10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)
x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended March 31, 2013           OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from ____ to ____

Commission file number 001-35009

Fortegra Financial Corporation

(Exact name of Registrant as specified in its charter)

Delaware	58-1461399
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
10151 Deerwood Park Boulevard, Building 100, Suite 330 Jacksonville, FL	32256
(Address of principal executive offices)	(Zip Code)
Registrant's telephone number, including area code:	(866)-961-9529

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer o                          Accelerated filer o

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No x

The number of outstanding shares of the registrant's Common Stock, $0.01 par value, outstanding as of April 30, 2013 was 19,832,569.

FORTEGRA FINANCIAL CORPORATION

QUARTERLY REPORT ON FORM 10-Q

March 31, 2013

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION		Page Number
Item 1.	Financial Statements	3
	Consolidated Balance Sheets (Unaudited)	3
	Consolidated Statements of Income (Unaudited)	4
	Consolidated Statements of Comprehensive Income (Unaudited)	5
	Consolidated Statement of Stockholders' Equity (Unaudited)	6
	Consolidated Statements of Cash Flows (Unaudited)	7
	Notes to Consolidated Financial Statements (Unaudited)	8
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	31
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	41
Item 4.	Controls and Procedures	42
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	43
Item 1A.	Risk Factors	44
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	60
Item 3.	Defaults Upon Senior Securities	61
Item 4.	Mine Safety Disclosures	61
Item 5.	Other Information	61
Item 6	Exhibits	61
Signatures		61
Exhibit Index		62

1

FORWARD-LOOKING STATEMENTS

This Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), which are made in reliance upon the protections provided by such acts for forward-looking statements. Such statements are subject to risks and uncertainties. All statements other than statements of historical fact included in this Form 10-Q are forward-looking statements. Forward-looking statements give our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as "anticipate," "estimate," "expect," "project,'' "plan," "intend," "believe," "may," "should," "can have," "will," "likely" and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating results or financial performance or other events.

The forward-looking statements contained in this Form 10-Q are based on assumptions that we have made in light of our industry experience and our perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate under the circumstances. As you read this Form 10-Q, you should understand that these statements are not guarantees of performance or results. They involve risks, uncertainties (some of which are beyond our control) and assumptions. Although we believe that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect our actual financial results and cause them to differ materially from those anticipated in the forward-looking statements. We believe these factors include, but are not limited to, those described under ITEM 1A. RISK FACTORS and ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. Should one or more of these risks or uncertainties materialize, or should any of these assumptions prove incorrect, our actual results may vary materially from those projected in these forward-looking statements.

Any forward-looking statement made by us in this Form 10-Q speaks only as of the date on which we make it. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

This Form 10-Q should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2012 ("Annual Report") along with the Company's other filings with the Securities and Exchange Commission ("SEC").

PART I. FINANCIAL INFORMATION

Unless the context requires otherwise, references in this Quarterly Report on Form 10-Q ("Form 10-Q") to "Fortegra Financial," "Fortegra," "we," "us," "the Company" or similar terms refer to Fortegra Financial Corporation and its subsidiaries.

2

ITEM 1. FINANCIAL STATEMENTS

FORTEGRA FINANCIAL CORPORATION

CONSOLIDATED BALANCE SHEETS (Unaudited)

(All Amounts in Thousands Except Share and Per Share Amounts)

	At
	March 31, 2013			December 31, 2012
Assets:
Investments:
Fixed maturity securities available-for-sale, at fair value (amortized cost of $114,695 at March 31, 2013 and $107,095 at December 31, 2012)	$	118,102		$	110,641
Equity securities available-for-sale, at fair value (cost of $7,082 at March 31, 2013 and $6,082 at December 31, 2012)	7,301			6,220
Short-term investments	1,222			1,222
Total investments	126,625			118,083
Cash and cash equivalents	14,339			15,209
Restricted cash	28,881			31,142
Accrued investment income	1,217			1,235
Notes receivable, net	5,045			11,290
Accounts and premiums receivable, net	33,883			27,026
Other receivables	28,189			13,511
Reinsurance receivables	196,907			203,988
Deferred acquisition costs	63,623			59,320
Property and equipment, net	17,621			17,946
Goodwill	119,512			119,512
Other intangible assets, net	77,767			79,340
Income taxes receivable	3,272			2,897
Other assets	8,554			7,667
Total assets	$	725,435		$	708,166
Liabilities:
Unpaid claims	$	34,155		$	33,007
Unearned premiums	225,288			235,900
Policyholder account balances	25,489			26,023
Accrued expenses, accounts payable and other liabilities	70,845			58,563
Deferred revenue	58,410			50,607
Note payable	91,750			89,438
Preferred trust securities	35,000			35,000
Deferred income taxes, net	29,792			28,658
Total liabilities	570,729			557,196
Commitments and Contingencies (Note 19)
Stockholders' Equity:
Preferred stock, par value $0.01; 10,000,000 shares authorized; none issued	—			—
Common stock, par value $0.01;150,000,000 shares authorized; 20,850,531 and 20,710,370 shares issued at March 31, 2013 and December 31, 2012, respectively, including shares in treasury	208			207
Treasury stock, at cost;1,024,212 shares at March 31, 2013 and December 31, 2012, respectively	(6,651		)	(6,651		)
Additional paid-in capital	97,945			97,641
Accumulated other comprehensive loss, net of tax	(468		)	(631		)
Retained earnings	52,310			49,817
Stockholders' equity before non-controlling interests	143,344			140,383
Non-controlling interests	11,362			10,587
Total stockholders' equity	154,706			150,970
Total liabilities and stockholders' equity	$	725,435		$	708,166

See accompanying notes to these consolidated financial statements.

3

FORTEGRA FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

(All Amounts in Thousands Except Share and Per Share Amounts)

	For the Three Months Ended
	March 31, 2013		March 31, 2012
Revenues:
Service and administrative fees	$	38,858	$	22,511
Brokerage commissions and fees	9,731		9,520
Ceding commission	7,163		7,064
Net investment income	909		743
Net realized investment gains (losses)	7		(3		)
Net earned premium	33,142		31,972
Other income	91		72
Total revenues	89,901		71,879
Expenses:
Net losses and loss adjustment expenses	10,535		11,266
Member benefit claims	8,978		1,303
Commissions	35,362		31,988
Personnel costs	15,846		11,392
Other operating expenses	9,805		6,739
Depreciation and amortization	1,318		738
Amortization of intangibles	1,948		1,482
Interest expense	1,444		1,652
Total expenses	85,236		66,560
Income before income taxes and non-controlling interests	4,665		5,319
Income taxes	1,354		1,887
Income before non-controlling interests	3,311		3,432
Less: net income attributable to non-controlling interests	818		18
Net income	$	2,493	$	3,414
Earnings per share:
Basic	$	0.13	$	0.17
Diluted	$	0.12	$	0.16
Weighted average common shares outstanding:
Basic	19,556,743		19,904,819
Diluted	20,625,041		20,739,196

See accompanying notes to these consolidated financial statements.

4

FORTEGRA FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)

(All Amounts in Thousands)

	For the Three Months Ended
	March 31, 2013			March 31, 2012
Net income	$	2,493		$	3,414
Other comprehensive income (loss), net of tax:
Unrealized (losses) gains on available-for-sale securities:
Unrealized holding (losses) gains arising during the period	(51		)	729
Related tax benefit (expense)	18			(255		)
Reclassification of (gains) losses included in net income	(7		)	3
Related tax (benefit) expense	2			(1		)
Unrealized (losses) gains on available-for-sale securities, net of tax	(38		)	476
Interest rate swap:
Unrealized gain (loss) on interest rate swap	260			(70		)
Related tax (expense) benefit	(91		)	25
Reclassification of losses included in net income	49			—
Related tax (benefit)	(17		)	—
Unrealized gain (loss) on interest rate swap, net of tax	201			(45		)
Other comprehensive income before non-controlling interests, net of tax	163			431
Less: comprehensive income attributable to non-controlling interests	—			1
Other comprehensive income	163			430
Comprehensive income	$	2,656		$	3,844

See accompanying notes to these consolidated financial statements.

5

FORTEGRA FINANCIAL CORPORATION

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (Unaudited)

(All Amounts in Thousands Except Share Amounts)

	Common Stock			Treasury Stock
	Shares	Amount		Shares		Amount			Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)			Retained Earnings		Non-controlling Interests			Total Stockholders' Equity
Balance, December 31, 2012	20,710,370	$	207	(1,024,212	)	$	(6,651	)	$	97,641	$	(631	)	$	49,817	$	10,587		$	150,970
Net income	—	—		—		—			—		—			2,493		818			3,311
Other comprehensive income	—	—		—		—			—		163			—		—			163
Dividends	—	—		—		—			—		—			—		(43		)	(43		)
Stock-based compensation	139,937	1		—		—			302		—			—		—			303
Direct stock awards to employees	224	—		—		—			2		—			—		—			2
Balance, March 31, 2013	20,850,531	$	208	(1,024,212	)	$	(6,651	)	$	97,945	$	(468	)	$	52,310	$	11,362		$	154,706

See accompanying notes to these consolidated financial statements.

6

FORTEGRA FINANCIAL CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(All Amounts in Thousands)

	For the Three Months Ended
	March 31, 2013			March 31, 2012
Operating Activities:
Net income	$	2,493		$	3,414
Adjustments to reconcile net income to net cash flows provided by operating activities:
Change in deferred acquisition costs	(4,303		)	2,922
Depreciation and amortization	3,266			2,220
Deferred income tax expense	1,046			(64		)
Net realized investment (gains) losses	(7		)	3
Stock-based compensation expense	303			179
Direct stock awards to employees	2			—
Amortization of premiums and accretion of discounts on investments	350			312
Non-controlling interests	818			18
Change in allowance for doubtful accounts	11			544
Changes in operating assets and liabilities, net of the effects of acquisitions and dispositions:
Accrued investment income	56			2
Accounts and premiums receivable, net	(6,868		)	(11,557		)
Other receivables	(14,678		)	(7,694		)
Reinsurance receivables	7,281			8,319
Income taxes receivable	(375		)	—
Other assets	(887		)	234
Unpaid claims	948			(86		)
Unearned premiums	(10,612		)	(6,870		)
Policyholder account balances	(534		)	(475		)
Accrued expenses, accounts payable and other liabilities	12,592			6,792
Income taxes payable	—			40
Deferred revenue	7,803			(3,055		)
Net cash flows used in operating activities	(1,295		)	(4,802		)
Investing activities:
Proceeds from maturities, calls and prepayments of available-for-sale investments	3,332			1,697
Proceeds from sales of available-for-sale investments	412			2,050
Net change in short-term investments	—			100
Purchases of available-for-sale investments	(10,199		)	(5,236		)
Purchases of property and equipment	(993		)	(1,800		)
Net paid for acquisitions of subsidiaries, net of cash received	(2,902		)	—
Net proceeds (issuance) from notes receivable	110			(199		)
Net proceeds received from related party notes receivable	6,135			—
Change in restricted cash, net of restricted cash received from acquisitions	2,261			(4,779		)
Net cash flows used in investing activities	(1,844		)	(8,167		)
Financing activities:
Payments on notes payable	(8,188		)	(23,000		)
Proceeds from notes payable	10,500			24,700
Repurchase of shares of common stock	—			(1,394		)
Dividends paid to non-controlling interests	(43		)	—
Net cash flows provided by financing activities	2,269			306
Net (decrease) in cash and cash equivalents	(870		)	(12,663		)
Cash and cash equivalents, beginning of period	15,209			31,339
Cash and cash equivalents, end of period	$	14,339		$	18,676

See accompanying notes to these consolidated financial statements.

7

FORTEGRA FINANCIAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(All Amounts in Thousands Except Share Amounts, Per Share Amounts or Unless Otherwise Noted)

Nature of Operations

Fortegra Financial Corporation (traded on the New York Stock Exchange under the symbol: FRF), including its subsidiaries ("Fortegra" or the "Company"), is a diversified insurance services company headquartered in Jacksonville, Florida that provides distribution and administration services on a wholesale basis to insurance companies, insurance brokers and agents and other financial services companies primarily in the United States. In 2008, the Company changed its name from Life of the South Corporation to Fortegra Financial Corporation. The Company was incorporated in 1981 in the State of Georgia and re-incorporated in the State of Delaware in 2010. Most of the Company's business is generated through networks of small to mid-sized community and regional banks, small loan companies and automobile dealerships. The Company's majority-owned and controlled subsidiaries at March 31, 2013, are as follows:

• LOTS Intermediate Co. ("LOTS IM")

• Bliss and Glennon, Inc. ("B&G")

• CRC Reassurance Company, Ltd. ("CRC")

• Insurance Company of the South ("ICOTS")

• Life of the South Insurance Company ("LOTS") and its subsidiary, Bankers Life of Louisiana ("Bankers Life")

• LOTS Reassurance Company ("LOTS RE")

• LOTSolutions, Inc.

• Lyndon Southern Insurance Company ("Lyndon Southern")

• Southern Financial Life Insurance Company ("SFLAC"), 85% owned

• South Bay Acceptance Corporation ("South Bay")

• Continental Car Club, Inc. ("Continental")

• United Motor Club of America, Inc. ("United")

• Auto Knight Motor Club, Inc. ("Auto Knight")

• eReinsure.com, Inc. ("eReinsure")

• Pacific Benefits Group Northwest, LLC ("PBG")

• Magna Insurance Company ("Magna")

• Digital Leash, LLC, d/b/a ProtectCELL ("ProtectCELL"), 62.4% owned

• 4Warranty Corporation ("4Warranty")

• Response Indemnity Company of California ("RICC")

The Company operates in three business segments: (i) Payment Protection, (ii) Business Process Outsourcing ("BPO") and (iii) Brokerage. Payment Protection specializes in protecting lenders and their consumers from death, disability or other events that could otherwise impair their ability to repay a debt and also offers warranty and service contracts and motor club solutions. BPO provides an assortment of administrative services tailored to insurance and other financial services companies through a virtual insurance company platform. Brokerage uses a pure wholesale sell-through model to sell specialty casualty and surplus lines insurance and also provides web-hosted applications used by insurers, reinsurers and reinsurance brokers for the global reinsurance market.

1. Basis of Presentation

The accompanying unaudited interim Consolidated Financial Statements of Fortegra have been prepared in conformity with generally accepted accounting principles in the United States of America ("U.S. GAAP") promulgated by the Financial Accounting Standards Board ("FASB"), Accounting Standards Codification ("ASC" or "the guidance") for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements and should be read in conjunction with the Company's Annual Report.

The interim financial statements in this Form 10-Q have not been audited. In the opinion of management, the accompanying unaudited interim financial information reflects all adjustments, including normal recurring adjustments necessary to present fairly Fortegra's financial position, results of operations, other comprehensive income and cash flows for each of the interim periods presented. The results of operations for the three months ended March 31, 2013 are not necessarily indicative of the results that may be expected for the full year ending on December 31, 2013.

2. Summary of Significant Accounting Policies

Fortegra's interim Consolidated Financial Statements as of March 31, 2013 and 2012 are unaudited and have been prepared following the significant accounting policies disclosed in Note 2 of the Notes to the Consolidated Financial Statements of the Company's Annual Report on Form 10-K filed with the SEC.

Principles of Consolidation

The Consolidated Financial Statements include the accounts of Fortegra Financial Corporation and its majority-owned and controlled subsidiaries. All material intercompany account balances and transactions have been eliminated. The third-party ownership of 15% of

8

FORTEGRA FINANCIAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(All Amounts in Thousands Except Share Amounts, Per Share Amounts or Unless Otherwise Noted)

the common stock of SFLAC and 37.6% of the ownership interests of ProtectCELL have been reflected as non-controlling interests on the Consolidated Balance Sheets. At March 31, 2013, the non-controlling interest for ProtectCELL and SFLAC totaled $10.8 million and $0.5 million, respectively.

Income (loss) attributable to these non-controlling interests has been reflected on the Consolidated Statements of Income as income (loss) attributable to non-controlling interests and on the Consolidated Statements of Comprehensive Income as comprehensive income (loss) attributable to non-controlling interests.

Comprehensive Income (Loss)

Comprehensive income (loss) includes both net income and other items of comprehensive income comprised of unrealized gains and losses on investment securities classified as available-for-sale and unrealized gains and losses on the interest rate swap, net of the related tax effects.

Use of Estimates

Preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Reclassifications

Certain items in prior financial statements have been reclassified to conform to the current presentation, which had no impact on net income, comprehensive income or loss, net cash provided by operating activities or stockholders' equity.

Subsequent Events

The Company reviewed events subsequent to March 31, 2013 that occurred up to the date the Company's Consolidated Financial Statements were issued, and determined that no events required recognition or disclosure in these Consolidated Financial Statements and/or the notes thereto.

3. Recent Accounting Standards

Recently Adopted Accounting Pronouncements

In February 2013, the FASB issued Accounting Standards Update ("ASU") No. 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. ASU 2013-02 requires an entity to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income ("AOCI") by the respective line items of net income but only if the amount reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period. This guidance is effective for reporting periods beginning after December 15, 2012. The Company adopted this guidance effective January 1, 2013. Accordingly, we have included an enhanced footnote disclosure in the Note, "Other Comprehensive Income." The adoption of this pronouncement did not impact the Company's consolidated financial position, results of operations or cash flows.

In July 2012, the FASB issued ASU No. 2012-02, Intangibles-Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment. The ASU permits entities to perform an optional qualitative assessment for determining whether it is more likely than not that an indefinite-lived intangible asset is impaired. The guidance is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. The adoption of this pronouncement did not impact the Company's consolidated financial position, results of operations or cash flows.

In December 2011, the FASB issued ASU No. 2011-11, Disclosures About Offsetting Assets and Liabilities. This standard requires the disclosure of both gross and net information about instruments and transactions eligible for offset in the statement of financial position, as well as instruments and transactions subject to an agreement similar to a master netting arrangement. In addition, the standard requires disclosure of collateral received and posted in connection with master netting agreements or similar arrangements. The new requirements are effective for the Company beginning on January 1, 2013. As the provisions of ASU No. 2011-11 only impact the disclosure requirements related to the offsetting of assets and liabilities, the adoption of this guidance did not impact the Company's consolidated financial position, results of operations or cash flows.

9

FORTEGRA FINANCIAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(All Amounts in Thousands Except Share Amounts, Per Share Amounts or Unless Otherwise Noted)

4. Earnings Per Share

Earnings per share is calculated as follows:	For the Three Months Ended
	March 31, 2013		March 31, 2012
Numerator: (for both basic and diluted earnings per share)
Net income	$	2,493	$	3,414
Denominator:
Total average basic common shares outstanding	19,556,743		19,904,819
Effect of dilutive stock options and restricted stock awards	1,068,298		834,377
Total average diluted common shares outstanding	20,625,041		20,739,196
Earnings per share-basic	$	0.13	$	0.17
Earnings per share-diluted	$	0.12	$	0.16
Weighted average anti-dilutive common shares	402,132		378,927

5. Consolidation of Operations Charges

Consolidation of Operations Plan

As disclosed on January 18, 2013 in the Company's Current Report on Form 8-K, effective January 14, 2013, the Company committed to a plan to consolidate the Company's fulfillment, claims administration and information technology functions for all of its insurance related products (the "Plan"). Prior to the Plan, such functions resided in the Company's individual business units. The decision is part of the Company's efforts to streamline its operations, focus its resources and provide first in class service to its customers. The following is a summary of the charges incurred by the Company:

	For the Three Months Ended
	March 31, 2013
Severance and benefit costs included in personnel expense	$	1,154
Total consolidation of operations costs	$	1,154

6. Variable Interest Entities

In July 2011, the Company sold its 100% interest in Creative Investigations Recovery Group, LLC ("CIRG"). The consideration included a note receivable, included on the Consolidated Balance Sheets, with a first priority lien security interest in the assets of CIRG and other property of the buyers. The Company performed a detailed analysis of the CIRG sale transaction and determined that CIRG is considered a VIE, as defined in ASC 810, because the Company has an interest due to the note financing. The Company further determined that it is not the primary beneficiary because the Company does not have the power to direct the activities of the VIE and has no right to receive the residual returns of CIRG. Therefore, CIRG is not consolidated in the Company's results of operations. During the quarter ended March 31, 2013, the Company engaged in discussions with the buyers regarding possible restructuring of the note receivable and therefore the Company has temporarily halted the recognition of interest income on the note while discussions are ongoing. The Company's maximum exposure to loss in the VIE is limited to the outstanding balance of the note receivable, which is presented in the table below:

	At
	March 31, 2013		December 31, 2012
The Company's maximum exposure to loss in the VIE	$	1,139	$	1,139

10

FORTEGRA FINANCIAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(All Amounts in Thousands Except Share Amounts, Per Share Amounts or Unless Otherwise Noted)

7. Other Comprehensive Income

Amounts reclassified from accumulated other comprehensive income into earnings for the following periods are as follows:

	For the Three Months Ended March 31, 2013
	Net unrealized gains (losses) on available-for-sale securities			Net unrealized loss on interest rate swap			Total
Balance at December 31, 2012, net of tax	$	2,189		$	(2,820	)	$	(631	)
Other comprehensive income (loss) before reclassifications:
Pre-tax (loss) income	(51		)	260			209
Income tax benefit (expense)	18			(91		)	(73		)
Other comprehensive (loss) income before reclassifications, net of tax	(33		)	169			136
Amounts reclassified from accumulated other comprehensive (loss) income:
Pre-tax (income) loss	(7		)	49			42
Income tax expense (benefit)	2			(17		)	(15		)
Amounts reclassified from accumulated other comprehensive (loss) income, net of tax	(5		)	32			27
Current period other comprehensive (loss) income, net of tax	(38		)	201			163
Less: comprehensive income (loss) attributable to non-controlling interests	—			—			—
Balance at March 31, 2013, net of tax	$	2,151		$	(2,619	)	$	(468	)

	For the Three Months Ended March 31, 2012
	Net unrealized gains (losses) on available-for-sale securities			Net unrealized loss on interest rate swap			Total
Balance at December 31, 2011, net of tax	$	587		$	(2,341	)	$	(1,754	)
Other comprehensive income (loss) before reclassifications:
Pre-tax income(loss)	729			(70		)	659
Income tax (expense) benefit	(255		)	25			(230		)
Other comprehensive income (loss) before reclassifications, net of taxes	474			(45		)	429
Amounts reclassified from accumulated other comprehensive income (loss):
Pre-tax loss	3			—			3
Income tax (benefit)	(1		)	—			(1		)
Amounts reclassified from accumulated other comprehensive income, net of taxes	2			—			2
Net current period other comprehensive income (loss), net of taxes	476			(45		)	431
Less: comprehensive income attributable to non-controlling interests	1			—			1
Balance at March 31, 2012, net of tax	$	1,062		$	(2,386	)	$	(1,324	)

11

FORTEGRA FINANCIAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(All Amounts in Thousands Except Share Amounts, Per Share Amounts or Unless Otherwise Noted)

Reclassifications out of accumulated other comprehensive income are as follows:

	For the Three Months Ended
	March 31, 2013			March 31, 2012			Consolidated Statement of Income Location
Unrealized gains (losses) on available-for-sale securities:
Reclassification of gains (losses) included in net income	$	7		$	(3	)	Net realized investment gains (losses)
Related tax (expense) benefit	(2		)	1			Income taxes
Net of tax	5			(2		)	Net Income
Interest rate swap:
Reclassification of losses included in net income	(49		)	—			Interest expense
Related tax expense	17			—			Income taxes
Net of tax	$	(32	)	$	—		Net Income

8. Business Acquisitions and Dispositions

Acquisition in 2013

On February 1, 2013, the Company acquired 100% of the outstanding stock of RICC, from subsidiaries of the Kemper Corporation ("Kemper") for $4.8 million.  RICC is a property/casualty insurance company domiciled and licensed in California, which the Company intends to use for geographic expansion in the Payment Protection business.  RICC had, at the time of purchase, no policies in force. All remaining claim liabilities for previously issued policies are fully reinsured by Kemper's subsidiary, Trinity Universal Insurance Company.

Acquisitions in 2012

On December 31, 2012, the Company acquired a 62.4% ownership interest in Digital Leash, LLC, d/b/a ProtectCELL for $20.0 million, which amount is deemed a Series A Contribution under the provisions of the related agreements. ProtectCELL provides membership plans for the protection of mobile wireless devices and other benefits including data management and identity theft protection. ProtectCELL is one of the leaders in mobile device protection plans and will spearhead Fortegra's efforts to expand its warranty and service contract business in the mobile and wireless device space. ProtectCELL's results will be included in the Company's Payment Protection segment. As part of the acquisition, the Company also has an option, commencing after 2014, to acquire the remaining 37.6% ownership interest in ProtectCELL, at a price based on a sliding scale multiple of ProtectCELL's trailing twelve-month EBITDA, less the Series A Contributions, multiplied by 37.6%. The option has no expiration, though the owners of the non-controlling interest have the right to defer the option commencement date for one year under certain conditions. The option must be exercised with respect to not less than all of the non-controlling interest, and is accounted for as an embedded derivative within the value of non-controlling interest.

