service Management Schedule, is amended and restated in its entirety as of the Amended Services Date with Schedule 9 (Service Management) as set forth in Attachment G to this Amendment.

12. Conflict. In the event of a conflict between the terms of this Amendment and the Amended Services Agreement, the terms of this Amendment shall take precedence and control.

13. Defined Terms. Capitalized terms used in this Amendment and not otherwise defined herein shall have the meanings set forth in the Amended Services Agreement.

14. Effect of Amendment. Except for the changes specifically set forth in this Amendment, all other terms and conditions of the Amended Services Agreement and the Master Agreement shall remain unmodified and in full force and effect.

15. Binding Nature. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective legal representatives, successors and assigns.

16. Counterparts. This Amendment may be executed in any number of counterparts, each of which shall be deemed an original, but all of which shall constitute one instrument.

Amendment 19 to Services Agreement No. 1
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IN WITNESS WHEREOF, the Parties hereto have signed this Amendment as of the dates below and such Amendment is effective as of the Effective Date.

AFFIRMATIVE INSURANCE HOLDINGS, INC.		ACCENTURE LLP
By:	/s/ Thomas E. Hawley	By:	/s/ Brian Barrett
	(Authorized Signature)		(Authorized Signature)
Name:	Thomas E. Hawley	Name:	Brian Barrett
	(Printed or Typed)		(Printed or Typed)
Title:	Chief Information Officer	Title:	Senior Executive
	(Printed or Typed)		(Printed or Typed)

Amendment 19 to Services Agreement No. 1
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