On December 31, 2012, the Company acquired 100% of the outstanding stock ownership of 4Warranty Corporation, a leading warranty and extended service contract administrator with extensive expertise in furniture, electronics, appliance, lawn and garden, and fitness equipment. 4Warranty complements the Company's rapidly expanding warranty business. 4Warranty's results will be included in the Company's Payment Protection segment.

On April 24, 2012, the Company acquired a 100% ownership interest in MHA & Associates LLC ("MHA"), for $0.3 million, obtaining the renewal rights of the business and hiring the prior owner to maintain and increase the block of business.

The following table presents the allocation of purchase price recorded for the 2013 acquisition of RICC and the 2012 acquisitions of ProtectCELL and 4Warranty.  The ProtectCELL and 4Warranty determinations are preliminary, mainly due to ongoing studies being conducted by external valuation experts to assist the Company in its determination of the fair values of intangible assets, deferred revenues, non-controlling interest and goodwill, and the related impact on deferred taxes, whereas all other amounts are considered final. The ProtectCELL value of deferred acquisition costs as of the acquisition date has been reclassified to deferred revenue to present our preliminary estimate of the fair value of our ongoing performance obligation at the time of acquisition as reflected in the Consolidated Balance Sheet as of December 31, 2012.

12

FORTEGRA FINANCIAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(All Amounts in Thousands Except Share Amounts, Per Share Amounts or Unless Otherwise Noted)

	2012						2013
	Acquisitions						Acquisition
	4Warranty			ProtectCELL			RICC
Assets:
Cash and cash equivalents	$	703		$	350		$	1,893
Restricted cash	72			7,438			—
Investments	—			—			2,488
Short-term investments	—			252			—
Accrued investment income	—			—			38
Notes receivable, net	—			6,341			—
Other receivables	199			2,312			—
Reinsurance receivables	—			—			200
Property and equipment, net	61			674			—
Other intangible assets, net	1,900			27,815			375
Other assets	—			1,470			10
Liabilities:
Unpaid claims	—			(176		)	(200		)
Accrued expenses, accounts payable and other liabilities	(221		)	(2,644		)	(9		)
Deferred revenue	(1,260		)	(25,564		)	—
Income taxes payable	(296		)	—			—
Deferred income taxes, net	(266		)	—			—
Net assets acquired	892			18,268			4,795
Non-controlling interest	—			(10,000		)	—
Purchase consideration (1)	3,616			20,000			4,795
Goodwill	$	2,724		$	11,732		$	—

⁽¹⁾ - The purchase consideration for the 4Warranty acquisition includes $0.3 million of contingent consideration and $0.5 million of working capital and hold back reserves, which estimates are unchanged in the current period and are expected to be paid out based on the agreed terms of the Stock Purchase Agreement.

9. Goodwill

The following table presents goodwill by segment:

	Payment Protection		BPO		Brokerage		Total
Balance at December 31, 2012	$	52,084	$	12,970	$	54,458	$	119,512
Balance at March 31, 2013	$	52,084	$	12,970	$	54,458	$	119,512

10. Other Intangible Assets

The following table presents finite-lived other intangible assets and their respective amortization periods:

				March 31, 2013							December 31, 2012
	Amortization Period (Years)			Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Finite-lived other intangible assets:
Customer and agent relationships	5	to	15	$	57,780	$	(13,822	)	$	43,958	$	57,780	$	(12,340	)	$	45,440
Software	5	to	10	10,118		(3,723		)	6,395		10,118		(3,385		)	6,733
Present value of future profits	0.3	to	0.75	548		(548		)	—		548		(548		)	—
Non-compete agreements	1.5	to	6	5,008		(2,844		)	2,164		5,008		(2,716		)	2,292
Total finite-lived other intangible assets				$	73,454	$	(20,937	)	$	52,517	$	73,454	$	(18,989	)	$	54,465

13

FORTEGRA FINANCIAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(All Amounts in Thousands Except Share Amounts, Per Share Amounts or Unless Otherwise Noted)

The following table presents the carrying amount of indefinite-lived other intangible assets:	At
	March 31, 2013		December 31, 2012
Tradenames	$	24,875	$	24,875
Licenses	375		—
Total	$	25,250	$	24,875

Changes in other intangible assets are as follows:
Balance at December 31, 2012	$	79,340
Intangible assets acquired in 2013 - RICC acquisition	375
Less: Amortization expense	1,948
Balance at March 31, 2013	$	77,767

Estimated amortization of finite-lived other intangible assets for the next five years and thereafter ending December 31 is presented below:

Remainder of 2013	$	5,824
2014	7,760
2015	7,753
2016	7,128
2017	5,781
Thereafter	18,271
Total	$	52,517

11. Investments

The following table summarizes the Company's available-for-sale fixed maturity and equity securities at:

	March 31, 2013
Description of Security	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Obligations of the U.S. Treasury and U.S. Government agencies	$	26,779	$	654	$	(54	)	$	27,379
Municipal securities	18,407		399		(29		)	18,777
Corporate securities	69,254		2,585		(150		)	71,689
Mortgage-backed securities	195		1		—			196
Asset-backed securities	60		1		—			61
Total fixed maturity securities	$	114,695	$	3,640	$	(233	)	$	118,102
Common stock - publicly traded	$	39	$	5	$	—		$	44
Preferred stock - publicly traded	5,975		212		(1		)	6,186
Common stock - non-publicly traded	59		4		(5		)	58
Preferred stock - non-publicly traded	1,009		4		—			1,013
Total equity securities	$	7,082	$	225	$	(6	)	$	7,301

14

FORTEGRA FINANCIAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(All Amounts in Thousands Except Share Amounts, Per Share Amounts or Unless Otherwise Noted)

	December 31, 2012
Description of Security	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Obligations of the U.S. Treasury and U.S. Government agencies	$	22,424	$	761	$	(7	)	$	23,178
Municipal securities	16,636		413		(8		)	17,041
Corporate securities	67,627		2,461		(80		)	70,008
Mortgage-backed securities	285		4		—			289
Asset-backed securities	123		2		—			125
Total fixed maturity securities	$	107,095	$	3,641	$	(95	)	$	110,641
Common stock - publicly traded	$	39	$	3	$	—		$	42
Preferred stock - publicly traded	4,975		133		(1		)	5,107
Common stock - non-publicly traded	59		4		(5		)	58
Preferred stock - non-publicly traded	1,009		4		—			1,013
Total equity securities	$	6,082	$	144	$	(6	)	$	6,220

Pursuant to certain reinsurance agreements and statutory licensing requirements, the Company has deposited invested assets in custody accounts or insurance department safekeeping accounts. The Company is not permitted to remove invested assets from these accounts without prior approval of the contractual party or regulatory authority. The following table details the Company's restricted investments:

	At
	March 31, 2013		December 31, 2012
Fair value of restricted investments for special deposits required by state insurance departments	$	12,491	$	10,988
Fair value of restricted investments in trust pursuant to reinsurance agreements	6,967		6,954
Fair value of restricted investments	$	19,458	$	17,942

The amortized cost and fair value of fixed maturity securities by contractual maturity are shown below. Expected maturities will differ from contractual maturities because borrowers have the right to call or prepay obligations with or without call or prepayment penalties.

	At
	March 31, 2013				December 31, 2012
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	5,456	$	5,512	$	5,557	$	5,608
Due after one year through five years	65,641		67,823		58,378		60,323
Due after five years through ten years	24,490		25,197		24,983		25,900
Due after ten years	18,853		19,313		17,769		18,396
Mortgage-backed securities	195		196		285		289
Asset-backed securities	60		61		123		125
Total fixed maturity securities	$	114,695	$	118,102	$	107,095	$	110,641

15

FORTEGRA FINANCIAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(All Amounts in Thousands Except Share Amounts, Per Share Amounts or Unless Otherwise Noted)

The following table provides information on unrealized losses on investment securities that have been in an unrealized loss position for less than twelve months, and twelve months or greater at:

	March 31, 2013
	Less than Twelve Months						Twelve Months or Greater						Total
Description of Security	Fair Value		Unrealized Losses			# of Securities	Fair Value		Unrealized Losses			# of Securities	Fair Value		Unrealized Losses			# of Securities
Obligations of the U.S. Treasury and U.S. Government agencies	$	4,798	$	(54	)	16	$	—	$	—		—	$	4,798	$	(54	)	16
Municipal securities	3,315		(29		)	9	—		—			—	3,315		(29		)	9
Corporate securities	10,065		(130		)	13	180		(20		)	1	10,245		(150		)	14
Total fixed maturity securities	$	18,178	$	(213	)	38	$	180	$	(20	)	1	$	18,358	$	(233	)	39
Preferred stock - publicly traded	500		(1		)	1	—		—			—	500		(1		)	1
Common stock - non-publicly traded	—		—			—	39		(5		)	2	39		(5		)	2
Total equity securities	$	500	$	(1	)	1	$	39	$	(5	)	2	$	539	$	(6	)	3

	December 31, 2012
	Less than Twelve Months						Twelve Months or Greater						Total
Description of Security	Fair Value		Unrealized Losses			# of Securities	Fair Value		Unrealized Losses			# of Securities	Fair Value		Unrealized Losses			# of Securities
Obligations of the U.S. Treasury and U.S. Government agencies	$	857	$	(7	)	11	$	—	$	—		—	$	857	$	(7	)	11
Municipal securities	734		(8		)	1	—		—			—	734		(8		)	1
Corporate securities	12,625		(63		)	16	183		(17		)	1	12,808		(80		)	17
Total fixed maturity securities	$	14,216	$	(78	)	28	$	183	$	(17	)	1	$	14,399	$	(95	)	29
Preferred stock - publicly traded	198		(1		)	1	—		—			—	198		(1		)	1
Common stock - non-publicly traded	—		—			—	39		(5		)	2	39		(5		)	2
Total equity securities	$	198	$	(1	)	1	$	39	$	(5	)	2	$	237	$	(6	)	3

The Company does not intend to sell the investments that are in an unrealized loss position at March 31, 2013 and it is more likely than not that the Company will be able to hold these securities until full recovery of their amortized cost basis for fixed maturity securities or cost for equity securities. As of March 31, 2013, based on the Company's quarterly review, none of the fixed maturity or equity securities were deemed to be other-than-temporarily impaired based on the Company's analysis of the securities and intent to hold the securities until recovery.

The following table summarizes the gross proceeds from the sale of available-for-sale investment securities:

	For the Three Months Ended
	March 31, 2013		March 31, 2012
Gross proceeds from sales	$	412	$	2,050

The following table summarizes the gross realized gains and gross realized losses for both fixed maturity and equity securities and realized losses for other-than-temporary impairments for available-for-sale investment securities:

	For the Three Months Ended
	March 31, 2013		March 31, 2012
Gross realized gains	$	7	$	1
Gross realized losses	—		(4		)
Total net gains from investment sales	7		(3		)
Impairment write-downs (other-than-temporary impairments)	—		—
Net realized investment gains	$	7	$	(3	)

16

FORTEGRA FINANCIAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(All Amounts in Thousands Except Share Amounts, Per Share Amounts or Unless Otherwise Noted)

The following schedule details the components of net investment income:	For the Three Months Ended
	March 31, 2013			March 31, 2012
Fixed income securities	$	743		$	685
Cash on hand and on deposit	20			51
Common and preferred stock dividends	76			26
Notes receivable	72			63
Other income	114			35
Investment expenses	(116		)	(117		)
Net investment income	$	909		$	743

12. Reinsurance Receivables

The effects of reinsurance on premiums written and earned and on losses and loss adjustment expenses ("LAE") incurred are presented in the tables below:

Premiums	For the Three Months Ended
	March 31, 2013						March 31, 2012
	Written			Earned			Written			Earned
Direct and assumed	$	81,510		$	92,122		$	79,189		$	86,058
Ceded	(50,676		)	(58,980		)	(46,231		)	(54,086		)
Net	$	30,834		$	33,142		$	32,958		$	31,972

Losses and LAE incurred	For the Three Months Ended
	March 31, 2013			March 31, 2012
Direct and assumed	$	21,040		$	23,071
Ceded	(10,505		)	(11,805		)
Net losses and LAE incurred	$	10,535		$	11,266

The following table reflects the components of the reinsurance receivables:	At
	March 31, 2013		December 31, 2012
Prepaid reinsurance premiums (1):
Life	$	51,152	$	53,117
Accident and health	32,588		34,266
Property	80,893		85,805
Total	164,633		173,188
Ceded claim reserves:
Life	1,406		1,786
Accident and health	8,747		9,263
Property	9,083		8,663
Total ceded claim reserves recoverable	19,236		19,712
Other reinsurance settlements recoverable	13,038		11,088
Reinsurance receivables	$	196,907	$	203,988
(1)  Including policyholder account balances ceded.

The following table shows the amount included in reinsurance receivable that is recoverable from three unrelated insurers:

	At
	March 31, 2013		December 31, 2012
Total recoverable from three unrelated reinsurers	$	125,707	$	126,633

17

FORTEGRA FINANCIAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(All Amounts in Thousands Except Share Amounts, Per Share Amounts or Unless Otherwise Noted)

At March 31, 2013 and December 31, 2012, respectively, the three unrelated reinsurers were: London Life Reinsurance Company (A. M. Best Rating -A); London Life International Reinsurance Corporation (A. M. Best Rating-NR-3) and Spartan Property Insurance Company (A. M. Best Rating - Non-rated). Because Spartan Property Insurance Company does not maintain an A.M. Best rating, the related receivables are collateralized by assets held in trust accounts. At March 31, 2013, the Company does not believe there is a risk of loss as a result of the concentration of credit risk in the reinsurance program.

13. Note Payable

The Company's Notes Payable consisted of the following:	At
	March 31, 2013			December 31, 2012
Wells Fargo Bank, N.A., credit facility, maturing August 2017	$	91,750		$	89,438
Maximum balance allowed on Wells Fargo Bank, N.A credit facility	$	125,000		$	125,000
Interest rate at the end of the respective period:	2.71		%	2.76		%

Aggregate maturities for the Company's note payable at March 31, 2013 are as follows:

Remainder of 2013	$	3,750
2014	5,000
2015	5,000
2016	5,000
2017	73,000
Thereafter	—
Total	$	91,750

$125.0 million Secured Credit Agreement - Wells Fargo Bank, N.A.

At March 31, 2013, the Company had a $125.0 million secured credit agreement (the "Credit Agreement"), entered into on August 2, 2012, with a syndicate of lenders, among them Wells Fargo Bank, N.A., who also serves as administrative agent ("Wells Fargo" or the "Administrative Agent"). The Credit Agreement has a five year term and provides for a $50.0 million term loan facility (the "Term Loan Facility"), as well as a $75.0 million revolving credit facility (the "Revolving Facility" and collectively with the Term Loan Facility, the "Facilities") with a sub-limit of $10.0 million for swingline loans and $10.0 million for letters of credit. Subject to earlier termination, the Credit Agreement terminates on August 2, 2017. The Credit Agreement includes a provision pursuant to which, from time to time, the Company may request that the lenders in their discretion increase the maximum amount of commitments under the Facilities by an amount not to exceed $50.0 million. 

At the Company's election, borrowings under the Revolving Facility will bear interest either at the base rate plus an applicable interest margin or the adjusted LIBO rate plus an applicable interest margin; provided, however, that all swingline loans will be base rate loans. The base rate is a fluctuating interest rate equal to the highest of: (i) Wells Fargo's publicly announced prime lending rate; (ii) the federal funds rate plus0.50%; and (iii) the adjusted LIBO rate, determined on a daily basis for an interest period of one month, plus1.0%. The adjusted LIBO rate is the rate per annum obtained by dividing (i) the London interbank offered rate ("LIBOR") for such interest period by (ii) a percentage equal to 1.00 minusthe Eurodollar Reserve Percentage (as defined in the Credit Agreement). The interest margin over the adjusted LIBO rate, initially set at 2.75%, may increase (to a maximum amount of 3.0%) or decrease (to a minimum amount of 2.0%) based on changes in our leverage ratio. The interest margin over the base rate, initially set at 1.75%, may increase (to a maximum amount of 2.0%) or decrease (to a minimum amount of 1.0%) based on changes in our leverage ratio.

In addition to interest payable on the principal amount of indebtedness outstanding from time to time under the Credit Agreement, the Company is required to pay a commitment fee, initially equal to 0.40% per annum of the unused amount of the Revolving Facility. The percentage rate of such fee may increase (to a maximum amount of 0.45%) or decrease (to a minimum amount of 0.25%) based on changes in the Borrowers' leverage ratio. The amount of outstanding swingline loans is not considered usage of the Revolving Facility for the purpose of calculating the commitment fee. The Company is also required to pay letter of credit participation fees on the undrawn amount of all outstanding letters of credit. The Company paid fees of approximately $1.7 million to Wells Fargo in connection with the execution of the Credit Agreement, which have been capitalized and are being amortized using a straight line method over the life of the Credit Agreement.

The Company, at its option, may prepay any borrowing, in whole or in part, at any time and from time to time without premium or penalty. However, after the end of our fiscal year (commencing with the fiscal year ending December 31, 2015), the Company is

18

FORTEGRA FINANCIAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(All Amounts in Thousands Except Share Amounts, Per Share Amounts or Unless Otherwise Noted)

required to make mandatory principal prepayments of loans under the Facilities in an amount determined under the Credit Agreement based upon a percentage of the Company's Excess Cash Flow (as defined in the Credit Agreement) minus certain offset amounts relating to permitted acquisitions.

The Credit Agreement contains certain customary representations, warranties and covenants applicable to us for the benefit of the Administrative Agent and the lenders. The Company may not assign, sell, transfer or dispose of any collateral or effect certain changes to the Company's capital structure and the capital structure of our subsidiaries without the Administrative Agent's prior consent. The Company's obligations under the Facilities may be accelerated or the commitments terminated upon the occurrence of an event of default under the Credit Agreement, including payment defaults, defaults in the performance of affirmative and negative covenants, the inaccuracy of representations or warranties, bankruptcy and insolvency related defaults, cross defaults to other material indebtedness, defaults arising in connection with changes in control and other customary events of default.

The Credit Agreement also contains financial covenants which the Company must maintain. See the section below, "Financial Covenants" for a presentation of the Company's more significant covenants associated with the Credit Agreement.

Financial Covenants

At March 31, 2013 and December 31, 2012, respectively, the Company was required to comply with various financial covenants set forth in the Credit Agreement. The following describes the Credit Agreement's more significant financial covenants in effect at March 31, 2013 and the calculations used to arrive at each ratio:

Total Leverage Ratio - the ratio of (i) Consolidated Total Debt as of such date to (ii) Consolidated Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("Adjusted EBITDA")for the Measurement Period ending on or immediately prior to such date.

Fixed Charge Coverage Ratio - the ratio of (a) Consolidated Adjusted EBITDA less the actual amount paid by the Borrowers and their Subsidiaries in cash on account of Capital Expenditures less cash taxes paid by the Borrowers and their Subsidiaries to (b) Consolidated Fixed Charges, in each case for the Measurement Period ending on or immediately prior to such date.

Reinsurance Ratio - the ratio (expressed as a percentage) of (a) the aggregate amounts recoverable by the Borrowers and its Subsidiaries from reinsurers divided by (b) the sum of (i) policy and claim liabilities plus (ii) unearned premiums, in each case of the Borrowers and their Subsidiaries determined in accordance with GAAP.

RBC Ratio - the ratio (expressed as a percentage) of NAIC RBC (as defined in the NAIC standards) for any Regulated Insurance Company on an individual basis, calculated at the end of any Fiscal Year, to the "authorized control level" (as defined in the NAIC standards).

The following is a summary of the Credit Agreement's more significant financial covenants calculated at March 31, 2013, except for the RBC Ratios, which under the Credit Agreement reflect the ratios calculated as of the most recent fiscal year end, in this case December 31, 2012:

		Actual At
Covenant	Covenant Requirement	March 31, 2013
Total leverage ratio	not more than 3.50	3.13
Fixed charge coverage ratio	not less than 2.00	2.75
Reinsurance ratio	not less than 50%	69.0%
		Actual At
RBC Ratios:		December 31, 2012
RBC Ratio - Bankers Life of Louisiana	not less than 250%	469.0%
RBC Ratio - Southern Financial Life Insurance Company	not less than 250%	2,155.0%
RBC Ratio - Insurance Company of the South	not less than 250%	378.0%
RBC Ratio - Lyndon Southern Insurance Company	not less than 250%	255.0%
RBC Ratio - Life of the South Insurance Company	not less than 250%	386.0%

19

FORTEGRA FINANCIAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(All Amounts in Thousands Except Share Amounts, Per Share Amounts or Unless Otherwise Noted)

14. Derivative Financial Instruments - Interest Rate Swap

In April 2011, the Company entered into a forward interest rate swap (the "Swap") with Wells Fargo Bank, N.A, pursuant to which the Company swapped the floating rate portion of its outstanding preferred trust securities to a fixed rate. The Swap commenced in June 2012 and expires in June 2017 and is designated as a cash flow hedge.

The following table summarizes the fair value (including accrued interest) and related outstanding notional amounts of derivative instruments and indicates where within the Consolidated Balance Sheets each is reported:

	Balance Sheet Location	At
		March 31, 2013			December 31, 2012
Derivatives designated as cash flow hedging instruments:
Interest rate swap - notional value		$	35,000		$	35,000
Fair value of the Swap	Accrued expenses, accounts payable and other liabilities	$	(4,029	)	$	(4,338	)
Unrealized loss, net of tax, on the fair value of the Swap	AOCI	$	(2,619	)	$	(2,820	)
Variable rate of the interest rate swap		0.28		%	0.31		%
Fixed rate of the interest rate swap		3.47		%	3.47		%

The following table summarizes the pretax impact of the interest rate swap designated as a cash flow hedge on the Consolidated Financial Statements for the following periods:

	For the Three Months Ended
	March 31, 2013		March 31, 2012
Gain (loss) recognized in AOCI on the derivative-effective portion	$	260	$	(70	)
Loss reclassified from AOCI into income-effective portion	$	49	$	—
Gain (loss) recognized in income on the derivative-ineffective portion	$	—	$	—

The table below shows the estimated amount to be reclassified to earnings from AOCI during the next 12 months. These net losses reclassified into earnings are expected to primarily increase net interest expense related to the respective hedged item.

	At
	March 31, 2013
Estimated loss to be reclassified to earnings from AOCI during the next 12 months	$	1,118

15. Stock-Based Compensation

Stock Options

During the three months ended March 31, 2013, the Company granted 228,981 performance-based stock options under the Company's Long-Term Incentive Plan ("LTIP").The performance-based awards will vest, if at all, should the Company achieve three-year performance goals on or before December 31, 2015 for (i) net revenue (Compound Annual Growth Rate), (ii) earnings growth (Net Income) and (iii) profitable growth (Return on Average Equity). The performance metrics are equally weighted such that achievement of any one target results in vesting of one-third of the total equity award. If any of the target(s) are not attained by December 31, 2015, the one-third portion(s) of the award associated with the unattained target(s) will be canceled.

20

FORTEGRA FINANCIAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(All Amounts in Thousands Except Share Amounts, Per Share Amounts or Unless Otherwise Noted)

A summary of the Company's time- and performance-based stock option activity for the three months ended March 31, 2013 is presented below:

	Time-Based							Performance-Based
	Options Outstanding		Weighted Average Exercise Price		Options Exercisable	Weighted Average Exercise Price		Options Outstanding		Weighted Average Exercise Price		Options Exercisable	Weighted Average Exercise Price
Balance, December 31, 2012	2,016,231		$	4.38	1,690,040	$	3.66	185,000		$	8.00	—	$	—
Granted	—		—		—	—		228,981		8.89		—	—
Vested	—		—		8,642	9.86		—		—		—	—
Exercised	—		—		—	—		—		—		—	—
Canceled/forfeited	(18,750	)	7.84		—	—		(49,168	)	8.62		—	—
Balance, March 31, 2013	1,997,481		$	4.35	1,698,682	$	3.69	364,813		$	8.48	—	$	—
Weighted average remaining contractual term at March 31, 2013 (in years)	4.7				4.0			9.5				0

The following presents the Company's outstanding and exercisable time- and performance-based stock options by exercise price at March 31, 2013:

	Options Outstanding				Options Exercisable
Exercise Price	Option Shares Outstanding	Weighted Average Remaining Contractual Life (years)	Weighted Average Exercise Price		Option Shares Outstanding	Weighted Average Remaining Contractual Life (years)	Weighted Average Exercise Price
$3.03	787,500	2.63	$	3.03	787,500	2.63	$	3.03
3.25	757,963	4.57	3.25		757,963	4.57	3.25
7.84	238,750	8.25	7.84		83,339	8.25	7.84
7.93	15,000	9.50	7.93		—	—	—
7.97	110,000	9.42	7.97		—	—	—
8.00	170,000	9.25	8.00		—	—	—
8.89	194,813	9.76	8.89		—	—	—
11.00	88,268	7.71	11.00		69,880	7.71	11.00
Totals	2,362,294	5.44	$	4.99	1,698,682	3.98	$	3.69

Information on time- and performance-based stock options, vested and expected to vest, is as follows:	At
	March 31, 2013
Number of shares vested and expected to vest	2,327,362
Weighted average remaining contractual life (in years)	5.38
Weighted average exercise price per option (in dollars)	$	4.94
Intrinsic value	$	9,115

The weighted average assumptions used to estimate the fair values of all stock options granted is as follows:

	For the Three Months Ended
	March 31, 2013
Expected term (years)	8.83
Expected volatility	31.87	%
Expected dividends	—	%
Risk-free rate	1.54	%

Restricted Stock Awards

During the three months ended March 31, 2013, the Company granted 76,326 performance-based restricted stock awards under the LTIP. The performance-based restricted stock awards will vest based on the same criteria as the performance based stock options described in the above section titled, "Stock Options.".

21

FORTEGRA FINANCIAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(All Amounts in Thousands Except Share Amounts, Per Share Amounts or Unless Otherwise Noted)

In addition, during the three months ended March 31, 2013, the Company granted a total of 75,000 time-based restricted stock awards, equally distributed, to five of its Directors. The restricted stock vests equally on each of the three anniversaries of the grant date.

A summary of the Company's time- and performance-based restricted stock award activity for the three months ended March 31, 2013 is presented below:

	Time-Based				Performance-Based
	Shares		Weighted Average Grant Date Fair Value		Shares		Weighted Average Grant Date Fair Value
Shares outstanding at December 31, 2012	103,000		$	8.00	80,861		$	11.00
Granted	75,000		9.53		76,326		8.89
Vested	(20,000	)	7.24		—		—
Forfeited	—		—		(11,389	)	8.89
Shares outstanding at March 31, 2013	158,000		$	8.82	145,798		$	10.06

Stock-based Compensation Expense

Total time- and performance-based stock-based compensation expense and the related income tax (benefit), as recognized on the Consolidated Statements of Income, is as follows:

	For the Three Months Ended
	March 31, 2013			March 31, 2012
Personnel costs	$	184		$	120
Other operating expenses	118			59
Income tax benefit	(116		)	(68		)
Net stock-based compensation expense	$	186		$	111

Additional information on total non-vested stock-based compensation is as follows:	At
	March 31, 2013
	Stock Options		Restricted Stock Awards
Unrecognized compensation cost related to non-vested awards	$	973	$	1,544
Weighted-average recognition period (in years)	3.9		5.3

16. Income Taxes

Income taxes for interim periods have been computed using an estimated annual effective tax rate. This rate is revised, if necessary,

at the end of each successive interim period to reflect the current estimate of the annual effective tax rate.

The provision for income taxes consisted of the following:	For the Three Months Ended
	March 31, 2013		March 31, 2012
Current	$	308	$	1,951
Deferred	1,046		(64		)
Income taxes	$	1,354	$	1,887

22

FORTEGRA FINANCIAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(All Amounts in Thousands Except Share Amounts, Per Share Amounts or Unless Otherwise Noted)

The reconciliation of the income tax expense at the federal statutory income tax rate of 35% is as follows:

	For the Three Months Ended
	March 31, 2013					March 31, 2012
	Amount			Percent of Pre-tax Income		Amount			Percent of Pre-tax Income
Income taxes at federal income tax rate	$	1,632		35.00	%	$	1,862		35.00	%
Effect of:
Small life deduction	(109		)	(2.34	)	(114		)	(2.14	)
Non-deductible expenses	26			0.56		47			0.88
Tax exempt interest	(31		)	(0.67	)	(33		)	(0.62	)
State taxes	170			3.64		126			2.37
Prior year tax true-up	—			—		(1		)	(0.01	)
Non-controlling interest	(286		)	(6.14	)	—			—
Other, net	(48		)	(1.02	)	—			—
Income taxes	$	1,354		29.03	%	$	1,887		35.48	%

The Company's majority-owned subsidiary, ProtectCELL, is taxed as a partnership, therefore, the non-controlling interest is recorded on a pre-tax basis, and the tax effect is shown in the income tax rate reconciliation in the above table. The Company records tax balances only on its ownership interest in ProtectCELL.

At December 31, 2012, the Company had a net operating loss carry forward of $0.5 million, which is subject to certain limitations under Internal Revenue Code ("IRC") Section 382 and will begin to expire in 2019. The Company expects full utilization of the net operating loss carryforward by the end of 2013.

In addition, the Company has research and experimentation (research) tax credit carry forwards for federal and state income tax purposes in the amount of $0.5 million and $0.2 million, respectively. The federal research credit is also subject to certain limitations under IRC Section 382. The research credit carry forwards will begin to expire in 2019. As part of the valuation determinations of the subsidiary in which the research credit was generated, the Company recorded a $0.2 million liability against the research credit carryforward deferred tax asset.

The Company has reviewed its uncertain tax positions and management has concluded that there are no additional amounts required to be recorded in accordance with ASC 740-10.

As of December 31, 2012, the Company was under examination by the Internal Revenue Service ("IRS") for the 2009 and 2010 tax years. In February 2013, the IRS completed its field audit for those tax years and in March 2013, we received notice from the IRS that the audit report has been fully approved. The Company has agreed to those findings and paid $57.0 thousand, which was expensed during the three months ended March 31, 2013.

23

FORTEGRA FINANCIAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(All Amounts in Thousands Except Share Amounts, Per Share Amounts or Unless Otherwise Noted)

17. Fair Value of Financial Instruments 

The carrying and fair values of financial instruments are as follows:	At
	March 31, 2013				December 31, 2012
	Carrying Value		Fair Value		Carrying Value		Fair Value
Financial assets:
Cash and cash equivalents	$	14,339	$	14,339	$	15,209	$	15,209
Fixed maturity securities:
Obligations of the U.S. Treasury and U.S. Government agencies	27,379		27,379		23,178		23,178
Municipal securities	18,777		18,777		17,041		17,041
Corporate securities	71,689		71,689		70,008		70,008
Mortgage-backed securities	196		196		289		289
Asset-backed securities	61		61		125		125
Equity securities:
Common stock - publicly traded	44		44		42		42
Preferred stock - publicly traded	6,186		6,186		5,107		5,107
Common stock - non-publicly traded	58		58		58		58
Preferred stock - non-publicly traded	1,013		1,013		1,013		1,013
Notes receivable	5,045		5,045		11,290		11,290
Accounts and premiums receivable, net	33,883		33,883		27,026		27,026
Other receivables	28,189		28,189		13,511		13,511
Short-term investments	1,222		1,222		1,222		1,222
Total financial assets	$	208,081	$	208,081	$	185,119	$	185,119
Financial liabilities:
Notes payable	$	91,750	$	91,750	$	89,438	$	89,438
Preferred trust securities	35,000		35,000		35,000		35,000
Interest rate swap	4,029		4,029		4,338		4,338
Total financial liabilities	$	130,779	$	130,779	$	128,776	$	128,776

The Company's financial assets and liabilities accounted for at fair value by level within the fair value hierarchy are as follows:

March 31, 2013			Fair Value Measurements Using:
			Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs
	Fair Value		(Level 1)		(Level 2)		(Level 3)
Financial Assets:
Fixed maturity securities:
Obligations of the U.S. Treasury and U.S. Government agencies	$	27,379	$	—	$	27,379	$	—
Municipal securities	18,777		—		18,777		—
Corporate securities	71,689		—		71,689		—
Mortgage-backed securities	196		—		196		—
Asset-backed securities	61		—		61		—
Equity securities:
Common stock - publicly traded	44		44		—		—
Preferred stock - publicly traded	6,186		6,186		—		—
Common stock - non-publicly traded	58		—		—		58
Preferred stock - non-publicly traded	1,013		—		—		1,013
Short-term investments	1,222		1,222		—		—
Total assets	$	126,625	$	7,452	$	118,102	$	1,071
Financial Liabilities:
Interest rate swap	$	4,029	$	—	$	4,029	$	—

24

FORTEGRA FINANCIAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(All Amounts in Thousands Except Share Amounts, Per Share Amounts or Unless Otherwise Noted)

At December 31, 2012			Fair Value Measurements Using:
			Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs
	Fair Value		(Level 1)		(Level 2)		(Level 3)
Financial Assets:
Fixed maturity securities:
Obligations of the U.S. Treasury and U.S. Government agencies	$	23,178	$	—	$	23,178	$	—
Municipal securities	17,041		—		17,041		—
Corporate securities	70,008		—		69,956		52
Mortgage-backed securities	289		—		289		—
Asset-backed securities	125		—		125		—
Equity securities:
Common stock - publicly traded	42		42		—		—
Preferred stock - publicly traded	5,107		5,107		—		—
Common stock - non-publicly traded	58		—		—		58
Preferred stock - non-publicly traded	1,013		—		—		1,013
Short-term investments	1,222		1,222		—		—
Total Assets	$	118,083	$	6,371	$	110,589	$	1,123
Financial Liabilities:
Interest rate swap	$	4,338	$	—	$	4,338	$	—

There were no transfers between Level 1 and Level 2 for the three months ended March 31, 2013. For the three months ended March 31, 2013, 1 corporate security was transferred from Level 3 to Level 2. This transfer occurred due to the availability of Level 2 pricing for the corporate security, which was unavailable in prior periods. The Company's use of Level 3 unobservable inputs included 6 individual securities that accounted for 0.8% of total investments at March 31, 2013. The Company utilized an independent third party pricing service to value 4 of the Level 3 securities. The value of 2 equity securities in Level 3, which are non-publicly traded preferred stocks, were calculated by the Company. One of the equity securities, with a value of $1.0 million was valued by taking into account the strength of the issuer's parent company guaranteeing the dividend of the issuer. The second Level 3 equity security, with a value of $13.0 thousand was valued by estimating the total value of the Class-A shares outstanding by the issuer and a review of the company's audited financial statements. At December 31, 2012, the Company had 7 individual securities valued under Level 3 that accounted for 1.0% of total investments.

The following table summarizes the changes in Level 3 assets measured at fair value:	For the Three Months Ended
	March 31, 2013			March 31, 2012
Beginning balance, January 1,	$	1,123		$	1,204
Total realized (unrealized) investment gains (losses):
Included in net income	—			—
Included in other comprehensive (loss)	(25		)	(22		)
Sales	—			(22		)
Transfers (out of) Level 3	(27		)	(1		)
Ending balance, March 31,	$	1,071		$	1,159

18. Statutory Reporting and Insurance Subsidiaries Dividend Restrictions

The Company's insurance subsidiaries may pay dividends to the Company, subject to statutory restrictions. Payments in excess of statutory restrictions (extraordinary dividends) to the Company are permitted only with prior approval of the insurance departments of the applicable state of domicile. All dividends from subsidiaries were eliminated in the Consolidated Financial Statements.

25

FORTEGRA FINANCIAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(All Amounts in Thousands Except Share Amounts, Per Share Amounts or Unless Otherwise Noted)

The following table sets forth the dividends paid to the Company by its insurance company subsidiaries for the following periods:

	For the Three Months Ended		For the Twelve Months Ended
	March 31, 2013		December 31, 2012
Ordinary dividends	$	231	$	2,783
Extraordinary dividends	—		—
Total dividends	$	231	$	2,783

The following table details the combined statutory capital and surplus of the Company's insurance subsidiaries, the required minimum statutory capital and surplus, as required by the laws of the states in which they are domiciled and the combined amount available for ordinary dividends of the Company's insurance subsidiaries for the following periods:

	At
	March 31, 2013		December 31, 2012
Combined statutory capital and surplus of the Company's insurance subsidiaries	$	61,181	$	53,885
Required minimum statutory capital and surplus	$	19,500	$	15,300
Amount available for ordinary dividends of the Company's insurance subsidiaries	$	4,228	$	4,500

Under the NAIC's Risk-Based Capital Act of 1995, a company's Risk-Based Capital ("RBC") is calculated by applying certain risk factors to various asset, claim and reserve items. If a company's adjusted surplus falls below calculated RBC thresholds, regulatory intervention or oversight is required. The Company's insurance subsidiaries' RBC levels, as calculated in accordance with the NAIC's RBC instructions, exceeded all RBC thresholds as of March 31, 2013 and December 31, 2012, respectively.

19. Commitments and Contingencies

Commitments

The Company, from time to time, may in the ordinary course of normal business enter into certain contractual obligations or commitments.

As part of the 2012 acquisition of ProtectCELL, the Company has a conditional commitment to provide up to $10.2 million of additional capital ("Additional Fortegra Capital Contributions") to ProtectCELL if the board of directors of ProtectCELL (the "PC Board") determines that ProtectCELL requires additional funds to support expansion and growth, or other appropriate business needs.

The Company is obligated to evaluate any such funding request received from the PC Board in good faith to determine whether in the Company's reasonable business judgment the requested capital should be contributed. Fortegra is not required to honor the funding request from the PC Board if it in good faith deems the request to be imprudent or unjustified.

The benefits of such additional funding would inure to the Company and to the non-controlling ownership interest of ProtectCELL, in proportion to their respective ownership interests. However, in return for each $1,000 of Additional Fortegra Capital Contributions, the Company would receive one Series A Preferred Unit. Any unreturned Series A Preferred contribution is deducted from ProtectCELL's valuation in determining the option price.

Contingencies

The Company is a party to claims and litigation in the normal course of its operations. Management believes that the ultimate outcome of these matters will not have a material adverse effect on the consolidated financial condition, results of operations or cash flows of the Company.

In the Payment Protection segment, the Company is currently a defendant in lawsuits that relate to marketing and/or pricing issues that involve claims for punitive, exemplary or extra-contractual damages in amounts substantially in excess of the covered claim.  Such litigation includes Lawson v. Life of the South Insurance Co., which was filed on March 13, 2006, in the Superior Court of Muscogee County, Georgia, and later moved to the United States District Court for the Middle District of Georgia, Columbus Division.  The allegations involve the Company's alleged duty to refund unearned premiums on credit insurance policies, even when the Company has not been informed of the payoff of the underlying finance contract. The action seeks an injunction requiring remedial action, as

26

FORTEGRA FINANCIAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(All Amounts in Thousands Except Share Amounts, Per Share Amounts or Unless Otherwise Noted)

well as a variety of damages, including punitive damages and attorney fees and costs.  The action was brought as a class action, however the Company's May 11, 2012 Motion to Strike or Dismiss Plaintiffs' Class Action Allegations, or in the Alternative, to Deny Class Certification was granted on September 28, 2012.  Plaintiff's appeal of such ruling was denied on December 7, 2012.  The merits discovery phase continues in the individual, underlying case.

Also in the Payment Protection segment, the Company is currently a defendant in Mullins v. Southern Financial Life Insurance Co., which was filed on February 2, 2006, in the Pike Circuit Court, in the Commonwealth of Kentucky.  A class was certified on June 25, 2010.  At issue is the duration or term of coverage under certain policies.  The action alleges violations of the Consumer Protection Act and certain insurance statutes, as well as common law fraud.  The action seeks compensatory and punitive damages, attorney fees and interest.  The parties are currently involved in the merits discovery phase and discovery disputes have arisen.  Plaintiffs filed a Motion for Sanctions on April 5, 2012 in connection with the Company's efforts to locate and gather certificates and other documents from the Company's agents.  While the court did not award sanctions, it did order the Company to subpoena certain records from its agents.  The Company filed an appeal of this order, which was denied on August 31, 2012.  The Company is currently appealing the denial in the Kentucky Supreme Court. To date, no trial date has been set.

In the Motor Clubs business in the Payment Protection segment, the Company is currently a Defendant in Dill and Thurman v. Continental Car Club, Inc. and Fortegra Financial Corp., which was filed on August 18, 2011 in the Tennessee Chancery Court, Rhea County.  The Plaintiffs assert claims for breach of their employment and non-competition agreements, among other claims, and seek injunctive relief and damages in connection with the Company's purchase of Continental Car Club, Inc. from Plaintiffs in May 2010.  The trial court ruled in November 2012 that Plaintiffs resigned for good reason from the Company, the result of which is that the Company can enforce the non-competition and non-solicitation provisions contained in the Plaintiffs' employment agreements for a period of up to two years, but that the Company is required to pay Plaintiffs base salary and accrued benefits during such period. As of March 31, 2013, the value of such salary and benefits is $0.6 million; the value would increase over time through the two-year period to an estimated maximum of approximately $0.8 million.  The Company has filed for an appeal of this ruling and will vigorously defend its position.  The Company believes that it is not probable that the judgment will be upheld through the appeal process, and that reasonably possible outcomes range from $0 to the amount of the judgment.  Accordingly, the Company has not recorded a charge with respect to this loss contingency as of March 31, 2013.

The Company considers such litigation customary in its lines of business.  In management's opinion, based on information available at this time, the ultimate resolution of such litigation, which it is vigorously defending, should not be materially adverse to the financial position, results of operations or cash flows of the Company. It should be noted that large punitive damage awards, bearing little relation to actual damages sustained by plaintiffs, have been awarded in certain states against other companies in the credit insurance business. Loss contingencies may be taken as developments warrant, although such amounts are not reasonably estimable at this time.

20. Segment Results

The Company conducts business through three business segments: (i) Payment Protection; (ii) BPO; and (iii) Brokerage. The revenue for each segment is presented to reflect the operating characteristics of the segment. The Company allocates certain revenues and expenses to the segments. These items consist primarily of corporate-related income, transaction related costs, executive stock compensation and other overhead expenses. Segment assets are not presented to the Company's chief operating decision maker for operational decision-making and therefore are not disclosed in the accompanying table.

The Company measures the profitability of its business segments with the allocation of Corporate revenues and expenses and without taking into account amortization, depreciation, interest expense and income taxes. The Company refers to this financial performance measure as segment EBITDA (earnings before interest, taxes, depreciation and amortization). The Company's financial measure of segment EBITDA meets the definition of a Non-GAAP financial measure and is not a recognized term under U.S. GAAP, nor is it an alternative to the U.S. GAAP financial measures presented in this Form 10-Q. The Non-GAAP financial measure in this Form 10-Q should be used in addition to, but not as a substitute for, the U.S. GAAP financial measures presented elsewhere in this Form 10-Q. The Company believes that this Non-GAAP financial measure provides useful information to management, analysts and investors regarding financial and business trends relating to the Company's results of operations and financial condition. The variability of the Company's segment EBITDA is significantly affected by segment net revenues because a large portion of the Company's operating expenses are fixed. The Company's industry peers may also provide similar supplemental Non-GAAP financial measures, although they may not use the same or comparable terminology and may not make identical adjustments. 

27

FORTEGRA FINANCIAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(All Amounts in Thousands Except Share Amounts, Per Share Amounts or Unless Otherwise Noted)

The following table presents the Company's business segment results:

	For the Three Months Ended
	March 31, 2013			March 31, 2012
Segment Net Revenue
Payment Protection
Service and administrative fees	$	34,200		$	17,803
Ceding commission	7,163			7,064
Net investment income	909			743
Net realized investment gains (losses)	7			(3		)
Other income	91			72
Net earned premium	33,142			31,972
Net losses and loss adjustment expenses	(10,535		)	(11,266		)
Member benefit claims	(8,978		)	(1,303		)
Commissions	(35,362		)	(31,988		)
Total Payment Protection Net Revenue	20,637			13,094
BPO	4,214			4,205
Brokerage
Brokerage commissions and fees	9,731			9,520
Service and administrative fees	444			503
Total Brokerage	10,175			10,023
Total segment net revenue	35,026			27,322
Operating Expenses
Payment Protection	14,892			7,913
BPO	3,556			3,133
Brokerage	7,203			7,085
Corporate	—			—
Total operating expenses	25,651			18,131
EBITDA
Payment Protection	5,745			5,181
BPO	658			1,072
Brokerage	2,972			2,938
Corporate	—			—
Total EBITDA	9,375			9,191
Depreciation and Amortization
Payment Protection	1,775			849
BPO	834			503
Brokerage	657			868
Total depreciation and amortization	3,266			2,220
Interest Expense
Payment Protection	957			1,012
BPO	177			267
Brokerage	310			373
Total interest expense	1,444			1,652
Income (loss) before income taxes and non-controlling interests
Payment Protection	3,013			3,320
BPO	(353		)	302
Brokerage	2,005			1,697
Corporate	—			—
Total income before income taxes and non-controlling interests	4,665			5,319
Income taxes	1,354			1,887

28

FORTEGRA FINANCIAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(All Amounts in Thousands Except Share Amounts, Per Share Amounts or Unless Otherwise Noted)

	For the Three Months Ended
	March 31, 2013		March 31, 2012
Segment Net Revenue
Less: net income attributable to non-controlling interests	818		18
Net income	$	2,493	$	3,414

The following table reconciles segment information to the Company's Consolidated Statements of Income and provides a summary of other key financial information for each segment:

Reconciliation of Segment Net Revenue to Total Revenue and EBITDA to Net Income	For the Three Months Ended
	March 31, 2013		March 31, 2012
Segment Net Revenue
Payment Protection	$	20,637	$	13,094
BPO	4,214		4,205
Brokerage	10,175		10,023
Segment net revenues	35,026		27,322
Net losses and loss adjustment expenses	10,535		11,266
Member benefit claims	8,978		1,303
Commissions	35,362		31,988
Total segment revenue	89,901		71,879
Operating Expenses
Payment Protection	14,892		7,913
BPO	3,556		3,133
Brokerage	7,203		7,085
Corporate	—		—
Total operating expenses	25,651		18,131
Net losses and loss adjustment expenses	10,535		11,266
Member benefit claims	8,978		1,303
Commissions	35,362		31,988
Total operating expenses before depreciation, amortization and interest expense	80,526		62,688
EBITDA
Payment Protection	5,745		5,181
BPO	658		1,072
Brokerage	2,972		2,938
Corporate	—		—
Total EBITDA	9,375		9,191
Depreciation and amortization
Payment Protection	1,775		849
BPO	834		503
Brokerage	657		868
Total depreciation and amortization	3,266		2,220
Interest Expense
Payment Protection	957		1,012
BPO	177		267
Brokerage	310		373

29

FORTEGRA FINANCIAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(All Amounts in Thousands Except Share Amounts, Per Share Amounts or Unless Otherwise Noted)

Reconciliation of Segment Net Revenue to Total Revenue and EBITDA to Net Income	For the Three Months Ended
	March 31, 2013			March 31, 2012
Segment Net Revenue
Total interest expense	1,444			1,652
Income (loss) before income taxes and non-controlling interests
Payment Protection	3,013			3,320
BPO	(353		)	302
Brokerage	2,005			1,697
Corporate	—			—
Total income before income taxes and non-controlling interests	4,665			5,319
Income taxes	1,354			1,887
Less: net income attributable to non-controlling interests	818			18
Net income	$	2,493		$	3,414

21. Related Party Transactions

In conjunction with the December 31, 2012 acquisition of ProtectCELL, the Company assumed an office space lease between ProtectCELL and 39500 High Pointe, LLC ("High Pointe"). The ownership of High Pointe includes three members who were the founding members of ProtectCELL and are now employees of the Company. The Company made lease payments to High Pointe for the three months ended March 31, 2013, which are reflected in the table below.

At December 31, 2012, ProtectCELL held a $6.1 million note receivable carrying an interest rate of 8.00% from High Pointe, which was fully secured by a mortgage on the office building owned by High Pointe. On March 15, 2013, ProtectCELL received $6.1 million from High Pointe, representing the full payoff of the outstanding balance of the note receivable.

An executive officer of ProtectCELL owns multiple wireless retail locations, which sell ProtectCELL protection plans to wireless retail customers. For the three months ended March 31, 2013, the Company recorded income and paid commissions for this related party arrangement, which are reflected in the table below.

In conjunction with the December 31, 2012 acquisition of 4Warranty, the Company assumed an office space lease between 4Warranty and Source International Incorporated ("Source"), effective January 1, 2013. The ownership of Source is comprised of two individuals who have consulting relationships with the Company. The Company paid lease payments to Source for the three months ended March 31, 2013, which are reflected in the table below.

In January 2012, the Company recorded a receivable due from an officer of the Company relating to the 2010 acquisition of South Bay Acceptance Corporation, which had a balance of $0.1 million at March 31, 2013 and December 31, 2012, respectively.

In December 2011, the Company entered into an information technology support services agreement (the "IT Agreement") with a company for which a member serving on the Company's Board of Directors also serves on the board of the company receiving the information support services. The IT Agreement has no set term and calls for a total of $0.3 million plus reimbursement of expenses to be received by the Company over the duration of the agreement. The Company recorded income from the IT Agreement during the three months ended March 31, 2012, which is reflected in the table below.

In December 2011, the Company entered into a marketing and referral agreement (the "Marketing Agreement") with a company in which a member serving on the Company's Board of Directors also serves on the board of the company providing the marketing services (the "Marketer"). The Marketing Agreement has a five year term and requires the Company to pay the Marketer a per account fee per month based on the number of enrolled customers the Marketer obtains for the Company. The Company did not make any payments to the Marketer during the three months ended March 31, 2013 or 2012, respectively.

30

FORTEGRA FINANCIAL CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(All Amounts in Thousands Except Share Amounts, Per Share Amounts or Unless Otherwise Noted)

The following table details the amounts recorded on the Company's Consolidated Balance Sheets and Consolidated Statements of Income resulting from related party transactions:

	For the Three Months Ended
	March 31, 2013		March 31, 2012
Income recorded by the Company from related parties	$	507	$	132
Related party interest income on notes receivable	$	21	$	—
Related party lease expense	$	123	$	—
Related party commissions paid	$	205	$	—
	At
	March 31, 2013		December 31, 2012
Notes receivable from related parties	$	134	$	6,269

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") represents an overview of our results of operations and financial condition and should be read in conjunction with the Consolidated Financial Statements and Notes thereto included in Part I, of this Form 10-Q. Except for the historical information contained herein, the discussions in MD&A contain forward-looking statements that involve risks and uncertainties. Our future results could differ materially from those discussed herein. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in "Item 1A. Risk Factors" of this Form 10-Q.

Executive Summary

Our net income for the three months ended March 31, 2013 decreased $0.9 million, or 27.0%, to $2.5 million from $3.4 million for the three months ended March 31, 2012. The 2013 results include $1.2 million of pre-tax costs associated with the consolidation of operations charges. Earnings per diluted share decreased 25.0% to $0.12 for the three months ended March 31, 2013 from $0.16 for the same period in 2012.

For the three months ended March 31, 2013, our total revenues increased $18.0 million, or 25.1%, to $89.9 million from $71.9 million for the same period in 2012, with the increase in revenues primarily attributable to our December 31, 2012 acquisitions of ProtectCELL and 4Warranty, which accounted for $15.4 million and $0.7 million of the increase, respectively.

Total expenses increased $18.7 million, or 28.1%, to $85.2 million for the three months ended March 31, 2013 from $66.6 million for the same period in 2012. The majority of the increase was due to expenses from our 2012 acquisitions of ProtectCELL and 4Warranty, which added $14.1 million and $0.5 million to expenses, respectively. The 2013 expenses also included $1.2 million in cost associated with our previously announced consolidation of operations plan, discussed below.

In January 2013, we announced a plan to consolidate our fulfillment, claims administration and information technology functions for all our insurance related products (the "Plan"). Prior to the Plan, such functions resided in individual business units. The decision was part of our efforts to streamline operations, focus resources and provide first in class service to our customers. During the first quarter of 2013, approximately 40 employee and contract positions were eliminated. We estimate that the Plan will result in annual pre-tax savings of approximately $4.0 million.

On February 1, 2013, we acquired 100% of the outstanding stock of RICC, from subsidiaries of the Kemper Corporation ("Kemper") for $4.8 million.  RICC is a property/casualty insurance company domiciled and licensed in California, which we intend to use for geographic expansion in our Payment Protection business.  RICC had, at the time of purchase, no policies in force, and all remaining claim liabilities for previously issued policies are fully reinsured by Kemper's subsidiary, Trinity Universal Insurance Company.

Critical Accounting Policies

Fortegra's critical accounting policies involving significant judgments and assumptions used in the preparation of the Consolidated Financial Statements as of March 31, 2013 are unchanged from the disclosures presented in the MD&A of Fortegra's 2012 Annual Report on Form 10-K.

Recently Issued Accounting Standards

For a discussion of recently issued accounting standards, please see the Note "Recent Accounting Standards" of the Notes to Consolidated Financial Statements of this Form 10-Q.

COMPONENTS OF REVENUES AND EXPENSES

For a complete discussion of our "Components of Revenues and Expenses," please see our MD&A in Part II, Item 7, of our 2012 Annual Report on Form 10-K.

RESULTS OF OPERATIONS

The following tables set forth our Consolidated Statements of Income for the following periods:

	For the Three Months Ended
	March 31, 2013		March 31, 2012			Change from 2012			% Change from 2012
Revenues:
Service and administrative fees	$	38,858	$	22,511		$	16,347		72.6	%
Brokerage commissions and fees	9,731		9,520			211			2.2
Ceding commission	7,163		7,064			99			1.4
Net investment income	909		743			166			22.3
Net realized investment gains (losses)	7		(3		)	10			(333.3	)
Net earned premium	33,142		31,972			1,170			3.7
Other income	91		72			19			26.4
Total revenues	89,901		71,879			18,022			25.1
Expenses:
Net losses and loss adjustment expenses	10,535		11,266			(731		)	(6.5	)
Member benefit claims	8,978		1,303			7,675			589.0
Commissions	35,362		31,988			3,374			10.5
Personnel costs	15,846		11,392			4,454			39.1
Other operating expenses	9,805		6,739			3,066			45.5
Depreciation and amortization	1,318		738			580			78.6
Amortization of intangibles	1,948		1,482			466			31.4
Interest expense	1,444		1,652			(208		)	(12.6	)
Total expenses	85,236		66,560			18,676			28.1
Income before income taxes and non-controlling interests	4,665		5,319			(654		)	(12.3	)
Income taxes	1,354		1,887			(533		)	(28.2	)
Income before non-controlling interests	3,311		3,432			(121		)	(3.5	)
Less: net income attributable to non-controlling interests	818		18			800			4,444.4
Net income	$	2,493	$	3,414		$	(921	)	(27.0	)%
Earnings per share:
Basic	$	0.13	$	0.17
Diluted	$	0.12	$	0.16
Weighted average common shares outstanding:
Basic	19,556,743		19,904,819
Diluted	20,625,041		20,739,196

31

REVENUES

Service and Administrative Fees

Service and administrative fees for the three months ended March 31, 2013 increased $16.3 million, or 72.6%, to $38.9 million from $22.5 million for the three months ended March 31, 2012. The increase resulted primarily from $15.3 million and $0.7 million in current period revenues attributable to the 2012 acquisition of ProtectCELL and 4Warranty, respectively. 

Brokerage Commissions and Fees

Brokerage commissions and fees for the three months ended March 31, 2013 increased $0.2 million, or 2.2%, to $9.7 million from $9.5 million for the three months ended March 31, 2012. For the 2013 period, B&G contributed $0.3 million to the increase while eReinsure decreased $0.1 million principally due to lower license fees.

Ceding Commission

Ceding commission for the three months ended March 31, 2013 increased $0.1 million, or 1.4%, to $7.2 million from $7.1 million for the three months ended March 31, 2012. This increase primarily resulted from improved underwriting results due to growth in earned premiums and favorable loss experience.

Net Investment Income

Net investment income for the three months ended March 31, 2013 increased $0.2 million, or 22.3%, to $0.9 million compared to $0.7 million for the three months ended March 31, 2012. The increase from 2012 was principally due to a higher average balance of fixed income securities. Yields on our investment portfolio increased to approximately 2.96% for the three months ended March 31, 2013 from approximately 2.65% for the three months ended March 31, 2012, as a result of our strategy of increasing the purchase of higher yielding corporate bonds.

Net Realized Investment Gains (Losses)

Net realized gains on the sale of investments totaled $7.0 thousand for the three months ended March 31, 2013 compared to net realized losses of $3.0 thousand for the three months ended March 31, 2012 and were insignificant to our operations for the periods presented.

Net Earned Premium

Net earned premium for the three months ended March 31, 2013 increased $1.2 million, or 3.7%, to $33.1 million from $32.0 million for the three months ended March 31, 2012. For the 2013 period, direct and assumed earned premium increased $6.1 million resulting from increased production from existing clients and new clients distributing our credit insurance and warranty products and geographic expansion. Because of this increase, ceded earned premiums increased $4.9 million, or 9.0%, for the three months ended March 31, 2013. On average, we maintained a 64.0% overall cession rate of direct and assumed earned premium for the three months ended March 31, 2013 compared with 62.8% for the 2012 period.

Other Income

Other income was relatively consistent for the periods presented and totaled $0.1 million and $0.1 million for the three months ended March 31, 2013 and 2012, respectively.

EXPENSES

Net Losses and Loss Adjustment Expenses

Net losses and loss adjustment expenses for the three months ended March 31, 2013 decreased $0.7 million, or 6.5% to $10.5 million, from $11.3 million for the three months ended March 31, 2012.  Our net losses and loss adjustment expense ratio improved from 35.2% in 2012 to 31.8% in 2013. The decrease in net losses and loss adjustment expenses was primarily driven by unfavorable loss experience in the prior period. For the 2013 period, our direct and assumed losses decreased by $2.0 million, or 8.8%, as compared with the same period in 2012. For the 2013 period, our ceded losses were lower by $1.3 million, or 11.0%, compared with the same period in 2012, partially offsetting the decrease in direct and assumed losses and loss adjustment expense. On average, we maintained a 49.9% and 51.2% overall cession rates of direct and assumed losses and loss adjustment expenses for the three months ended March 31, 2013 and 2012, respectively.

Member Benefit Claims

Member benefit claims for the three months ended March 31, 2013 increased $7.7 million, or 589%, to $9.0 million, from $1.3 million for the three months ended March 31, 2012. The increase resulted from the 2012 acquisition of ProtectCELL which added $7.8 million, offset by a $0.1 million reduction in Motor Club claims.

Commissions

Commissions for the three months ended March 31, 2013 increased $3.4 million, or 10.5%, to $35.4 million, from $32.0 million for the three months ended March 31, 2012. The increase resulted primarily from $1.4 million in commissions attributable to the 2012 acquisition of ProtectCELL, as well as increases of $1.2 million in our credit insurance products due to growth in earned premiums and underwriting profits, and $0.7 million from the Motor Clubs due to growth particularly in products with high commission rates.

32

Personnel Costs

Personnel costs for the three months ended March 31, 2013 increased $4.5 million, or 39.1%, to $15.8 million from $11.4 million for the three months ended March 31, 2012. The increase resulted primarily from $2.0 million and $0.3 million for the 2012 acquisitions of ProtectCELL and 4Warranty, respectively and $1.2 million in costs associated with the Plan. Stock-based compensation expense included in personnel costs totaled $0.2 million and $0.1 million for the three months ended March 31, 2013 and 2012, respectively.

Other Operating Expenses

Other operating expenses for the three months ended March 31, 2013 increased $3.1 million, or 45.5%, to $9.8 million from $6.7 million for the three months ended March 31, 2012. These expenses increased primarily due to the 2012 ProtectCELL and 4Warranty acquisitions, which added $2.0 million and $0.2 million, respectively.

Depreciation and Amortization

Depreciation and amortization expense for the three months ended March 31, 2013 increased $0.6 million or 78.6% to $1.3 million from $0.7 million for the three months ended March 31, 2012, due to higher levels of depreciable and amortizable assets in service during 2013 compared to 2012.

Amortization of Intangibles

Amortization expense on intangibles for the three months ended March 31, 2013 increased $0.5 million or 31.4% to $1.9 million from $1.5 million for the three months ended March 31, 2012. The increase was primarily due to the 2012 acquisitions of ProtectCELL and 4Warranty, which increased amortization by $0.7 million and $0.1 million, respectively.

Interest Expense

Interest expense for the three months ended March 31, 2013 decreased $0.2 million, or 12.6%, to $1.4 million from $1.7 million for the three months ended March 31, 2012 and was positively impacted by a lower interest rate on outstanding borrowings and our new credit facility with Wells Fargo Bank, N.A., which took effect on August 2, 2012. These positive factors were slightly offset by higher outstanding borrowings for the three months ended March 31, 2013 compared to the same period in 2012.

Income Taxes

Income taxes for the three months ended March 31, 2013 decreased $0.5 million, or 28.2%, to $1.4 million from $1.9 million for the three months ended March 31, 2012, with the decrease primarily attributable to the tax effect of our non-controlling interest in ProtectCELL and a lower level of pretax income. Our effective tax rate was 29.0% for the three months ended March 31, 2013 compared to 35.5% for the same period in 2012.

As of December 31, 2012, we were under examination by the Internal Revenue Service ("IRS") for the 2009 and 2010 tax years. In February 2013, the IRS completed its field audit and in March 2013, we received notice from the IRS that the audit report has been fully approved. We have agreed to those findings and paid $57.0 thousand which was expensed during the three months ended March 31, 2013.

RESULTS OF OPERATIONS - SEGMENTS

We conduct our business through three business segments: (i) Payment Protection; (ii) BPO; and (iii) Brokerage. The revenue for each segment is presented to reflect the operating characteristics of the segment. We allocate certain revenues and costs to our segments. These items consist primarily of corporate-related income, transaction related costs, executive stock compensation and other overhead expenses. For additional information regarding segment net revenues and operating expenses, see the Note, "Segment Results" in the Notes to the Consolidated Financial Statements included in this Form 10-Q.

In this Form 10-Q, we present EBITDA, segment EBITDA margin and Adjusted EBITDA. These financial measures as presented in this Form 10-Q are considered Non-GAAP financial measures and are not recognized terms under U.S. GAAP and should not be used as an indicator of, and are not an alternative to, net income as a measure of operating performance. EBITDA as used in this Form 10-Q is net income before interest expense, income taxes, net income attributable to non-controlling interests, depreciation and amortization. Adjusted EBITDA, as used in this Form 10-Q means "Consolidated Adjusted EBITDA" which is defined under our credit facility with Wells Fargo Bank, N.A., which in general terms means consolidated net income before non-controlling interests, consolidated interest expense, consolidated amortization expense, consolidated depreciation expense and consolidated income tax expense. The other items excluded in this calculation may include if applicable, but are not limited to, specified acquisition costs, impairment of goodwill and other non-cash charges, stock-based compensation expense and unusual or non-recurring charges. The calculation below does not give effect to certain additional adjustments permitted under our credit facility, which if included, would increase the amount of Adjusted EBITDA reflected in this table. We believe presenting EBITDA and Adjusted EBITDA provides investors with a supplemental financial measure of our operating performance.

33

In addition to the financial covenant requirements under our credit facility, management uses EBITDA and Adjusted EBITDA as financial measures of operating performance for planning purposes, which may include, but are not limited to, the preparation of budgets and projections, the determination of bonus compensation for executive officers, the analysis of the allocation of resources and the evaluation of the effectiveness of business strategies. Although we use EBITDA and Adjusted EBITDA as financial measures to assess the operating performance of our business, both measures have significant limitations as analytical tools because they exclude certain material expenses. For example, they do not include interest expense and the payment of income taxes, which are both a necessary element of our costs and operations. Since we use property and equipment to generate service revenues, depreciation expense is a necessary element of our costs. In addition, the omission of amortization expense associated with our intangible assets further limits the usefulness of this financial measure. Management believes the inclusion of the adjustments to EBITDA and Adjusted EBITDA are appropriate to provide additional information to investors about certain material non-cash items and about unusual items that we do not expect to continue at the same level in the future. Because EBITDA and Adjusted EBITDA do not account for these expenses, its utility as a financial measure of our operating performance has material limitations. Due to these limitations, management does not view EBITDA and Adjusted EBITDA in isolation or as a primary financial performance measure.

We believe EBITDA and Adjusted EBITDA are frequently used by securities analysts, investors and other interested parties in the evaluation of similar companies in similar industries and to measure the company's ability to service its debt and other cash needs. Because the definitions of EBITDA and Adjusted EBITDA (or similar financial measures) may vary among companies and industries, they may not be comparable to other similarly titled financial measures used by other companies.

The following tables present segment revenue and expense information, segment EBITDA and EBITDA margin information and a reconciliation to net income:

(in thousands, except percentages)	For the Three Months Ended
	March 31, 2013			March 31, 2012			$ Change from 2012			% Change from 2012
Payment Protection:
Service and administrative fees	$	34,200		$	17,803		$	16,397		92.1	%
Ceding commission	7,163			7,064			99			1.4
Net investment income	909			743			166			22.3
Net realized investment gains (losses)	7			(3		)	10			(333.3	)
Other income	91			72			19			26.4
Net earned premium	33,142			31,972			1,170			3.7
Net losses and loss adjustment expenses	(10,535		)	(11,266		)	731			(6.5	)
Member benefit claims	(8,978		)	(1,303		)	(7,675		)	(15.8	)
Commissions	(35,362		)	(31,988		)	(3,374		)	10.5
Payment Protection revenue, net	20,637			13,094			7,543			57.6
Operating expenses - Payment Protection	14,892			7,913			6,979			88.2
EBITDA	5,745			5,181			564			10.9
EBITDA margin	27.8		%	39.6		%
Depreciation and amortization	1,775			849			926			109.1
Interest expense	957			1,012			(55		)	(5.4	)
Income before income taxes and non-controlling interests	3,013			3,320			(307		)	(9.2	)
BPO:
BPO revenue	4,214			4,205			9			0.2
Operating expenses	3,556			3,133			423			13.5
EBITDA	658			1,072			(414		)	(38.6	)
EBITDA margin	15.6		%	25.5		%
Depreciation and amortization	834			503			331			65.8
Interest expense	177			267			(90		)	(33.7	)
(Loss) income before income taxes and non-controlling interests	(353		)	302			(655		)	(216.9	)
Brokerage:
Brokerage revenue	10,175			10,023			152			1.5
Operating expenses	7,203			7,085			118			1.7
EBITDA	2,972			2,938			34			1.2

34

(in thousands, except percentages)	For the Three Months Ended
	March 31, 2013			March 31, 2012			$ Change from 2012			% Change from 2012
EBITDA margin	29.2		%	29.3		%
Depreciation and amortization	657			868			(211		)	(24.3	)
Interest expense	310			373			(63		)	(16.9	)
Income before income taxes and non-controlling interests	2,005			1,697			308			18.1
Segment net revenue	35,026			27,322			7,704			28.2
Net losses and loss adjustment expenses	10,535			11,266			(731		)	(6.5	)
Member benefit claims	8,978			1,303			7,675			589.0
Commissions	35,362			31,988			3,374			10.5
Total revenue	89,901			71,879			18,022			25.1
Segment operating expenses	25,651			18,131			7,520			41.5
Net losses and loss adjustment expenses	10,535			11,266			(731		)	(6.5	)
Member benefit claims	8,978			1,303			7,675			589.0
Commissions	35,362			31,988			3,374			10.5
Total expenses before depreciation, amortization and interest expense	80,526			62,688			17,838			28.5
Total EBITDA	9,375			9,191			184			2.0
Depreciation and amortization	3,266			2,220			1,046			47.1
Interest expense	1,444			1,652			(208		)	(12.6	)
Total income before income taxes and non-controlling interests	4,665			5,319			(654		)	(12.3	)
Income taxes	1,354			1,887			(533		)	(28.2	)
Less: net income attributable to non-controlling interests	818			18			800			4,444.4
Net income	$	2,493		$	3,414		$	(921	)	(27.0	)%

The table below presents a reconciliation of net income to EBITDA and Adjusted EBITDA for the following periods:

	For the Three Months Ended
(in thousands)	March 31, 2013		March 31, 2012
Net income	$	2,493	$	3,414
Depreciation and amortization	1,318		738
Amortization of intangibles	1,948		1,482
Interest expense	1,444		1,652
Income taxes	1,354		1,887
Net income attributable to non-controlling interests	818		18
EBITDA	9,375		9,191
Transaction costs (a)	86		97
Restructuring expenses	1,154		—
Stock-based compensation expense	304		179
Adjusted EBITDA	$	10,919	$	9,467
(a) Represents transaction costs associated with acquisitions.

Payment Protection Segment

Net revenues for the three months ended March 31, 2013 increased $7.5 million, or 57.6%, to $20.6 million from $13.1 million for the three months ended March 31, 2012. The increase resulted primarily from a $6.2 million increase in net revenue attributable to the 2012 acquisition of ProtectCELL and $0.7 million for 4Warranty. In addition, our credit and warranty products increased net revenue by $0.9 million primarily due to improved underwriting results from growth in earned premiums and favorable loss experience. These increases were partially offset by reduced Motor Club net revenues of $0.3 million. Net investment income on our portfolio increased by $0.2 million due to greater invested assets.

Operating expenses for the three months ended March 31, 2013 increased $7.0 million, or 88.2%, to $14.9 million from $7.9 million for the three months ended March 31, 2012. The increase resulted primarily from a $4.0 million increase in expenses attributable to the 2012 acquisition of ProtectCELL and $0.4 million for 4Warranty. In addition, variable expenses increased $1.2 million to expand

35

our payment protection and motor club businesses and develop direct-to-consumer opportunities, while costs allocated to the segment increased $1.3 million which included $1.0 million in restructuring costs related to the Plan.

EBITDA for the three months ended March 31, 2013 increased $0.6 million, or 10.9%, to $5.7 million from $5.2 million for the same period in 2012. EBITDA margin was 27.8% and 39.6% for the three months ended March 31, 2013 and 2012, respectively.

BPO Segment

Revenues for the three months ended March 31, 2013 and 2012 each totaled $4.2 million. The 2013 revenues reflect an increase of $0.1 million from PBG and an increase of $0.1 million in service and administrative fees on debt cancellation programs for credit card companies. These increases were offset by lower service and administrative fees for our insurance company clients, which decreased $0.2 million.

Operating expenses for the three months ended March 31, 2013 increased $0.4 million, or 13.5%, to $3.6 million from $3.1 million for the three months ended March 31, 2012. The increase resulted primarily from additional expenses of $0.3 million from PBG to support growth initiatives and $0.1 million in allocated restructuring costs related to the Plan.

EBITDA for the three months ended March 31, 2013 was $0.7 million compared to $1.1 million for the same period in 2012. EBITDA margin was 15.6% and 25.5% for the three months ended March 31, 2013 and 2012, respectively.

Brokerage Segment

Revenues totaled $10.2 million for the three months ended March 31, 2013 compared to $10.0 million for the three months ended March 31, 2012. The increase was due to growth in Bliss & Glennon brokerage commission and fees from $7.4 million to $7.6 million, while eReinsure, premium financing, and collateral recovery revenues were flat to prior year.

Operating expenses for the three months ended March 31, 2013 were $7.2 million, compared to $7.1 million for the same period in 2012. For both periods in 2013 and 2012, the majority of our expenses were personnel costs, which totaled $5.6 million and $5.0 million, respectively.

EBITDA, for the three months ended March 31, 2013 was $3.0 million compared to $2.9 million for the same period in 2012. EBITDA margin was 29.2% and 29.3% for the three months ended March 31, 2013 and 2012, respectively.

Corporate Segment

No income or expenses were allocated to the Corporate segment for the three months ended March 31, 2013 or 2012, respectively.

Goodwill by Business Segment

The following table shows goodwill assigned to each business segment: (in thousands)	At
	March 31, 2013
Payment Protection:
Summit Partners Transactions	$	22,763
Darby & Associates	642
Continental	5,427
United	4,581
Auto Knight	4,215
ProtectCELL	11,732
4Warranty	2,724
Total Payment Protection	52,084
BPO:
Summit Partners Transactions	8,902
PBG	4,068
Total BPO	12,970
Brokerage:
B&G	30,468
South Bay	478
eReinsure	23,512
Total Brokerage	54,458
Total Goodwill	$	119,512

36

LIQUIDITY AND CAPITAL RESOURCES

Liquidity

Liquidity describes the ability of a company to generate sufficient cash flows to meet the cash requirements of its business operations, including working capital needs, capital expenditures, debt service, acquisitions and other commitments and contractual obligations. We historically have derived our liquidity from our invested assets, cash flow from operations, ordinary and extraordinary dividend capacity from our subsidiary insurance companies, our credit facility and investments. When considering our liquidity, it is important to note that we hold cash in a fiduciary capacity as a result of premiums received from insured parties that have not yet been paid to insurance carriers. The fiduciary cash is recorded as an asset on our Consolidated Balance Sheets with a corresponding liability, net of our commissions, to insurance carriers.

Our primary cash requirements include the payment of our operating expenses, interest and principal payments on our debt, capital expenditures and acquisitions. We may also incur unexpected costs and operating expenses related to any unforeseen disruptions to our facilities and equipment, the loss of key personnel or changes in the credit markets and interest rates, which could increase our immediate cash requirements or otherwise impact our liquidity.

Our primary sources of liquidity are our total investments, cash and cash equivalent balances, availability under our revolving credit facility and dividends and other distributions from our subsidiaries. At March 31, 2013, we had total available-for-sale and short-term investments of $126.6 million, which includes restricted investments of $19.5 million, cash and cash equivalents of $14.3 million and $33.3 million of available capacity on our credit facility. At December 31, 2012, we had total available-for-sale and short-term investments of $118.1 million, which includes restricted investments of $17.9 million, cash and cash equivalents of $15.2 million and $35.6 million of available capacity on our credit facility. Our total indebtedness was $126.8 million at March 31, 2013 compared to $124.4 million at December 31, 2012.

We believe that our cash flow from operations and our availability under our revolving credit facility, combined with our low capital expenditure requirements will provide us with sufficient capital to continue to grow our business over the next several years. We intend to use a portion of our available cash flow to pay interest on our outstanding debt, thus limiting the amount available for working capital, capital expenditures and other general corporate purposes. As we continue to expand our business and make acquisitions, we may in the future require additional working capital to meet our future business needs. This additional working capital may be in the form of additional debt or equity. Although we believe we have sufficient liquidity under our revolving credit facility, as discussed above, under adverse market conditions or in the event of a default under our revolving credit facility, there can be no assurance that such funds would be available or sufficient, and, in such a case, we may not be able to successfully obtain additional financing on favorable terms, or at all, or replace our existing credit facility upon maturity in August 2017.

Share Repurchase Plan

During the fourth quarter of 2011, our Board of Directors approved a share repurchase plan. The share repurchase plan allows us to purchase up to $10.0 million of our common stock to be purchased from time to time through open market or private transactions. The plan provides for shares to be repurchased for general corporate purposes, which may include serving as a resource for funding potential acquisitions and employee benefit plans. The timing, price and quantity of purchases are at our discretion, and the plan may be discontinued or suspended at any time. For the three months ended March 31, 2013, the company did not repurchase any of its outstanding common shares compared to repurchases of 195,760 common shares at an average price of $7.12 per share at a total cost of $1.4 million for the three months ended March 31, 2012. At March 31, 2013, the total amount still available under the share repurchase plan totaled $3.5 million. All repurchased common shares are held in treasury and none of the repurchased common shares have been retired. See Part II, Item 2, for more information on the share repurchase plan.

Regulatory Requirements

We are a holding company and have limited direct operations. Our holding company assets consist primarily of the capital stock of our subsidiaries. Accordingly, our future cash flows depend upon the availability of dividends and other payments from our subsidiaries, including statutorily permissible payments from our insurance company subsidiaries, as well as payments under our tax allocation agreement and management agreements with our subsidiaries. The ability of our insurance company subsidiaries to pay such dividends and to make such other payments are limited by applicable laws and regulations of the states in which our subsidiaries are domiciled, which vary from state to state and by type of insurance provided by the applicable subsidiary. These laws and regulations require, among other things, our insurance subsidiaries to maintain minimum solvency requirements and limit the amount of dividends these subsidiaries can pay to the holding company. Along with solvency regulations, the primary factor in determining the amount of capital available for potential dividends is the level of capital needed to maintain desired financial strength ratings from A.M. Best for our insurance company subsidiaries. Given recent economic events that have affected the insurance industry, both regulators and rating agencies could become more conservative in their methodology and criteria, including increasing capital requirements for our insurance subsidiaries which, in turn, could negatively affect our capital resources.

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The following table sets forth the dividends paid to us by our insurance company subsidiaries during the following periods:

	For the Three Months Ended		For the Twelve Months Ended
(in thousands)	March 31, 2013		December 31, 2012
Ordinary dividends	$	231	$	2,783
Extraordinary dividends	—		—
Total dividends	$	231	$	2,783

$125.0 Million Credit Facility

On August 2, 2012, we entered into a five-year $125.0 million secured credit agreement (the "Credit Agreement") with a syndicate of lenders, including Wells Fargo Bank, N.A., who also serves as administrative agent ("Wells Fargo" or the "Administrative Agent"). The Credit Agreement provides for a $50.0 million term loan facility (the "Term Loan Facility"), as well as a $75.0 million revolving credit facility (the "Revolving Facility" and collectively with the Term Loan Facility, the "Facilities") with a sub-limit of $10.0 million for swingline loans and $10.0 million for letters of credit. Subject to earlier termination, the Credit Agreement terminates on August 2, 2017. The Credit Agreement includes a provision pursuant to which, from time to time, we may request that the lenders in their discretion increase the maximum amount of commitments under the Facilities by an amount not to exceed $50.0 million. 

At our election, borrowings under the Revolving Facility will bear interest either at the base rate plus an applicable interest margin or the adjusted LIBO rate plus an applicable interest margin; provided, however, that all swingline loans will be base rate loans. The base rate is a fluctuating interest rate equal to the highest of: (i) Wells Fargo's publicly announced prime lending rate; (ii) the federal funds rate plus0.50%; and (iii) the adjusted LIBO rate, determined on a daily basis for an interest period of one month, plus1.0%. The adjusted LIBO rate is the rate per annum obtained by dividing (i) the London interbank offered rate ("LIBOR") for such interest period by (ii) a percentage equal to 1.00 minusthe Eurodollar Reserve Percentage (as defined in the Credit Agreement). The interest margin over the adjusted LIBO rate, initially set at 2.75%, may increase (to a maximum amount of 3.0%) or decrease (to a minimum amount of 2.0%) based on changes in our leverage ratio. The interest margin over the base rate, initially set at 1.75%, may increase (to a maximum amount of 2.0%) or decrease (to a minimum amount of 1.0%) based on changes in our leverage ratio.

In addition to interest payable on the principal amount of indebtedness outstanding from time to time under the Credit Agreement, we are required to pay a commitment fee, initially equal to 0.40% per annum of the unused amount of the Revolving Facility. The percentage rate of such fee may increase (to a maximum amount of .45%) or decrease (to a minimum amount of .25%) based on changes in the Borrowers' leverage ratio. The amount of outstanding swingline loans is not considered usage of the Revolving Facility for the purpose of calculating the commitment fee. We are also required to pay letter of credit participation fees on the undrawn amount of all outstanding letters of credit. We paid fees of approximately $1.7 million to Wells Fargo in connection with the execution of the Credit Agreement, which have been capitalized and are being amortized using a straight line method over the life of the Credit Agreement.

We may, at our option, prepay any borrowing, in whole or in part, at any time and from time to time without premium or penalty. However, after the end of our fiscal year (commencing with the fiscal year ending December 31, 2015), we are required to make mandatory principal prepayments of loans under the Facilities in an amount determined under the Credit Agreement based upon a percentage (from a maximum of 50% to a minimum of 0% based on the Borrowers' leverage ratio) of our Excess Cash Flow (as defined in the Credit Agreement) minus certain off set amounts relating to permitted acquisitions of ours.

The Credit Agreement contains certain customary representations, warranties and covenants applicable to us for the benefit of the Administrative Agent and the lenders. We may not assign, sell, transfer or dispose of any collateral or effect certain changes to our capital structure and the capital structure of our subsidiaries without the Administrative Agent's prior consent. Our obligations under the Facilities may be accelerated or the commitments terminated upon the occurrence of an event of default under the Credit Agreement, including payment defaults, defaults in the performance of affirmative and negative covenants, the inaccuracy of representations or warranties, bankruptcy and insolvency related defaults, cross defaults to other material indebtedness, defaults arising in connection with changes in control and other customary events of default. The Credit Agreement also contains the following financial covenants, which require us to maintain, as of the end of each fiscal quarter:

• a maximum Total Leverage Ratio (as defined in the Credit Agreement) of 3.50:1.00, with step-downs to 3.25:1.00 on December 31, 2013 and 3.00:1.00 on December 31, 2014;

• a minimum Fixed Charge Coverage Ratio (as defined in the Credit Agreement) of 2.00:1.00;

• a minimum Reinsurance Ratio (as defined in the Credit Agreement) of 50.0%; and

• a minimum NAIC RBC Ratio (as defined in the NAIC) standards, calculated as of the end of each fiscal year, to the "authorized control level," as defined by the NAIC in its standards) of 250.0%, applicable to each regulated insurance subsidiary of the Borrowers.

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As of March 31, 2013, we were in compliance with the financial covenants contained in the Credit Agreement. For more information, see the Note, "Note Payable" in the Notes to Consolidated Financial Statements.

Preferred Trust Securities

In connection with the Summit Partners Transactions, our subsidiary, LOTS Intermediate Co. issued $35.0 million of fixed/floating rate preferred trust securities due in 2037. The preferred trust securities accrued interest at a rate of 9.61% per annum until the June 2012 interest payment date, thereafter, interest accrues at a rate of 3-month LIBOR plus 4.10% for each interest rate period. We were not permitted to redeem the preferred trust securities until after the June 2012 interest payment date, thereafter we may redeem the preferred trust securities, in whole or in part, at a price equal to 100% of the principal amount of such preferred trust securities outstanding plus accrued and unpaid interest. Interest is payable quarterly.

In April 2011, we entered into a forward interest rate swap (the "Swap") with Wells Fargo Bank, N.A., pursuant to which we swapped the floating rate portion of our $35.0 million in outstanding preferred trust securities to a fixed rate of 3.47% per annum payable quarterly resulting in a total rate of 7.57% after adding the applicable margin of 4.10%. The Swap has a five year term, which commenced in June 2012 when the interest rate on the underlying preferred trust securities began to float, and will expire in June 2017.

Invested Assets

Our invested assets consist mainly of high quality investments in fixed maturity securities, short-term investments, and a smaller allocation of common and preferred equity securities. We believe that prudent levels of investments in equity securities within our investment portfolio are likely to enhance long-term after-tax total returns without significantly increasing the risk profile of our portfolio. We regularly review our entire portfolio in the context of macroeconomic and capital market conditions. The overall average credit quality of our investment portfolio was rated A+ by Standard and Poor's Rating Service at March 31, 2013 and December 31, 2012, respectively.

Regulatory Requirements

Our investments must comply with applicable laws and regulations which prescribe the kind, quality and concentration of investments we are permitted to make. In general, these laws and regulations permit investments, within specified limits and subject to certain qualifications, in federal, state and municipal obligations, corporate bonds, preferred and common equity securities, mortgage loans, real estate and other investments.

Investment Strategy

Our investment policy and strategy is reviewed and approved by the board of directors of each of our insurance subsidiaries on a regular basis in order to review and consider investment activities, tactics and new investment opportunities. Our investment strategy seeks long-term returns through disciplined security selection, portfolio diversity and an integrated approach to risk management. We select and monitor investments to balance the goals of safety, stability, liquidity, growth and after-tax total return with the need to comply with regulatory investment requirements. Our investment portfolio is managed by a third-party provider of asset management services, which specializes in the insurance sector. Asset liability management is accomplished by setting an asset target duration range that is influenced by the following factors: (i) the estimated reserve payout pattern, (ii) the inclusion of our tactical capital market views into the investment decision making process and (iii) our overall risk tolerance. We aim to achieve a relatively safe and stable income stream by maintaining a broad-based portfolio of investment grade fixed maturity securities. These holdings are supplemented by investments in additional asset types with the objective of further enhancing the portfolio's diversification and expected returns. These additional asset types include common and redeemable preferred stock. We manage our investment risks through consideration of duration of liabilities, diversification, credit limits, careful analytic review of each investment decision, and comprehensive risk assessments of the overall portfolio.

As of March 31, 2013, we held 39 individual fixed maturity and 3 individual equity securities in unrealized loss positions. We do not intend to sell the investments that are in an unrealized loss position at March 31, 2013 and it is more likely than not that we will be able to hold these securities until full recovery of their amortized cost basis for fixed maturity securities or cost for equity securities, although we can give no assurances. At March 31, 2013, based on management's quarterly review, none of our securities were deemed to other than temporarily impaired.

As of March 31, 2012, there were 33 individual fixed maturity and 5 individual equity securities in unrealized loss positions. At March 31, 2012, based on management's quarterly review, none of our securities were deemed to other than temporarily impaired. Please see the Note, "Investments" in the Notes to Consolidated Financial Statements for additional information.

Cash Flows

We monitor cash flows at the consolidated, holding company and subsidiary levels. Cash flow forecasts at the consolidated and subsidiary levels are provided on a monthly basis using trend and variance analysis to project future cash needs, with adjustments made as needed. The table below shows our cash flows for the periods presented:

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(in thousands)	For the Three Months Ended
Cash (used in) provided by :	March 31, 2013			March 31, 2012
Operating activities	$	(1,295	)	$	(4,802	)
Investing activities	(1,844		)	(8,167		)
Financing activities	2,269			306
Net change in cash and cash equivalents	$	(870	)	$	(12,663	)

Operating Activities

Net cash used in operating activities was $1.3 million for the three months ended March 31, 2013 and was primarily attributable to increases in other receivables, accounts and premiums receivable, net and a decrease in unearned premiums which was which was partially offset by increases in accrued expenses, accounts payable and other liabilities and deferred revenue and a decrease in reinsurance receivable.

Net cash used in operating activities was $4.8 million for the three months ended March 31, 2012, and was primarily attributable to an increase in other receivables, that was in part, offset by an increase in accounts payable and the timing of certain transaction processing activity.

Investing Activities

Net cash used in investing activities was $1.8 million for the three months ended March 31, 2013 and was primarily for the purchase of fixed maturity and equity securities, the acquisition of RICC, which was partially offset by the proceeds we received from the repayment of a related party note receivable and normal quarterly proceeds from maturities, calls and prepayments of available-for-sale investments.

Net cash used in investing activities for the three months ended March 31, 2012,was $8.2 million and was primarily for the purchase of fixed maturity and equity securities and property and equipment along with an increase in restricted cash, partially offset by the sale and maturity of fixed maturity investments and short term investments.

Financing Activities

Net cash provided by financing activities was $2.3 million for the three months ended March 31, 2013 and primarily reflected the borrowings under our credit facility of $10.5 million, which was partially offset by the use of $8.2 million used to pay down our credit facility.

Net cash provided by financing activities was $0.3 million for the three months ended March 31, 2012 and primarily reflected borrowings under our lines of credit of $24.7 million, which was partially offset by $23.0 million used to pay down our credit facility and $1.4 million used to repurchase 195,760 shares of our common stock under our share repurchase plan.

Contractual Obligations and Other Commitments

We have obligations and commitments to third parties as a result of our operations. These obligations and commitments, as of March 31, 2013, are detailed in the table below by maturity date as of the periods indicated:

(in thousands)	Payments Due by Period
			Less than						More than
	Total		1 Year		1-3 Years		4-5 Years		5 Years
Note payable (1)	$	91,750	$	3,750	$	10,000	$	78,000	$	—
Preferred trust securities	35,000		—		—		—		35,000
Interest payable on total debt(2)	65,262		4,239		11,102		9,716		40,205
Policyholder account balances	25,489		1,470		2,833		2,671		18,515
Unpaid claims (3)	34,155		27,300		6,638		204		13
Total	$	251,656	$	36,759	$	30,573	$	90,591	$	93,733

⁽¹⁾ - For more information on our credit facility with Wells Fargo Bank, N.A., please see the section above titled "$125.0 Million Credit Facility" in this MD&A and the Note, "Note Payable" in the Notes to the Consolidated Financial Statements.

⁽²⁾ - Due to the variable interest rate and amortizing payments required on the note payable to Well Fargo and the impact of the interest rate swap on the preferred trust securities interest payable, we made certain assumptions regarding future interest rates. The assumptions we made are as follows:

a. For interest payable on the note payable, we assumed scheduled principal payments $1,250 per quarter and used the 1-month forward LIBOR curve rate when estimating interest payable on the outstanding principal balance.

b. For interest payable on the preferred trust securities, we used the interest swap in effect of 7.57% until June 2017, subsequent to that date we utilized the contractual spread amount of 410 basis points plus the 3-month forward LIBOR curve rate.

⁽³⁾ - Estimated. Net unpaid claims are: total $14,684; less than 1 year $11,737; 1-3 years $2,854; 3-5 years $88; and more than 5 years $5.

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As previously disclosed in our Annual Report on Form 10-K, we have certain obligations under capital and operating lease agreements to which we are a party. In accordance with U.S. GAAP, the operating lease obligations and the related leased assets are not reported on our Consolidated Balance Sheets. Other than reductions to the capital and operating lease obligations resulting from scheduled lease payments, our obligations under these lease agreements have not changed materially since December 31, 2012.

As part of the 2012 acquisition of ProtectCELL, we have a conditional commitment to provide up to $10.2 million of additional capital ("Additional Fortegra Capital Contributions") to ProtectCELL if the board of directors of ProtectCELL (the "PC Board") determines that ProtectCELL requires additional funds to support expansion and growth, or other appropriate business needs.

We are obligated to evaluate any such funding request received from the PC Board in good faith to determine whether in our reasonable business judgment the requested capital should be contributed. We are not required to honor the funding request from the PC Board if we in good faith deem the request to be imprudent or unjustified.

The benefits of such additional funding would inure to us and to the non-controlling ownership interest of ProtectCELL, in proportion to their respective ownership interests. However, in return for each $1,000 of Additional Fortegra Capital Contributions, we would receive one Series A Preferred Unit. Any unreturned Series A Preferred contribution is deducted from ProtectCELL's valuation in determining the option price.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that are reasonably likely to have a material effect on our financial condition, results of operations, liquidity or capital resources.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Effective risk management is fundamental to our ability to protect both our customers' and stockholders' interests. We are exposed to potential losses from various market risks, in particular interest rate risk and credit risk. Additionally, we are exposed to concentration risk and inflation risk.

Interest Rate Risk

Interest rate risk is the possibility that the fair value of liabilities will change more or less than the market value of investments in response to changes in interest rates, including changes in the slope or shape of the yield curve and changes in spreads due to credit risks and other factors.

Interest rate risk arises as we invest substantial funds in interest-sensitive fixed maturity securities primarily in the United States. There are two forms of interest rate risk: price risk and reinvestment risk. Price risk occurs when fluctuations in interest rates have a direct impact on the market valuation of these investments. As interest rates rise, the market value of these investments fall, and conversely, as interest rates fall, the market value of these investments rise. Reinvestment risk occurs when fluctuations in interest rates have a direct impact on expected cash flows from mortgage-backed and asset-backed securities. As interest rates fall, an increase in prepayments on these assets results in earlier than expected receipt of cash flows forcing us to reinvest the proceeds in an unfavorable lower interest rate environment. Conversely, as interest rates rise, a decrease in prepayments on these assets results in later than expected receipt of cash flows forcing us to forgo reinvesting in a favorable higher interest rate environment.

We manage interest rate risk by selecting investments with characteristics such as duration, yield, currency and liquidity tailored to the anticipated cash outflow characteristics of our insurance and reinsurance liabilities. Increases or decreases in interest rates could also impact interest payable under our variable rate indebtedness. As of March 31, 2013, we had $91.8 million outstanding under our credit facility with Wells Fargo Bank, N.A. at an interest rate of 2.71%. Effective April 3, 2013, the interest rate on the credit facility with Wells Fargo Bank, N.A. increased to 3.21%.

We have the ability to manage interest rate risk by entering into interest rate swap transactions to mitigate the impact of interest rate changes on our debt obligations. In April 2011, we entered into a forward starting interest rate swap transaction to convert the floating rate portion of our preferred trust securities to a fixed rate. The interest rate swap, commenced in June 2012 and expires in June 2017. This transaction swapped the floating rate portion of our $35.0 million in outstanding preferred trust securities to a fixed rate of 3.47% per annum payable quarterly resulting in a total rate of 7.57% after adding the applicable margin of 4.10%.

Credit Risk

Credit risk is the possibility that counterparties may not be able to meet payment obligations when they become due. We assume counterparty credit risk in many forms. A counterparty is any person or entity from which cash or other forms of consideration are expected to extinguish a liability or obligation to us. Primarily, our credit risk exposure is concentrated in our fixed maturity investment portfolio and, to a lesser extent, in our reinsurance receivables.

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We have exposure to credit risk primarily from customers, as a holder of fixed maturity securities and by entering into reinsurance cessions. Our risk management strategy and investment strategy is to invest in debt instruments of high credit quality issuers and to limit the amount of credit exposure with respect to any one issuer. We attempt to limit our credit exposure by imposing fixed maturity portfolio limits on individual issuers based upon credit quality.

We are also exposed to the credit risk of our reinsurers. When we reinsure, we are still liable to our insureds regardless of whether we get reimbursed by our reinsurer. As part of our overall risk and capacity management strategy, we purchase reinsurance for certain risks underwritten by our Payment Protection business segments.

At March 31, 2013, approximately 80% of our $196.9 million in reinsurance receivables, compared to 73%, or $204.0 million, at December 31, 2012, were protected from credit risk by various types of risk mitigation mechanisms such as collateral trusts, letters of credit or by withholding the assets in a modified coinsurance or co-funds-withheld arrangement. For recoverables that are not protected by these mechanisms, we are dependent solely on the ability of the reinsurer to satisfy claims. Occasionally, the creditworthiness of the reinsurer becomes questionable. The majority of our reinsurance exposure has been ceded to companies rated A- or better by A.M. Best or is supported by letters of credit.

Concentration Risk

Concentration risk is the risk that results from a lack of diversification due to a concentrated exposure on a small number of clients, limited market penetration, or reduced geographic coverage.

A significant portion, approximately 60% at March 31, 2013 compared to 63% at December 31, 2012, of our BPO revenues are attributable to one client, National Union Fire Insurance Company of Pittsburgh, PA. Any loss of business from or change in our relationship with this client could have a material adverse effect on our business. To mitigate this risk, we intend to expand our BPO client base.

We have two additional forms of concentration risk: (i) geographic (almost two-thirds of our Brokerage segment is in California) and (ii) channel distribution risk (almost half of our Payment Protection revenue is in the consumer finance distribution channel). Our risk mitigation strategies are to continue to expand geographically (in our Brokerage segment) and to continue to increase the volume of business through other distribution channels (in our Payment Protection segment).

Cash exceeding Federal Deposit Insurance Corporation ("FDIC")Limits

We maintain cash and cash equivalents with major third party financial institutions, including interest-bearing money market accounts. In the United States, these accounts were fully insured by the FDIC regardless of account balance through the Transaction Account Guarantee ("TAG") program created by Section 343. The expiration of the TAG program on December 31, 2012, caused the FDIC's standard insurance limit of $250,000 per depositor per institution to be reimposed on January 1, 2013. Thus, our accounts containing cash and cash equivalents after January 1, 2013 may exceed the FDIC's standard $250,000 insurance limit from time to time.

The cash balances in money markets accounts exceeding the FDIC insurance limit totaled $9.3 million and $8.2 million at March 31, 2013 and December 31, 2012, respectively. In addition, restricted cash exceeding the FDIC insurance limit totaled $17.0 million and $0 at March 31, 2013 and December 31, 2012, respectively. To date, we have not experienced any loss of, or lack of access to, our cash and cash equivalents or our restricted cash. Although we periodically monitor and adjust the balances of these accounts as needed, the balances of these accounts nonetheless remain subject to unexpected, adverse conditions in the financial markets and could be adversely impacted if a financial institution with which we maintain an account fails. We will continue to monitor the depository institutions at which our accounts are maintained, but cannot guarantee that access to our cash and cash equivalents will not be impacted by, or that we will not lose deposited funds exceeding the FDIC insurance limit due to, adverse conditions in the financial markets or if a financial institution with which we maintain an account fails.

Inflation Risk

Inflation risk is the possibility that a change in domestic price levels produces an adverse effect on earnings. This typically happens when either invested assets or liabilities, but not both are indexed to inflation. Inflation did not have a material impact on our financial condition, results of operations or cash flows in the periods presented in our Consolidated Financial Statements.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act as of March 31, 2013. Based on this evaluation, our management, including our Chief

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Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures were effective as of March 31, 2013.

Remediation of Material Weaknesses in Disclosure Controls and Procedures and in Internal Control Over Financial Reporting

As previously reported in our Current Report on Form 8-K filed with the SEC on March 28, 2013 and in our 2012 Form 10-K filed with the SEC on April 1, 2013, in connection with our review of our disclosure controls and procedures and our internal control over financial reporting as of December 31, 2012, our management, including our Chief Executive Officer and Chief Financial Officer, concluded that there were control deficiencies that represented material weaknesses in our disclosure controls and procedures and our internal control over financial reporting.

The following material weaknesses existed in our disclosure controls and procedures and our internal control over financial reporting. We identified errors in the reporting of revenue, member benefit claims and commissions of our Motor Clubs division. We also identified a deficiency related to the reporting of retrospective commissions in our Payment Protection segment and the documentation supporting estimation processes and related accrual balances.

In February and March of 2013, our management took steps to remediate the material weaknesses identified. Our management established new workflows, documentary evidence and review procedures to better support the retrospective commission accrual estimates and facilitate effective validation of the amounts recorded. Management also reinforced with the corporate and business unit accounting groups the requirement to continuously evaluate accounting determinations as circumstances change within the business, particularly when new entities or new types of transactions must be accounted for.

Further, our management has reassigned accounting personnel to strengthen financial control of the affected areas and created additional positions.

Changes in Internal Control Over Financial Reporting

Except for the steps taken to remediate the material weaknesses noted above, our management, including our Chief Executive Officer and Chief Financial Officer, identified no change in our internal control over financial reporting during the quarter ended March 31, 2013 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations of Disclosure Controls and Procedures and Internal Control Over Financial Reporting

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and internal controls will prevent or detect all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within Fortegra have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple errors or mistakes. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by our management override of the controls. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events. There can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, a control may become inadequate because of changes in conditions or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Chief Executive Officer and Chief Financial Officer Certifications

Exhibits 31.1 and 31.2 are the Certifications of our Chief Executive Officer and Chief Financial Officer, respectively, required in accordance with Section 302 of the Sarbanes-Oxley Act of 2002 (the "Section 302 Certifications"). The "Evaluation of Disclosure Controls and Procedures" in this Item 4 is the Evaluation referred to in the Section 302 Certifications, and accordingly, the above information should be read in conjunction with the Section 302 Certifications for a more complete understanding of the topics presented.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The information set forth in the Note, "Commitments and Contingencies" of the Notes to Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q is incorporated herein by reference.

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ITEM 1A. RISK FACTORS

The following are certain risks that management believes are specific to our business. This should not be viewed as an all-inclusive list of risks or as a presentation of the risk factors in any particular order. You should carefully consider the risks described below, together with the other information contained in this report and in our other filings with the SEC when evaluating our Company. Should any of the events discussed in the risk factors below occur, our business, results of operations or financial condition could be materially affected. Additional risks unknown at this time, or risks we currently deem immaterial, may also impact our financial condition, results of operations or cash flows.

Risks Related to our Business and Industries

General economic and financial market conditions may have a material adverse effect on the business, results of operations, cash flows and financial condition of all of our business segments.

General economic and financial market conditions, including the availability and cost of credit, the loss of consumer confidence, reduction in consumer or business spending, inflation, unemployment, energy costs and geopolitical issues, have contributed to increased uncertainty and volatility as well as diminished expectations for the U.S. economy and the financial markets. These conditions could materially and adversely affect each of our business segments. Adverse economic and financial market conditions could result in:

• a reduction in the demand for, and availability of, consumer credit, which could result in reduced demand by consumers for our Payment Protection products and our Payment Protection clients opting to no longer make such products available;

• higher than anticipated loss ratios on our Payment Protection products due to rising unemployment or disability claims;

• higher risk of increased fraudulent insurance claims;

• individuals terminating loans or canceling credit insurance policies, thereby reducing our revenues;

• a reduction in the demand for consumer warranty products, service contract offerings, mobile device protection and motor club memberships;

• individuals terminating warranty products, service contracts, mobile device protection contracts or motor club memberships, thereby reducing our revenues;

• businesses reducing the amount of coverage under surplus lines and specialty admitted insurance policies or allowing such policies to lapse thereby reducing our premium or commission income in our Brokerage business;

• a reduction in demand for new surplus lines and specialty insurance policies from retail insurance brokers and agents or retail insurance brokers and agents and insurance companies ceasing to offer our surplus lines and specialty insurance products and related services from our Brokerage business;

• a contraction in the reinsurance market caused by reduced demand by major insurers, reduced supply by reinsurers or other factors or reduced reinsurance demand by our insurance customers due to market conditions;

• our clients being more likely to experience financial distress or declare bankruptcy or liquidation, which could have an adverse impact on demand for our services and products and the remittance of premiums from such customers, as well as the collection of receivables from such clients for items such as unearned premiums, commissions or BPO-related accounts receivable, which could make the collection of receivables from our clients more difficult;

• increased pricing sensitivity or reduced demand for our services and products;

• increased costs associated with, or the inability to obtain, debt financing to fund acquisitions or the expansion of our businesses; and

• defaults in our fixed income investment portfolio or lower than anticipated rates of return as a result of low interest rate environments.

If we are unable to successfully anticipate changing economic or financial market conditions, we may be unable to effectively plan for or respond to such changes, and our business, results of operations and financial condition could be materially and adversely affected.

We face significant competitive pressures in each of our businesses, which could materially and adversely affect our business, results of operations and financial condition.

We face significant competition in each of our businesses. Competition in our businesses is based on many factors, including price, industry knowledge, quality of client service, the effectiveness of our sales force, technology platforms and processes, the security and integrity of our information systems, the financial strength ratings of our insurance subsidiaries, office locations, breadth of services and products and brand recognition and reputation. Some competitors may offer a broader array of services and products, may have a greater diversity of distribution resources, may have better brand recognition, may have lower cost structures or, with respect to insurers, may have higher financial strength or claims paying ratings. Some competitors also have larger client bases than we do. In addition, new competitors could enter our markets in the future, and existing competitors may gain strength by forging new business relationships. The competitive landscape for each of our businesses is described below.

• Payment Protection - In our Payment Protection segment, we compete with insurance companies, financial institutions, extended service plan providers, membership plan providers, wireless carriers and other insurance and warranty service providers. The principal competitors for our Payment Protection segment include The Warranty Group, Assurant, Inc., Asurion Corporation, eSecuritel Holdings, LLC, Asurion, LLC, Global Warranty Group, LLC and smaller regional companies. As a result of state and federal regulatory developments and changes in prior years, certain financial institutions are able to offer debt cancellation

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plans and are also able to affiliate with other insurance companies in order to offer services similar to those in our Payment Protection segment. This has resulted in new competitors, some of whom have significant financial resources, entering some of our markets. As competitors gain experience with payment protection and warranty programs, their reliance on our services and products may diminish.

• BPO - Our BPO segment competes with a variety of companies, including large multinational firms that provide consulting, technology and/or business process services, off-shore business process service providers in low-cost locations like India, and in-house captive insurance companies of potential clients. Our principal business process outsourcing competitors include Aon Corporation, Computer Sciences Corporation, Direct Response Insurance Administrative Services, Inc., Marsh & McLennan Companies, Inc., Dell Services and Unisys Corporation. The trend toward outsourcing and technological changes may also result in new and different competitors entering our markets. There could also be newer competitors with strong competitive positions as a result of consolidation of smaller competitors or of companies that each provide different services or serve different industries.

• Brokerage - Our Brokerage segment competes for retail insurance clients with numerous firms, including AmWINS Group, Inc., Arthur J. Gallagher & Co., Brown & Brown, Inc. and The Swett & Crawford Group, Inc. Many of our Brokerage competitors have relationships with insurance companies or have a significant presence in niche insurance markets that may give them an advantage over us, particularly in states other than California. This factor could impact our ability to compete effectively in any new states or regions that we enter. A number of standard market insurance companies are engaged in the sale of products that compete with products we offer. These carriers sell their products directly through retail agents and brokers without the involvement of a wholesale broker, which may yield higher commissions to retail agents and brokers and may impact our ability to compete. There are also a growing number of distribution channels (such as program administrators, managing general underwriters, and aggregators), that increase competition and decrease the residual insurance market opportunities. Although our eReinsure platform is uniquely positioned in the facultative reinsurance marketplace with no comparable companies currently providing similar services, systems such as Aon's FAConnect, the LexisNexis Insurance Exchange and the Lloyd's Exchange have technology platforms that could provide solutions which could directly compete with us in the future.

We expect competition to intensify in each of our business segments. Increased competition may result in lower prices and volumes, higher personnel and sales and marketing costs, increased technology expenditures and lower profitability. We may not be able to supply clients with services or products that they deem superior and at competitive prices and we may lose business to our competitors. If we are unable to compete effectively in any of our business segments, it would have a material adverse effect on our business, results of operations and financial condition.

Our results of operations may fluctuate significantly, which makes our future results of operations difficult to predict. If our results of operations fall below expectations, the price of our common stock could decline.

Our annual and quarterly results of operations have fluctuated in the past and may fluctuate significantly in the future due to a variety of factors, many of which are beyond our control. In addition, our expenses as a percentage of revenues may be significantly different than our historical rates. As a result, comparing our results of operations on a period-to-period basis may not be meaningful. Factors that may cause our results of operations to fluctuate from period-to-period include:

• demand for our services and products;

• the length of our sales cycle;

• the amount of sales to new clients:

• the timing of implementations of our services and products with new clients;

• pricing and availability of surplus lines and other specialty insurance products coverages;

• seasonality;

• the timing of acquisitions;

• competitive factors;

• prevailing interest rates;

• pricing changes by us or our competitors;

• transaction volumes in our clients' businesses;

• the introduction of new services and products by us and our competitors;

• changes in strategic partnerships;

• changes in regulatory and accounting standards; and

• our ability to control costs.

In addition, our Payment Protection segment's revenues can vary depending on the level of consumer activity and the success of our clients in selling products. In our Brokerage segment, our commission and fee income can vary due to the timing of policy renewals, as well as the timing and amount of the receipt of profit commission payments and fees and the net effect of new and lost business production. We do not control the factors that cause these variations. Specifically, third party customers' demand for insurance products can influence the timing of renewals, new business, lost business (which includes policies that are not renewed) and cancellations. In addition, we rely on retail insurance brokers and agents and insurance companies for the payment of certain commissions. Because these payments are processed internally by these companies, we may not receive a payment that is otherwise expected from a particular firm in one period until after the end of that period, which can adversely affect our ability to budget for such period.

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Our results of operations could be materially and adversely affected if we fail to retain our existing clients, cannot sell additional services and products to our existing clients, do not introduce new or enhanced services and products or are not able to attract and retain new clients.

Our revenue and revenue growth are dependent on our ability to retain clients, to sell those clients additional services and products, to introduce new services and products and to attract new clients in each of our businesses. Our ability to increase revenues will depend on a variety of factors, including:

• the quality and perceived value of our product and service offerings by existing and new clients;

• the effectiveness of our sales and marketing efforts;

• the speed with which our Brokerage segment can respond to requests for price quotes from retail insurance agents and brokers, and the availability of competitive services and products from our carriers;

• the successful installation and implementation of our services and products for new and existing Payment Protection and BPO clients;

• availability of capital to complete investments in new or complementary products, services and technologies;

• the availability of adequate reinsurance for us and our clients, including the ability of our clients to form, capitalize and operate captive reinsurance companies;

• our ability to find suitable acquisition candidates, successfully complete such acquisitions and effectively integrate such acquisitions;

• our ability to integrate technology into our services and products to avoid obsolescence and provide scalability;

• the reliability, execution and accuracy of our services, particularly our BPO services; and

• client willingness to accept any price increases for our services and products.

In addition, we are subject to risks of losing clients due to consolidation in each of the markets we serve. Our inability to retain existing clients, sell additional services and products, or successfully develop and implement new and enhanced services and products and attract new clients, and accordingly, increase our revenues, could have a material adverse effect on our results of operations.

We typically face a long selling cycle to secure new clients in each of our businesses as well as long implementation periods that require significant resource commitments, which result in a long lead time before we receive revenues from new client relationships.

The industries in which we compete generally consist of mature businesses and markets and the companies that participate in these industries have well-established business operations, systems and relationships. Accordingly, each of our businesses typically faces a long selling cycle to secure a new client. Even if we are successful in obtaining a new client engagement, it is generally followed by a long implementation period in which the services are planned in detail and we demonstrate to the client that we can successfully integrate our processes and resources with their operations. We also typically negotiate and enter into a contractual relationship with the new client during this period. There is then a long implementation period in order to commence providing the services.

We typically incur significant business development expenses during the selling cycle. We may not succeed in winning a new client's business, in which case we receive no revenues and may receive no reimbursement for such expenses. Even if we succeed in developing a relationship with a potential client and begin to plan the services in detail, such potential client may choose a competitor or decide to retain the work in-house prior to the time a final contract is signed. If we enter into a contract with a client, we will typically receive no revenues until implementation actually begins. In addition, a significant portion of our revenue is based upon the success of our clients' marketing programs, which may not generate the transaction volume we anticipate. Our clients may also experience delays in obtaining internal approvals or delays associated with technology or system implementations, thereby further lengthening the implementation cycle. If we are not successful in obtaining contractual commitments after the selling cycle, in maintaining contractual commitments after the implementation cycle or in maintaining or reducing the duration of unprofitable initial periods in our contracts, it may have a material adverse effect on our business, results of operations and financial condition. Furthermore, the time and effort required to complete the implementation phases of new contracts makes it difficult to accurately predict the timing of revenues from new clients as well as our costs.

Acquisitions are a significant part of our growth strategy and we may not be successful in identifying suitable acquisition candidates, completing such acquisitions or integrating the acquired businesses, which could have a material adverse effect on our business, results of operations, financial condition and growth.

Historically, acquisitions have played a significant role in our expansion into new businesses and in the growth of some of our businesses. Acquiring complementary businesses is a significant component of our growth strategy. Accordingly, we frequently evaluate possible acquisition transactions for our business. However, we may not be able to identify suitable acquisitions, and such transactions may not be financed and completed on acceptable terms. We may incur significant expenses in evaluating such acquisitions. Furthermore, any future acquisitions may not be successful. In addition, we may be competing with larger competitors with substantially greater resources for acquisition targets. Any deficiencies in the process of integrating companies we may acquire could have a material adverse effect on our results of operations and financial condition. Acquisitions entail a number of risks including, among other things:

• failure to achieve anticipated revenues, earnings or cash flow;

• increased expenses;

• diversion of management time and attention;

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• failure to retain the acquired business' customers or personnel;

• difficulties in realizing projected efficiencies;

• ability to realize synergies and cost savings;

• difficulties in integrating systems and personnel; and

• inaccurate assessment of liabilities.

Our failure to adequately address these acquisition risks could have a material adverse effect on our business, results of operations, financial condition and growth. Future acquisitions may reduce our cash resources available to fund our operations and capital expenditures and could result in increased amortization expense related to any intangible assets acquired, potentially dilutive issuances of equity securities or the incurrence of debt, which could increase our interest expense.

Our business, results of operations, financial condition or liquidity may be materially and adversely affected by errors and omissions and the outcome of certain actual and potential claims, lawsuits and proceedings.

We are subject to various actual and potential claims, lawsuits and other proceedings relating principally to alleged errors and omissions in connection with our conduct in each of our businesses, including the handling and adjudicating of claims and the placement of insurance. Because such placement of insurance and handling claims can involve substantial amounts of money, clients may assert errors and omissions claims against us alleging potential liability for all or part of the amounts in question. Claimants may seek large damage awards, and these claims may involve potentially significant legal costs. Such claims, lawsuits and other proceedings could, for example, include claims for damages based on allegations that our employees or sub-agents improperly failed to procure coverage, report claims on behalf of clients, provide insurance companies with complete and accurate information relating to the risks being insured or appropriately apply funds that we hold for our clients on a fiduciary basis.

While we would expect most of the errors and omissions claims made against us to be covered by our professional indemnity insurance (subject to our self-insured deductibles), our results of operations, financial condition and liquidity may be materially and adversely affected if, in the future, our insurance coverage proves to be inadequate or unavailable, or if there is an increase in liabilities for which we self-insure. Our ability to obtain professional indemnity insurance in the amounts and with the deductibles we desire in the future may be materially and adversely impacted by general developments in the market for such insurance or our own claims experience. In addition, claims, lawsuits and other proceedings may harm our reputation or divert management resources away from operating our business.

We may lose clients or business as a result of consolidation within the financial services industry.

There has been considerable consolidation in the financial services industry, driven primarily by the acquisition of small and mid-size organizations by larger entities. We expect this trend to continue. As a result, we may lose business or suffer decreased revenues from retail insurance brokerage firms that are acquired by other firms. Similarly, we may lose business or suffer decreased revenues if one or more of our Payment Protection clients or distributors consolidate or align themselves with other companies. To date, our business has not been materially affected by consolidation. However, we may be affected by industry consolidation that occurs in the future, particularly if any of our significant clients are acquired by organizations that already possess the operations, services and products that we provide.

Our ability to implement and execute our strategic plans may not be successful and, accordingly, we may not be successful in achieving our strategic goals, which may materially and adversely affect our business.

We may not be successful in developing and implementing our strategic plans for our businesses or the operational plans that have been or need to be developed to implement these strategic plans. If the development or implementation of such plans is not successful, we may not produce the revenue, margins, earnings or synergies that we need to be successful. We may also face delays or difficulties in implementing service, product, process and system improvements, which could adversely affect the timing or effectiveness of margin improvement efforts in our businesses and our ability to successfully compete in the markets we serve. The execution of our strategic and operating plans will, to some extent, also be dependent on external factors that we cannot control. In addition, these strategic and operational plans need to continue to be assessed and reassessed to meet the challenges and needs of our businesses in order for us to remain competitive. The failure to implement and execute our strategic and operating plans in a timely manner or at all, realize the cost savings or other benefits or improvements associated with such plans, have financial resources to fund the costs associated with such plans or incur costs in excess of anticipated amounts, or sufficiently assess and reassess these plans could have a material and adverse effect on our business or results of operations.

We may not effectively manage our growth, which could materially harm our business.

The growth of our business has placed and may continue to place significant demands on our management, personnel, systems and resources. To manage our growth, we must continue to improve our operational and financial systems and managerial controls and procedures, and we will need to continue to expand, train and manage our personnel. We must also maintain close coordination among our technology, compliance, legal, risk management, accounting, finance, marketing and sales organizations. We may not manage our growth effectively, and if we fail to do so, our business could be materially and adversely harmed.

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If we continue to grow, we may be required to increase our investment in facilities, personnel and financial and management systems and controls. Continued growth, especially in connection with expansion into new business lines, may also require expansion of our procedures for monitoring and assuring our compliance with applicable regulations and that we recruit, integrate, train and manage a growing employee base. The expansion of our existing businesses, our expansion into new businesses and the resulting growth of our employee base increase our need for internal audit and monitoring processes that are more extensive and broader in scope than those we have historically required. We may not be successful in implementing all of the processes that are necessary. Further, unless our growth results in an increase in our revenues that is proportionate to the increase in our costs associated with this growth, our operating margins and profitability will be materially and adversely affected.

As a holding company, we depend on the ability of our subsidiaries to transfer funds to us to pay dividends and to meet our obligations.

We act as a holding company for our subsidiaries and do not have any significant operations of our own. Dividends from our subsidiaries are our principal sources of cash to meet our obligations and pay dividends, if any, on our common stock. These obligations include our operating expenses and interest and principal payments on our current and any future borrowings. The agreements governing our credit facilities restrict our subsidiaries' ability to pay dividends or otherwise transfer cash to us. Under our credit facility, our subsidiaries are permitted to make distributions to us if no default or event of default has occurred and is continuing at the time of such distribution. If the cash we receive from our subsidiaries pursuant to dividends or otherwise is insufficient for us to fund any of these obligations, or if a subsidiary is unable to pay dividends to us, we may be required to raise cash through the incurrence of additional debt, the issuance of additional equity or the sale of assets.

The payment of dividends and other distributions to us by each of the regulated insurance company subsidiaries in our Payment Protection segment is regulated by insurance laws and regulations of the states in which they operate. In general, dividends in excess of prescribed limits are deemed "extraordinary" and require insurance regulatory approval. Ordinary dividends, for which no regulatory approval is generally required, are limited to amounts determined by a formula, which varies by state. Some states have an additional stipulation that dividends may only be paid out of earned surplus. States also regulate transactions between our insurance company subsidiaries and our other subsidiaries, such as those relating to the shared services, and in some instances, require prior approval of such transactions within the holding company structure. If insurance regulators determine that payment of an ordinary dividend or any other payments by our insurance subsidiaries to us (such as payments for employee or other services) would be adverse to policyholders or creditors, the regulators may block or otherwise restrict such payments that would otherwise be permitted without prior approval. In addition, there could be future regulatory actions restricting the ability of our insurance subsidiaries to pay dividends or share services.

Our success is dependent upon the retention and acquisition of talented people and the skills and abilities of our management team and key personnel.

Our business depends on the efforts, abilities and expertise of our senior executives, particularly our Chairman, President and Chief Executive Officer, Richard S. Kahlbaugh, and our other key personnel. Mr. Kahlbaugh and our other senior executives are important to our success because they have been instrumental in setting our strategic direction, operating our business, identifying, recruiting and training key personnel, maintaining relationships with our clients, and identifying business opportunities. The loss of one or more of these executives or other key individuals could impair our business and development until qualified replacements are found. We may not be able to replace these individuals quickly or with persons of equal experience and capabilities. Although we have employment agreements with certain of these individuals, we cannot prevent them from terminating their employment with us. In addition, our non-compete agreements with such individuals may not be enforced by the courts. We do not maintain key man life insurance policies on any of our executive officers except for Mr. Kahlbaugh. If we are unable to attract and retain talented employees, it could have a material adverse effect on our business, operating results and financial condition.

We may need to raise additional capital in the future, but there is no assurance that such capital will be available on a timely basis, on acceptable terms or at all.

We may need to raise additional funds in order to grow our businesses or fund our strategy or acquisitions. Additional financing may not be available in sufficient amounts or on terms acceptable to us and may be dilutive to existing stockholders if raised through additional equity offerings. A significant portion of our funding is under our existing credit facility, which matures in August 2017. Additionally, any securities issued to raise such funds may have rights, preferences and privileges senior to those of our existing stockholders. If adequate funds are not available on a timely basis or on acceptable terms, our ability to expand, develop or enhance our services and products, enter new markets, consummate acquisitions or respond to competitive pressures could be materially limited.

Risks Related to Our Payment Protection Segment

Our Payment Protection segment relies on independent financial institutions, lenders and retailers to distribute its services and products, and the loss of these distribution sources, or the failure of our distribution sources to sell our Payment Protection products could materially and adversely affect our business and results of operations.

We distribute our Payment Protection products through financial institutions, lenders and retailers. Although our contracts with these clients are typically exclusive, they can be canceled on relatively short notice. In addition, the distributors typically do not have any minimum performance or sales requirements and our Payment Protection revenue is dependent on the level of business conducted by

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the distributor as well as the effectiveness of their sales efforts for our Payment Protection products, each of which is beyond our control. The impairment of our distribution relationships, the loss of a significant number of our distribution relationships, the failure to establish new distribution relationships, the failure to offer increasingly competitive products, the increase in sales of competitors' services and products by these distributors or the decline in their overall business activity or the effectiveness of their sales of our Payment Protection products could materially reduce our Payment Protection sales and revenues. Also, the growth of our Payment Protection segment is dependent in part on our ability to identify, attract and retain new distribution relationships and successfully implement our information systems with those of our new distributors.

Reinsurance may not be available or adequate to protect us against losses, and we are subject to the credit risk of reinsurers.

As part of our overall risk and capacity management strategy, we purchase reinsurance for a substantial portion of the risks underwritten by our Payment Protection segment through third party reinsurance companies. Market conditions beyond our control determine the availability and cost of the reinsurance protection we seek to renew or purchase. States also could impose restrictions on these reinsurance arrangements, such as requiring the insurance company subsidiary to retain a minimum amount of underwriting risk, which could affect our profitability and results of operations. Reinsurance for certain types of catastrophes generally could become unavailable or prohibitively expensive for some of our businesses. Such changes could substantially increase our exposure to the risk of significant losses from natural or man-made catastrophes and could hinder our ability to write future business.

Although the reinsurer is liable to the respective insurance subsidiary to the extent of the ceded reinsurance, the insurance company remains liable to the insured as the direct insurer on all risks reinsured. Ceded reinsurance arrangements, therefore, do not eliminate our insurance company obligation to pay claims. While the captive reinsurance companies owned by our clients are generally required to maintain trust accounts with sufficient assets to cover the reinsurance liabilities and we manage these trust accounts on behalf of these reinsurance companies, we are subject to credit risk with respect to our ability to recover amounts due from reinsurers. The inability to collect amounts due from reinsurers could have a material adverse effect on our results of operations and financial condition.

Our reinsurance facilities are generally subject to annual renewal. We may not be able to maintain our current reinsurance facilities and our clients may not be able to continue to operate their captive reinsurance companies. As a result, even where highly desirable or necessary, we may not be able to obtain other reinsurance facilities in adequate amounts and at favorable rates. If we are unable to renew our expiring facilities or to obtain or structure new reinsurance facilities, either our net exposures would increase or, if we are unwilling to bear an increase in net exposures, we may have to reduce the level of our underwriting commitments. Either of these potential developments could have a material adverse effect on our results of operations and financial condition.

Due to the structure of some of our commissions, we are exposed to risks related to the creditworthiness of some of our agents.

We are subject to the credit risk of some of the agents with which we contract within our Payment Protection segment. We typically advance agents' commissions as part of our product offerings. These advances are a percentage of the premium charged. If we over-advance such commissions to agents, they may not be able to fulfill their payback obligations, and it could have a material adverse effect on our results of operations and financial condition.

A downgrade in the ratings of our insurance company subsidiaries may materially and adversely affect relationships with clients and adversely affect our results of operations.

Claims paying ability and financial strength ratings are each a factor in establishing the competitive position of our insurance company subsidiaries. A ratings downgrade, or the potential for such a downgrade, could, among other things, materially and adversely affect relationships with clients, brokers and other distributors of our services and products, thereby negatively impacting our results of operations, and materially and adversely affect our ability to compete in our markets. Rating agencies can be expected to continue to monitor our financial strength and claims paying ability, and no assurances can be given that future ratings downgrades will not occur, whether due to changes in our performance, changes in rating agencies' industry views or ratings methodologies, or a combination of such factors.

Our actual claims losses may exceed our reserves for claims, which may require us to establish additional reserves that may materially and adversely reduce our business, results of operations and financial condition.

We maintain reserves to cover our estimated ultimate exposure for claims with respect to reported claims and incurred but not reported claims as of the end of each accounting period. Reserves, whether calculated under accounting principles generally accepted in the United States or statutory accounting principles, do not represent an exact calculation of exposure. Instead, they represent our best estimates, generally involving actuarial projections, of the ultimate settlement and administration costs for a claim or group of claims, based on our assessment of facts and circumstances known at the time of calculation. The adequacy of reserves will be impacted by future trends in claims severity, frequency, judicial theories of liability and other factors. These variables are affected by external factors such as changes in the economic cycle, unemployment, changes in the social perception of the value of work, emerging medical perceptions regarding physiological or psychological causes of disability, emerging health issues, new methods of treatment or accommodation, inflation, judicial trends, legislative changes, as well as changes in claims handling procedures. Many of these items are not directly quantifiable, particularly on a prospective basis. Reserve estimates are refined as experience develops. Adjustments to reserves, both positive and negative, are reflected in the statement of income of the period in which such estimates are updated. Because

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the establishment of reserves is an inherently uncertain process involving estimates of future losses, we can give no assurances that ultimate losses will not exceed existing claims reserves. In general, future loss development could require reserves to be increased, which could have a material adverse effect on our business, results of operations and financial condition.

Our investment portfolio is subject to several risks that may diminish the fair value of our invested assets and cash and may materially and adversely affect our business and profitability.

Investment returns are an important part of our overall profitability and significant interest rate fluctuations, or prolonged periods of low interest rates, could impair our profitability. Interest rates are highly sensitive to many factors, including governmental monetary policies, domestic and international economic and political conditions and other factors beyond our control. We have a significant portion of our investments in cash and highly liquid short-term investments. Accordingly, during prolonged periods of declining or low market interest rates, such as those we have been experiencing since 2008, the interest we receive on such investments decreases and affects our profitability. In addition, certain factors affecting our business, such as volatility of claims experience, could force us to liquidate securities prior to maturity, causing us to incur capital losses. If we do not structure our investment portfolio so that it is appropriately matched with our insurance liabilities, we may be forced to liquidate investments prior to maturity at a significant loss to cover such liabilities.

The fair value of the fixed maturity securities in our portfolio and the investment income from these securities fluctuate depending on general economic and market conditions. Because all of our fixed maturity securities are classified as available for sale, changes in the fair value of these securities are reflected on our Consolidated Balance Sheets. The fair value generally increases or decreases in an inverse relationship with fluctuations in interest rates, while net investment income realized by us from future investments in fixed maturity securities will generally increase or decrease with interest rates. In addition, actual net investment income and/or cash flows from investments that carry prepayment risk may differ from those anticipated at the time of investment as a result of interest rate fluctuations.

We employ asset/liability management strategies to reduce the adverse effects of interest rate volatility and to increase the likelihood that cash flows are available to pay claims as they become due. Our asset/liability management strategies may fail to eliminate or reduce the adverse effects of interest rate volatility, and significant fluctuations in the level of interest rates may therefore have a material adverse effect on our results of operations and financial condition.

We are subject to credit risk in our investment portfolio, primarily from our investments in corporate bonds, preferred securities and municipal bonds. Defaults by third parties in the payment or performance of their obligations could reduce our investment income and realized investment gains or result in the recognition of investment losses. The fair value of our investments may be materially and adversely affected by increases in interest rates, downgrades in the corporate bonds included in the portfolio and by other factors that may result in the recognition of other-than-temporary impairments. Each of these events may cause us to reduce the fair value of our investment portfolio.

Further, the fair value of any particular fixed maturity security is subject to impairment based on the creditworthiness of a given issuer. Our fixed maturity portfolio may include below investment grade securities (rated "BB" or lower by nationally recognized securities rating organizations). These investments generally provide higher expected returns, but present greater risk and can be less liquid than investment grade securities. A significant increase in defaults and impairments on our fixed maturity investment portfolio could have a material adverse effect on our results of operations and financial condition.

Risks Related to Our BPO Segment

A significant portion of our BPO revenues are attributable to one client, and any loss of business from, or change in our relationship with this client could materially and adversely affect our business, results of operations and financial condition.

We have derived and are likely to continue to derive a significant portion of our BPO revenues from a limited number of clients, specifically, in our BPO business, services provided to National Union Fire Insurance Company of Pittsburgh, PA ("NUFIC"). See the section "QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK - Concentration Risk in this report, regarding our concentration risk. The loss of business or a reduction in the fees or other change in relationship with any of our significant clients, particularly NUFIC, could have a material adverse effect on our business, results of operations and financial condition. Additionally, there is no guarantee that we would be able to generate new business in the event that we lose a significant client.

The profitability of our BPO segment will suffer if we are not able to price our outsourcing services appropriately, maintain asset utilization levels and control our costs.

The profitability of our BPO segment is largely a function of the efficiency with which we utilize our assets and the pricing that we are able to obtain for our services. Our utilization rates are affected by a number of factors, including hiring and assimilating new employees, forecasting demand for our services and our need to devote time and resources to training, professional development and other typically non-chargeable activities. The prices we are able to charge for our services are affected by a number of factors, including our clients' perceptions of our ability to add value through our services, competition, the introduction of new services or products by

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us or our competitors and general economic conditions. Our ability to accurately estimate, attain and sustain revenues over increasingly longer contract periods could negatively impact our margins and cash flows. Therefore, if we are unable to price appropriately or manage our asset utilization levels, there could be a material adverse effect on our business, results of operations and financial condition. The profitability of our BPO segment is also a function of our ability to control our costs and improve our efficiency. As we increase the number of our employees and grow our business, we may not be able to manage the significantly larger workforce that may result and our profitability may be adversely and materially affected.

We enter into fixed-term contracts and per-unit priced contracts with our BPO clients, and our failure to correctly price these contracts may negatively affect our profitability.

The pricing of our services is usually included in contracts entered into with our clients, many of which are for terms of between one and three years. In certain cases, we have committed to pricing over this period with only limited sharing of risk regarding inflation. If we fail to estimate accurately future wage inflation rates or our costs, or if we fail to accurately estimate the productivity benefits we can achieve under a contract, it could have a material adverse effect on our profitability.

Some of our BPO contracts contain provisions which, if triggered, could result in the payment of penalties or lower future revenues and could materially and adversely affect our business, results of operations and financial condition.

Many of our BPO contracts contain service level and performance provisions, including standards relating to the quality of our services, that would provide our clients with the right to terminate their contract if we do not meet pre-agreed service level requirements and in the case of our contract with NUFIC, require us to pay penalties. Our contract with NUFIC also provides that, during the term of the contract and for 18 months thereafter, we may not develop or service products for NUFIC's competitors that are substantially similar to those we administer on behalf of NUFIC. Failure to meet these requirements could result in the payment of significant penalties by us to our clients which, in turn, could have a material adverse effect on our business, results of operations and financial condition.

Risks Related to our Brokerage Segment

We may not be able to accurately forecast our brokerage commissions and fee revenues because our commissions and fees depend on premiums charged by insurance companies, which historically have varied and, as a result, have been difficult to predict.

Our Brokerage segment derives revenue principally from commissions and fees paid by insurance companies. Commissions and fees are based upon a percentage of premiums paid by customers for insurance products. The amount of such commissions and fees are therefore highly dependent on premium rates charged by insurance companies. We do not determine insurance premium rates. Premium rates are determined by insurance companies based on a fluctuating market and in many cases are regulated by the states in which they operate. We have generally encountered declining rates for property and casualty ("P&C") insurance since late 2006.

Premium pricing within the commercial P&C insurance market in which we operate historically has been cyclical based on the underwriting capacity of the insurance carriers operating in this market and has been impacted by general economic conditions. In a period of decreasing insurance capacity, insurance carriers typically raise premium rates. This type of market frequently is referred to as a "hard" market. In a period of increasing insurance capacity, insurance carriers tend to reduce premium rates. This type of market frequently is referred to as a "soft" market, which the commercial P&C market has experienced since 2006, with a slight firming of the market in 2012. Because our commission rates usually are calculated as a percentage of the gross premium charged for the insurance products that we place, our revenues are affected by the pricing cycle of the market and the amount of risk that is insured. General economic conditions may impact the amount of risk that is insured by companies by affecting the value of the insured properties, the size of company workforces and the willingness of companies to self-insure certain risks to reduce insurance expenses. The frequency and severity of natural disasters and other catastrophic events can affect the timing, duration and extent of industry cycles for many of the product lines we distribute. It is very difficult to predict the severity, timing or duration of these cycles. The cyclical nature of premium pricing in the commercial P&C insurance market may make our results of operations volatile and unpredictable. To the extent that an economic downturn and/or "soft" market persists for an extended period of time, our Brokerage commissions and fees, financial condition and results of operations may be materially and adversely affected.

We may experience reductions in the commission revenues we receive from risk-bearing insurance companies as these insurance companies seek to reduce their expenses by reducing commission rates payable to non-affiliated brokers or agents such as us, which may significantly affect the profitability of our Brokerage segment.

As traditional risk-bearing insurance companies continue to outsource the production of premium revenues to non-affiliated brokers or agents such as us, those insurance companies may seek to reduce further their expenses by reducing the commission rates payable to those insurance agents or brokers. The reduction of these commission rates, along with general volatility and/or declines in premiums, may significantly affect the profitability of our Brokerage segment. Because we do not determine the timing or extent of premium pricing changes, we may not be able to accurately forecast our commission revenues, including whether they will significantly decline. As a result, we may have to adjust our budgets to account for unexpected changes in revenues, and any decreases in premium rates may have a material adverse effect on our results of operations.

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The loss of the services of any of our highly qualified brokers could harm our business and operating results.

Our future performance depends on our ability to recruit and retain highly qualified brokers, including brokers who work in the businesses that we have acquired or may acquire in the future. Competition for productive brokers is intense, and our inability to recruit or retain these brokers could harm our business and operating results. While many of our senior brokers own an equity interest in us and many have entered into employment agreements with us, these brokers may not serve the term of their employment agreements or renew their employment agreements upon expiration. Moreover, any of the brokers who leave our firm may not comply with the provisions of their employment agreements that preclude them from competing with us or soliciting our customers and employees, or these provisions may not be enforceable under applicable law or sufficient to protect us from the loss of any business. In addition, we do not have employment, non-competition or non-solicitation agreements with all of our brokers. We may not be able to retain or replace the business generated by a broker who leaves our firm or replace that broker with an equally qualified broker who is acceptable to our clients.

Because our Brokerage segment is highly concentrated in California, adverse economic conditions or regulatory changes in that state could materially and adversely affect our financial condition, results of operations and cash flows.

A significant portion of our Brokerage segment is concentrated in California. We believe the regulatory environment for insurance intermediaries in California currently is no more restrictive than in other states. The insurance industry is a state-regulated industry, and therefore, state legislatures may enact laws, and state insurance regulators may adopt regulations, that adversely affect the profitability of insurance industries in their states. Because our Brokerage segment is concentrated in a few states, we face greater exposure to unfavorable changes in regulatory conditions in those states than insurance intermediaries whose operations are more diversified through a greater number of states. In addition, the occurrence of adverse economic conditions, natural or other disasters, or other circumstances specific to or otherwise significantly impacting these states could have a material adverse effect on our financial condition, results of operations and cash flows.

If insurance carriers begin to transact business without relying on wholesale insurance brokers, our business, results of operations, financial condition and cash flows could suffer.

Our Brokerage segment acts as an intermediary between retail agents and insurance carriers that, in some cases, will not transact business directly with retail insurance brokers and agents. If insurance carriers change the way they conduct business and begin to transact business with retail agents without including us or if retail agents are enabled to transact business directly with insurance carriers as a result of changes in the surplus lines and specialty insurance markets, technological advancements or other factors, our role in the distribution of surplus lines and specialty insurance products could be eliminated or substantially reduced, and our business, results of operations, financial condition and cash flows could suffer. In addition, if insurers retain more risk or cede risks that have traditionally been placed facultatively to treaty reinsurance arrangements, then revenue and cash flow attributable to eReinsure could suffer.

Our growth strategy may involve opening or acquiring new offices and expanding internationally and will involve hiring new brokers and underwriters for our Brokerage segment, which will require substantial investment by us and may materially and adversely affect our results of operations and cash flows.

Our ability to grow our Brokerage segment organically depends in part on our ability to open or acquire new offices, expand internationally and recruit new brokers and underwriters. We may not be successful in any efforts to open new offices, expand internationally or hire new brokers or underwriters. The costs of opening a new office, expanding internationally and hiring the necessary personnel to staff the office can be substantial, and we often are required to commit to multi-year, non-cancelable lease agreements. It has been our experience that our new Brokerage offices may not achieve profitability on a stand-alone basis until they have been in operation for at least three years. In addition, we often hire new brokers and underwriters with the expectation that they will not become profitable until 12 months after they are hired. The cost of investing in new offices, brokers and underwriters may have a material adverse effect on our results of operations and cash flows. Moreover, we may not be able to recover our investments or these offices, brokers and underwriters may not achieve profitability.

Our financial results may be materially and adversely affected by the occurrence of catastrophes.

Portions of our Brokerage segment involve the placement of insurance policies that cover losses from unpredictable events such as hurricanes, windstorms, hailstorms, earthquakes, fires, industrial explosions, freezes, riots, floods and other man-made or natural disasters, including acts of terrorism. The incidence and severity of these catastrophes in any given period are inherently unpredictable, and climate change could further exacerbate the severity and frequency of weather-related events. We are generally eligible to earn profit commissions, which are commissions we receive from carriers based upon the ultimate profitability of the business that we place with those carriers. The occurrence and severity of catastrophes could impair the amount of profit commissions that we receive in the future which could have a material adverse effect on our results of operations and financial condition. Capacity in the reinsurance market is adversely impacted by catastrophes, which can adversely impact our results of operations.

We are subject to risks related to our profit commission arrangements and other compensation arrangements.

We derive a portion of our Brokerage segment revenues from profit commissions based on the profitability of the insurance business we place with a carrier. Due to the inherent uncertainty of loss in our industry and changes in underwriting criteria due in part to the

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high loss ratios experienced by some carriers, we cannot predict the receipt of these profit commissions and the amount of such profit commissions may be less than we anticipated. Because profit commissions affect our revenues, any decrease in such amounts could have a material adverse effect on our results of operations and financial condition.

In addition, other companies have been the subject of investigations regarding profit commission arrangements by various governmental authorities within the past several years. Some of these investigations have focused on whether retail insurance brokers have adequately disclosed to their customers the receipt of profit commissions that are paid by insurance carriers to brokers based on the volume of business placed by the broker with the insurance carrier and other factors. We have not been subject to any investigations that are focused on our disclosure of profit commissions. The legislatures of various states may adopt new laws addressing profit commission arrangements, including laws limiting or prohibiting such arrangements, and adding new or different disclosure of such arrangements to insureds. Various state departments of insurance may also adopt new regulations addressing these matters. While we cannot predict the outcome of future governmental actions regarding commission payment practices or the responses by the market and government regulators, any unfavorable resolution of these matters could have a material adverse effect on our results of operations.

Risks Related to Regulatory and Legal Matters

We are subject to extensive governmental laws and regulations, which increase our costs and could restrict the conduct of our business.

Our operating subsidiaries are subject to extensive regulation and supervision in the jurisdictions in which they do business. Such regulation or compliance could reduce our profitability or limit our growth by increasing the costs of compliance, limiting or restricting the products or services we sell, or the methods by which we sell our services and products, or subjecting our businesses to the possibility of regulatory actions or proceedings. In all jurisdictions, the applicable laws and regulations are subject to amendment or interpretation by regulatory authorities. Generally, such authorities have broad discretion to grant, renew or revoke licenses and approvals and to implement new regulations. We may be precluded or temporarily suspended from carrying on some or all of our activities or otherwise fined or penalized in any jurisdiction in which we operate. We can give no assurances that our businesses can continue to be conducted in each jurisdiction as they have been in the past. Such regulation is generally designed to protect the interests of policyholders. To that end, the laws of the various states establish insurance departments with broad powers with respect to matters, such as:

• licensing and authorizing companies and agents to transact business;

• regulating capital and surplus and dividend requirements;

• regulating underwriting limitations;

• regulating the ability of companies to enter and exit markets;

• imposing statutory accounting requirements and annual statement disclosures;

• approving changes in control of insurance companies;

• regulating premium rates, including the ability to increase or maintain premium rates;

• regulating trade billing and claims practices;

• regulating certain transactions between affiliates;

• regulating reinsurance arrangements, including the balance sheet credit that may be taken by the ceding or direct insurer;

• mandating certain insurance benefits;

• regulating the content of disclosures to consumers;

• regulating the type, amounts and valuation of investments;

• mandating assessments or other surcharges for guaranty funds and the ability to recover such assessments in the future through premium increases;

• regulating market conduct and sales practices of insurers and agents, including compensation arrangements; and

• regulating a variety of other financial and non-financial components of an insurer's business.

Our non-insurance operations and certain aspects of our insurance operations are subject to various other federal and state regulations, including state and federal consumer protection, privacy and other laws.

An insurer's ability to write new business is partly a function of its statutory surplus. Maintaining appropriate levels of surplus as measured by Statutory Accounting Principles is considered important by insurance regulatory authorities and the private agencies that rate insurers' claims-paying abilities and financial strength. Failure to maintain certain levels of statutory surplus could result in increased regulatory scrutiny, a downgrade by rating agencies or enforcement action by regulatory authorities.

We may be unable to maintain all required licenses and approvals and, despite our best efforts, our business may not fully comply with the wide variety of applicable laws and regulations or the relevant regulators' interpretations of such laws and regulations. Also, some regulatory authorities have relatively broad discretion to grant, renew or revoke licenses and approvals or to limit or restrain operations in their jurisdiction. If we do not have the requisite licenses and approvals or do not comply with applicable regulatory requirements, the insurance regulatory authorities could preclude or temporarily suspend us from operating, limit some or all of our activities or financially penalize us. These types of actions could have a material adverse effect on our results of operations and financial condition.

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Failure to protect our clients' confidential information and privacy could result in the loss of our reputation and customers, reduction in our profitability and subject us to fines, penalties and litigation and adversely affect our results of operations and financial condition.

We retain confidential information in our information systems, and we are subject to a variety of privacy regulations and confidentiality obligations. For example, some of our activities are subject to the privacy regulations of the Gramm-Leach-Bliley Act. We also have contractual obligations to protect confidential information we obtain from our clients. These obligations generally require us, in accordance with applicable laws, to protect such information to the same extent that we protect our own confidential information. We have implemented physical, administrative and logical security systems with the intent of maintaining the physical security of our facilities and systems and protecting our, our clients' and their customers' confidential information and personally-identifiable information against unauthorized access through our information systems or by other electronic transmission or through the misdirection, theft or loss of data. Despite such efforts, we may be subject to a breach of our security systems that results in unauthorized access to our facilities and/or the information we are trying to protect. Anyone who is able to circumvent our security measures and penetrate our information systems could access, view, misappropriate, alter, or delete any information in the systems, including personally identifiable customer information and proprietary business information. In addition, most states require that customers be notified if a security breach results in the disclosure of personally-identifiable customer information. Any compromise of the security of our information systems that results in inappropriate disclosure of such information could result in, among other things, unfavorable publicity and damage to our reputation, governmental inquiry and oversight, difficulty in marketing our services, loss of clients, significant civil and criminal liability and the incurrence of significant technical, legal and other expenses, any of which may have a material adverse effect on our results of operations and financial condition.

Changes in regulation may adversely affect our business, results of operations and financial condition and limit our growth.

Legislation or other regulatory reform that increases the regulatory requirements imposed on us or that changes the way we are able to do business may significantly harm our business or results of operations in the future. If we were unable for any reason to comply with these requirements, it could result in substantial costs to us and may have a material adverse effect on our results of operations and financial condition. Legislative or regulatory changes that could significantly harm us and our subsidiaries include, but are not limited to:

• prohibiting retailers from providing debt cancellation policies or other ancillary products;

• prohibiting insurers from fronting captive reinsurance arrangements;

• placing or reducing interest rate caps on the consumer finance products our clients offer;

• limitations or imposed reductions on premium levels or the ability to raise premiums on existing policies;

• increases in minimum capital, reserves and other financial viability requirements;

• impositions of increased fines, taxes or other penalties for improper licensing, the failure to promptly pay claims, however defined, or other regulatory violations;

• increased licensing requirements;

• restrictions on the ability to offer certain types of products;

• new or different disclosure requirements on certain types of products; and

• imposition of new or different requirements for coverage determinations.

In recent years, the state insurance regulatory framework has come under increased federal scrutiny and some state legislatures have considered or enacted laws that may alter or increase state authority to regulate insurance companies and insurance holding companies. Further, the National Association of Insurance Commissioners ("NAIC") and state insurance regulators are re-examining existing laws and regulations, specifically focusing on modifications to holding company regulations, interpretations of existing laws and the development of new laws and regulations. Additionally, there have been attempts by the NAIC and several states to limit the use of discretionary clauses in policy forms. The elimination of discretionary clauses could increase our costs under our Payment Protection products. New interpretations of existing laws and the passage of new legislation may harm our ability to sell new services and products and increase our claims exposure on policies we issued previously. In addition, the NAIC's proposed expansion of the Market Conduct Annual Statement could increase the likelihood of examinations of insurance companies operating in niche markets. Court decisions that impact the insurance industry could result in the release of previously protected confidential and privileged information by departments of insurance, which could increase the risk of litigation.

Traditionally, the U.S. federal government has not directly regulated the business of insurance. However, federal legislation and administrative policies in several areas can significantly and adversely affect insurance companies. These areas include financial services regulation, securities regulation, privacy, tort reform legislation and taxation. For example, the Dodd-Frank Act provides for the enhanced federal supervision of financial institutions, including insurance companies in certain circumstances, and financial activities that represent a systemic risk to financial stability or the U.S. economy.

Under the Dodd-Frank Act, the Federal Insurance Office was established within the U.S. Treasury Department to monitor all aspects of the insurance industry and its authority would likely extend to all lines of insurance that our insurance subsidiaries write. The director of the Federal Insurance Office will serve in an advisory capacity to the Financial Stability Oversight Council and have the ability to recommend that an insurance company or an insurance holding company be subject to heightened prudential standards by the Federal Reserve, if it is determined that financial distress at the company could pose a threat to the financial stability of the U.S. economy. The

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Dodd-Frank Act also provides for the preemption of state laws when inconsistent with certain international agreements and would streamline the regulation of reinsurance and surplus lines insurance. At this time, we cannot assess whether any other proposed legislation or regulatory changes will be adopted, or what impact, if any, the Dodd-Frank Act or any other legislation or changes could have on our results of operations, financial condition or liquidity.

With regard to payment protection products, there are federal and state laws and regulations that govern the disclosures related to lenders' sales of those products. Our ability to administer those products on behalf of financial institutions is dependent upon their continued ability to sell those products. To the extent that federal or state laws or regulations change to restrict or prohibit the sale of these products, our administration services and fees revenues would be adversely affected. The Dodd-Frank Act created a new Consumer Financial Protection Bureau ("CFPB") designed to add new regulatory oversight for these lender products. Recently, the CFPB's enforcement actions have resulted in large refunds and civil penalties against financial institutions in connection with their marketing of payment protection and other products. Due to such regulatory actions, some lenders may reduce their sales and marketing of payment protection and other ancillary products, which may adversely affect our administration services and fees revenues. The full impact of the CFPB's oversight is unpredictable and has not yet been realized fully.

Further, in a time of financial uncertainty or a prolonged economic downturn, regulators may choose to adopt more restrictive insurance laws and regulations. For example, insurance regulators may choose to restrict the ability of insurance subsidiaries to make payments to their parent companies or reject rate increases due to the economic environment.

With respect to the P&C insurance policies our Payment Protection segment underwrites, federal legislative proposals regarding National Catastrophe Insurance, if adopted, could reduce the business need for some of the related products we provide. Additionally, as the U.S. Congress continues to respond to the recent housing foreclosure crisis, it could enact legislation placing additional barriers on creditor-placed insurance.

In recent years, several large organizations became subjects of intense public scrutiny due to high-profile data security breaches involving sensitive financial and health information. These events focused national attention on identity theft and the duty of organizations to notify impacted consumers in the event of a data security breach. Existing legislation in most states requires customer notification in the event of a data security breach. In addition, some states are adopting laws and regulations requiring minimum information security practices with respect to the collection and storage of personally-identifiable consumer data, and several bills before Congress contain provisions directed to national information security standards and breach notification requirements. Several significant legal, operational and reputational risks exist with regard to a data breach and customer notification. A breach of data security requiring public notification can result in regulatory fines, penalties or sanctions, civil lawsuits, loss of reputation, loss of clients and reduction of our profitability.

Our business is subject to risks related to litigation and regulatory actions.

We may be materially and adversely affected by judgments, settlements, unanticipated costs or other effects of legal and administrative proceedings now pending or that may be instituted in the future, or from investigations by regulatory bodies or administrative agencies. From time to time, we have had inquiries from regulatory bodies and administrative agencies relating to the operation of our business. Such inquiries may result in various audits, reviews and investigations. An adverse outcome of any investigation by, or other inquiries from, such bodies or agencies could have a material adverse effect on us and result in the institution of administrative or civil proceedings, sanctions and the payment of fines and penalties, changes in personnel, and increased review and scrutiny of us by our clients, regulatory authorities, potential litigants, the media and others.

In particular, our insurance-related operations are subject to comprehensive regulation and oversight by insurance departments in jurisdictions in which we do business. These insurance departments have broad administrative powers with respect to all aspects of the insurance business and, in particular, monitor the manner in which an insurance company offers, sells and administers its products. Therefore, we may from time to time be subject to a variety of legal and regulatory actions relating to our current and past business operations, including, but not limited to:

• disputes over coverage or claims adjudication;

• disputes over claim payment amounts and compliance with individual state regulatory requirements;

• disputes regarding sales practices, disclosures, premium refunds, licensing, regulatory compliance, underwriting and compensation arrangements;

• disputes with taxation and insurance authorities regarding our tax liabilities;

• periodic examinations of compliance with applicable federal and state laws; and

• industry-wide investigations regarding business practices including, but not limited to, the use of finite reinsurance and the marketing and refunding of insurance policies or certificates of insurance.

The prevalence and outcomes of any such actions cannot be predicted, and such actions or any litigation may have a material adverse effect on our results of operations and financial condition. In addition, if we were to experience difficulties with our relationship with a regulatory body in a given jurisdiction, it could have a material adverse effect on our ability to do business in that jurisdiction.

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In addition, plaintiffs continue to bring new types of legal claims against insurance and related companies. Current and future court decisions and legislative activity may increase our exposure to these types of claims. Multi-party or class action claims may present additional exposure to substantial economic, non-economic and/or punitive damage awards. The success of even one of these claims, if it resulted in a significant damage award or a detrimental judicial ruling could have a material adverse effect on our results of operations and financial condition. This risk of potential liability may make reasonable settlements of claims more difficult to obtain. We cannot determine with any certainty what new theories of liability or recovery may evolve or what their impact may be on our businesses.

We cannot predict at this time the effect that current litigation, investigations and regulatory activity will have on the industries in which we operate or our business. In light of the regulatory and judicial environments in which we operate, we will likely become subject to further investigations and lawsuits from time to time in the future. Our involvement in any investigations and lawsuits would cause us to incur legal and other costs and, if we were found to have violated any laws, we could be required to pay fines and damages, perhaps in material amounts. In addition, we could be materially and adversely affected by the negative publicity for the insurance and other financial services industries related to any such proceedings and by any new industry-wide regulations or practices that may result from any such proceedings.

Our cash and cash equivalents could be adversely affected if the financial institutions with which our cash and cash equivalents are deposited fail.

We maintain cash and cash equivalents with major third party financial institutions, including interest-bearing money market accounts. In the United States, these accounts were fully insured by the Federal Deposit Insurance Corporation ("FDIC") regardless of account balance through the Transaction Account Guarantee ("TAG") program created by Section 343 of the Dodd-Frank Act. The expiration of the TAG program on December 31, 2012, caused the FDIC's standard insurance limit of $250,000 per depositor per institution to be reimposed on January 1, 2013. Thus, our accounts containing cash and cash equivalents may exceed the FDIC's standard $250,000 insurance limit from time to time.

Risks Related to Our Indebtedness

Our indebtedness may limit our financial and operating activities and may materially and adversely affect our ability to incur additional debt to fund future needs.

Our debt service obligations vary annually based on the amount of our indebtedness and the associated fixed and floating interest rates. See "MANAGEMENT'S DISCUSSION & ANALYSIS AND RESULTS OF OPERATIONS - Liquidity and Capital Resources - Liquidity" regarding the amount of outstanding debt and our annual debt service. Our total indebtedness was $126.8 million at March 31, 2013 compared to $124.4 million at December 31, 2012. Although we believe that our current cash flow will be sufficient to cover our annual interest expense, any increase in our indebtedness or any decline in the amount of cash available increases the possibility that we could not pay, when due, the principal of, interest on or other amounts due with respect to our indebtedness. In addition, our indebtedness and any future indebtedness we may incur could:

• make it more difficult for us to satisfy our obligations with respect to our indebtedness, including financial and other restrictive covenants, which could result in an event of default under the agreements governing our indebtedness;

• make us more vulnerable to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation;

• require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, thereby reducing the availability of our cash flows to fund working capital, capital expenditures, acquisitions and other general corporate purposes;

• limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;

• place us at a competitive disadvantage compared to competitors that have less debt; and

• limit our ability to borrow additional amounts for working capital, capital expenditures, acquisitions, debt service requirements, execution of our business strategy or other purposes.

Any of the above-listed factors could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Increases in interest rates could increase interest payable under our variable rate indebtedness.

We are subject to interest rate risk in connection with our variable rate indebtedness. See "QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK - Interest Rate Risk" regarding our interest rate risk and "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Liquidity and Capital Resources - Liquidity" regarding the amount of outstanding variable rate debt. Interest rate changes could increase the amount of our interest payments and thus negatively impact our future earnings and cash flows. If we do not have sufficient earnings, we may be required to refinance all or part of our existing debt, sell assets, borrow more money or sell more securities, none of which we can guarantee we will be able to do.

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We may enter into hedging transactions that may become ineffective which adversely impact our financial condition.

Part of our interest rate risk strategy involves entering into hedging transactions to mitigate the risk of variable interest rate instruments by converting the variable interest rate to a fixed interest rate. Each hedging item must be regularly evaluated for hedge effectiveness. If it is determined that a hedging transaction is ineffective, we may be required to record losses reflected in our results of operations which could adversely impact our financial condition.

Despite our indebtedness levels, we and our subsidiaries may still be able to incur more indebtedness, which could further exacerbate the risks related to our indebtedness described above.

We and our subsidiaries may be able to incur substantial additional indebtedness in the future subject to the limitations contained in the agreements governing our indebtedness. If we or our subsidiaries incur additional debt, the risks that we and they now face as a result of our indebtedness could intensify.

Restrictive covenants in the agreements governing our indebtedness may restrict our ability to pursue our business strategies.

The agreements governing our indebtedness contain a number of restrictive covenants that impose significant operating and financial restrictions on us and may limit our ability to pursue our business strategies or undertake actions that may be in our best interests. The agreements governing our indebtedness include covenants restricting, among other things, our ability to:

• incur or guarantee additional debt;

• incur liens;

• complete mergers, consolidations and dissolutions;

• sell certain of our assets that have been pledged as collateral; and

• undergo a change in control.

Our assets have been pledged to secure some of our existing indebtedness.

Our credit facility, entered into in August 2012, with Wells Fargo Bank is secured by substantially all of our property and assets and property and assets owned by LOTS Intermediate Co. and certain of our subsidiaries that act as guarantors of our existing indebtedness. Such assets include the stock of LOTS Intermediate Co. and the right, title and interest of the borrowers and each guarantor in their respective material real estate property, fixtures, accounts, equipment, investment property, inventory, instruments, general intangibles, intellectual property, money, cash or cash equivalents, software and other assets and, in each case, the proceeds thereof, subject to certain exceptions. In the event of a default under our indebtedness, the lender could foreclose against the assets securing such obligations. A foreclosure on these assets would have a material adverse effect on our business, financial condition, results of operations and cash flows.

Risks Related to Our Technology and Intellectual Property

Our information systems may fail or their security may be compromised, which could damage our business and materially and adversely affect our results of operations and financial condition.

Our business is highly dependent upon the effective operation of our information systems and our ability to store, retrieve, process and manage significant databases and expand and upgrade our information systems. We rely on these systems throughout our businesses for a variety of functions, including marketing and selling our Payment Protection products, providing our BPO services, providing eReinsure's services to the reinsurance market, managing our operations, processing claims and applications, providing information to clients, performing actuarial analyses and maintaining financial records. The interruption or loss of our information processing capabilities through the loss of stored data, programming errors, the breakdown or malfunctioning of computer equipment or software systems, telecommunications failure or damage caused by weather or natural disasters or any other significant disruptions could harm our business, ability to generate revenues, client relationships, competitive position and reputation. Although we have additional data processing locations in Jacksonville, Florida and Atlanta, Georgia, disaster recovery procedures and insurance to protect against certain contingencies, such measures may not be effective or insurance may not continue to be available at reasonable prices, cover all such losses or be sufficient to compensate us for the loss of business that may result from any failure of our information systems. In addition, our information systems may be vulnerable to physical or electronic intrusions, computer viruses or other attacks which could disable our information systems and our security measures may not prevent such attacks. The failure of our systems as a result of any security breaches, intrusions or attacks could cause significant interruptions to our operations, which could result in a material adverse effect on our business, results of operations and financial condition.

The failure to effectively maintain and modernize our systems to keep up with technological advances could materially and adversely affect our business.

Our businesses are dependent upon our ability to ensure that our information systems keep up with technological advances. Our ability to keep our systems integrated with those of our clients is critical to the success of our businesses. If we do not effectively maintain our systems and update them to address technological advancements, our relationships and ability to do business with our clients may be materially and adversely affected. Our businesses depend significantly on effective information systems, and we have many different information systems for our various businesses. We must commit significant resources to maintain and enhance existing information systems and develop new systems that allow us to keep pace with continuing changes in information processing technology, evolving industry, regulatory and legal standards and changing client preferences. A failure to maintain effective and efficient information

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systems, or a failure to efficiently and effectively consolidate our information systems and eliminate redundant or obsolete applications, could have a material adverse effect on our results of operations and financial condition or our ability to do business in particular jurisdictions. If we do not effectively maintain adequate systems, we could experience adverse consequences, including:

• the inability to effectively market and price our services and products and make underwriting and reserving decisions;

• the loss of existing clients;

• difficulty attracting new clients;

• regulatory problems, such as a failure to meet prompt payment obligations;

• internal control problems;

• exposure to litigation;

• security breaches resulting in loss of data; and

• increases in administrative expenses.

Our success will depend, in part, on our ability to protect our intellectual property rights and our ability not to infringe upon the intellectual property rights of third parties.

The success of our business will depend, in part, on preserving our trade secrets, maintaining the security of our know-how and data and operating without infringing upon patents and proprietary rights held by third parties. Failure to protect, monitor and control the use of our intellectual property rights could cause us to lose a competitive advantage and incur significant expenses. We rely on a combination of contractual provisions, confidentiality procedures and copyright, trademark, service mark and trade secret laws to protect the proprietary aspects of our brands, technology and data. These legal measures afford only limited protection, and competitors or others may gain access to our intellectual property and proprietary information.

Our trade secrets, data and know-how could be subject to unauthorized use, misappropriation, or disclosure. Our trademarks could be challenged, forcing us to re-brand our services or products, resulting in loss of brand recognition and requiring us to devote resources to advertising and marketing new brands or licensing. If we are found to have infringed upon the intellectual property rights of third parties, we may be subject to injunctive relief restricting our use of affected elements of intellectual property used in the business, or we may be required to, among other things, pay royalties or enter into licensing agreements in order to obtain the rights to use necessary technologies, which may not be possible on commercially reasonable terms, or redesign our systems, which may not be feasible.

Furthermore, litigation may be necessary to enforce our intellectual property rights, to protect our trade secrets and to determine the validity and scope of our proprietary rights. The intellectual property laws and other statutory and contractual arrangements we currently depend upon may not provide sufficient protection in the future to prevent the infringement, use or misappropriation of our trademarks, data, technology and other services and products. Policing unauthorized use of intellectual property rights can be difficult and expensive, and adequate remedies may not be available. Any future litigation, regardless of outcome, could result in substantial expense and diversion of resources with no assurance of success and could have a material adverse effect on our business, results of operation and financial condition.

Risks Related to Our Common Stock

There may not be an active, liquid trading market for our common stock.

Prior to our Initial Public Offering, there had been no public market for shares of our common stock. We cannot predict the extent to which investor interest in the Company will continue to maintain a trading market on the New York Stock Exchange ("NYSE") or how liquid that market may continue to be. If an active trading market in our common stock does not continue, you may have difficulty selling any of our common stock that you purchase.

As a public company, we are subject to additional financial and other reporting and corporate governance requirements that may be difficult for us to satisfy.

We are required to file with the SEC, annual and quarterly information and other reports that are specified in the Exchange Act. We are required to ensure that we have the ability to prepare financial statements that are fully compliant with all SEC reporting requirements on a timely basis. We are subject to other reporting and corporate governance requirements, including the requirements of the NYSE and certain provisions of the Sarbanes-Oxley Act of 2002 ("SOX") and the regulations promulgated thereunder, which impose significant compliance obligations upon us. Should we fail to comply with these rules and regulations we may face de-listing from the NYSE and face disciplinary actions from the SEC which may adversely affect our stock price.

If our internal control over financial reporting is found to be ineffective, our financial results or our stock price may be adversely affected.

As set forth in Item 9A, "Controls and Procedures," of our Annual Report on Form 10-K for the year ended December 31, 2012, our management concluded that material weaknesses existed in our internal controls over financial reporting. As set forth in Item 4 "Controls and Procedures," of this Quarterly Report on Form 10-Q, management has improved its internal controls over financial reporting and has implemented staffing enhancements.  As of March 31, 2013, management concluded that no material weaknesses in our disclosure controls over financial reporting exist.

58

In prior periods we identified material weaknesses in our internal control over financial reporting, which required management resources to be diverted to efforts to remediate these material weaknesses.

During the course of year end accounting procedures for the fiscal year ended December 31, 2012, and as discussed in Item 9A, "Controls and Procedures," of our Annual Report on Form 10-K for the year ended December 31, 2012, we identified material weaknesses relating to a) the application of generally accepted accounting principles in a timely and accurate manner in the reporting of revenue, member benefit claims, and commissions of our Motor Clubs division, and b) the support and verification of retrospective commission accrual estimates in our Payment Protection segment. A "material weakness in internal control over financial reporting" is one or more deficiencies in a process that create a reasonable possibility that a material misstatement of a company's annual or interim financial statements will not be prevented or detected in a timely manner.  The deficiency in the application of our controls relating to the timely application of accounting principles generally accepted in the United States of America ("U.S .GAAP") for revenue recognition of our Motor Clubs division on a gross basis rather than net resulted in a material misstatement of line item amounts in previously reported Consolidated Statements of Income, which have been restated herein. This material misstatement of our financial statements was not prevented or detected by us in the normal course of our financial statement close process. The deficiencies relating to retrospective commissions did not result in errors in prior period financial statements but we have determined that controls were not adequate to prevent or detect a material misstatement.

As set forth in Item 4 "Controls and Procedures," of this Quarterly Report on Form 10-Q, management has improved its internal controls over financial reporting and has implemented staffing enhancements.  As of March 31, 2013, management concluded that no material weaknesses in our disclosure controls over financial reporting exist. While we believe that the control improvement efforts we have recently instituted are adequate to correct the problems we have identified, we cannot be certain that these efforts will eliminate the material weaknesses we identified or ensure that we design, implement and maintain adequate controls over our financial processes and reporting in the future.  There is also no assurance that we will not discover additional material weaknesses in our controls and procedures in the future. 

Our principal stockholder has substantial control over us.

Affiliates of Summit Partners collectively and beneficially own approximately 62.7% of our outstanding common stock at March 31, 2013. As a consequence, Summit Partners or its affiliates continue to be able to exert a significant degree of influence or actual control over our management and affairs and matters requiring stockholder approval, including the election of directors, a merger, consolidation or sale of all or substantially all of our assets, and any other significant transaction. The interests of this stockholder may not always coincide with our interests or the interests of our other stockholders. For instance, this concentration of ownership may have the effect of delaying or preventing a change in control of us otherwise favored by our other stockholders and could depress our stock price.

We expect that our stock price will fluctuate significantly, which could cause a decline in the stock price, and holders of our common stock may not be able to resell shares at or above the cost of such shares.

Securities markets worldwide have experienced, and are likely to continue to experience, significant price and volume fluctuations. This market volatility, as well as general economic, market or political conditions, could reduce the market price of our common stock regardless of our operating performance. The trading price of our common stock may be volatile and subject to wide price fluctuations in response to various factors, including:

• market conditions in the broader stock market;

• actual or anticipated fluctuations in our quarterly financial and operating results;

• introduction of new products or services by us or our competitors;

• issuance of new or changed securities analysts' reports or recommendations;

• investor perceptions of us and the industries in which we operate;

• sales, or anticipated sales, of large blocks of our stock;

• additions or departures of key personnel;

• regulatory or political developments;

• litigation and governmental investigations; and

• changing economic conditions.

These and other factors may cause the market price and demand for our common stock to fluctuate substantially, which may limit or prevent investors from readily selling their shares of common stock and may otherwise negatively affect the liquidity of our common stock. In addition, in the past, when the market price of a stock has been volatile, holders of that stock have sometimes instituted securities class action litigation against the company that issued the stock. If any of our stockholders brought a lawsuit against us, we could incur substantial costs defending the lawsuit. Such a lawsuit could also divert the time and attention of our management from our business, which could significantly harm our results of operations and reputation.

If a substantial number of shares become available for sale and are sold in a short period of time, the market price of our common stock could decline.

At March 31, 2013, we had 20,850,531 shares of common stock issued, including shares held in treasury, with our directors, executive officers and affiliates holding a significant majority of these shares. If our stockholders sell substantial amounts of our common stock in the public market, the market price of our common stock could decrease significantly. The perception in the public market that our

59

existing stockholders might sell shares of common stock could also depress the market price of our common stock. A decline in the market price of our common stock might impede our ability to raise capital through the issuance of additional shares of our common stock or other equity securities.

If securities or industry analysts do not publish research or reports about our business, publish research or reports containing negative information about our business, adversely change their recommendations regarding our stock or if our results of operations do not meet their expectations, our stock price and trading volume could decline.

The trading market for our common stock is influenced by the research and reports that industry or securities analysts publish about us or our business. If one or more of these analysts cease coverage of our Company or fail to publish reports on us regularly, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline. Moreover, if one or more of the analysts who cover us downgrade our stock, or if our results of operations do not meet their expectations, our stock price could decline.

Some provisions of Delaware law and our amended and restated certificate of incorporation and bylaws may deter third parties from acquiring us and diminish the value of our common stock.

Our amended and restated certificate of incorporation and bylaws provide for, among other things:

• restrictions on the ability of our stockholders to call a special meeting and the business that can be conducted at such meeting;

• restrictions on the ability of our stockholders to remove a director or fill a vacancy on the Board of Directors;

• our ability to issue preferred stock with terms that the Board of Directors may determine, without stockholder approval;

• the absence of cumulative voting in the election of directors;

• a prohibition of action by written consent of stockholders unless such action is recommended by all directors then in office; and

• advance notice requirements for stockholder proposals and nominations.

These provisions in our amended and restated certificate of incorporation and bylaws may discourage, delay or prevent a transaction involving a change in control of the Company that is in the best interest of our non-controlling stockholders. Even in the absence of a takeover attempt, the existence of these provisions may adversely affect the prevailing market price of our common stock if they are viewed as discouraging future takeover attempts.

Applicable insurance laws may make it difficult to effect a change in control of us.

State insurance regulatory laws contain provisions that require advance approval, by the state insurance commissioner, of any change in control of an insurance company that is domiciled, or, in some cases, having such substantial business that it is deemed to be commercially domiciled, in that state. We own, directly or indirectly, all of the shares of stock of insurance companies domiciled in California, Delaware, Georgia, Mississippi and Louisiana, and 85% of the shares of stock of an insurance company domiciled in Kentucky. Because any purchaser of shares of our common stock representing 10% or more of the voting power of the capital stock of Fortegra generally will be presumed to have acquired control of these insurance company subsidiaries, the insurance change in control laws of California, Delaware, Georgia, Louisiana and Kentucky would apply to such a transaction.

In addition, the laws of many states contain provisions requiring pre-notification to state agencies prior to any change in control of a non-domestic insurance company subsidiary that transacts business in that state. While these pre-notification statutes do not authorize the state agency to disapprove the change in control, they do authorize issuance of cease and desist orders with respect to the non-domestic insurer if it is determined that conditions, such as undue market concentration, would result from the change in control.

These laws may discourage potential acquisition proposals and may delay, deter or prevent a change of control of the Company, including through transactions, and in particular unsolicited transactions, that some or all of our stockholders might consider to be desirable.

We do not anticipate paying any cash dividends for the foreseeable future.

We currently intend to retain our future earnings, if any, for the foreseeable future, to repay indebtedness and for general corporate purposes. We do not intend to pay any dividends for the foreseeable future to holders of our common stock. As a result, capital appreciation in the price of our common stock, if any, will be your only source of gain on an investment in our common stock.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

(a) Not Applicable

(b) Not Applicable

(c) Issuer Purchases of Equity Securities

60

Issuer Purchases of Equity Securities

As of March 31, 2013, Fortegra had a share repurchase plan which allows the Company to purchase up to $10.0 million of the Company's common stock from time to time through open market or private transactions. The plan was approved by the Board of Directors in November 2011 and provides for shares to be repurchased for general corporate purposes, which may include serving as a resource for funding potential acquisitions and employee benefit plans. The timing, price and quantity of purchases are at our discretion, and the plan may be discontinued or suspended at any time. The following table shows Fortegra's share repurchase plan activity for the three months ended March 31, 2013:

Period			Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares  Purchased as Part of Publicly Announced Plan	Maximum  Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plan
						—	$	3,524,376
January 1, 2013	to	January 31, 2013	—	$	—	—	3,524,376
February 1, 2013	to	February 28, 2013	—	—		—	3,524,376
March 1, 2013	to	March 31, 2013	—	—		—	3,524,376
Total			—	$	—	—

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

See the Exhibit Index following the signature page of this Form 10-Q for a list of exhibits filed with, furnished with or incorporated

by reference into this Form 10-Q, which Exhibit Index is incorporated herein by reference.

SIGNATURES

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, thereunto duly authorized.

			Fortegra Financial Corporation
Date:	May 15, 2013	By:	/s/ Richard S. Kahlbaugh
			Richard S. Kahlbaugh
			Chairman, President and Chief Executive Officer
Date:	May 15, 2013	By:	/s/ Walter P. Mascherin
			Walter P. Mascherin
			Executive Vice President and Chief Financial Officer

61

EXHIBIT INDEX

		Incorporated by Reference
Exhibit Number	Description of Exhibits	Form	File Number	Date Filed	Original Exhibit Number	Filed Herewith	Furnished Herewith
1.1	Form of Underwriting Agreement.	S-1/A	333-169550	11/29/2010	1.1
2.1	Agreement and Plan of Merger, dated as of March 7, 2007, by and among, Summit Partners Private Equity Fund VII-A, L.P., Summit Partners Private Equity Fund VII-B, L.P., Summit Subordinated Debt Fund III-A, L.P., Summit Subordinated Debt Fund III-B, L.P., Summit Investors VI, L.P., LOS Acquisition Co., the Signing Stockholders and Life of the South Corporation and N.G. Houston III, as Stockholder Representative.	S-1	333-169550	9/23/2010	2.1
2.2	First Amendment to Merger Agreement, dated as of June 20, 2007 by and among Summit Partners Private Equity Fund VII-A, L.P., Summit Partners Private Equity Fund VII-B, L.P., Summit Subordinated Debt Fund III-A, L.P., Summit Subordinated Debt Fund III-B, L.P., Summit Investors VI, L.P., LOS Acquisition Co., the Signing Stockholders, and Life of the South Corporation and N.G. Houston, III, as Stockholder Representative.	S-1	333-169550	9/23/2010	2.2
2.3	Stock Purchase Agreement, dated as of April 15, 2009, by and among Willis HRH, Inc., Bliss and Glennon, Inc., LOTS Intermediate Co., Willis North America Inc. and Fortegra Financial Corporation.	S-1	333-169550	9/23/2010	2.3
2.4	Agreement and Plan of Merger, dated March 3, 2011 by and among eReinsure.com, Inc., a Delaware corporation, Alpine Acquisition Sub., Inc., a Delaware corporation, and Century Capital Partners III, L.P., as Agent solely for the purposes of Section 10.02, and LOTS Intermediate Co., a Delaware corporation.	8-K	001-35009	3/7/2011	2.1
3.1	Third Amended and Restated Certificate of Incorporation of Fortegra Financial Corporation.	S-1/A	333-169550	12/13/2010	3.3
3.3	Amended and Restated Bylaws of Fortegra Financial Corporation.	S-1/A	333-169550	11/29/2010	3.4
4.1	Form of Common Stock Certificate.	S-1/A	333-169550	12/13/2010	4.1
4.2	Stockholders Agreement, dated as of March 7, 2007, among Life of the South Corporation(together with its successors), the Rollover Stockholders (as defined therein), Employee Stockholders (as defined therein) and Investors (as defined therein).	S-1/A	333-169550	10/29/2010	4.2
10.1	Indenture, dated as of June 20, 2007, between LOTS Intermediate Co. and Wilmington Trust Company.	S-1	333-169550	9/23/2010	10.1
10.2	Form of Fixed/Floating Rate Senior Debenture (included in Exhibit 10.1).	S-1	333-169550	9/23/2010	10.2
10.3	Subordinated Debenture Purchase Agreement, dated as of June 20, 2007, among Summit Subordinated Debt Fund III-A, L.P., Summit Subordinated Debt Fund III-B, L.P., Summit Investors VI, L.P. and LOTS Intermediate Co.	S-1	333-169550	9/23/2010	10.3
10.4	Form of Subordinated Debenture (included in Exhibit 10.3).	S-1	333-169550	9/23/2010	10.4
10.5	Amendment, dated June 16, 2010, to the Subordinated Debenture Purchase Agreement dated June 20, 2007, among Summit Subordinated Debt Fund III-A, L.P., Summit Subordinated Debt Fund III-B, L.P., Summit Investors VI, L.P. and LOTS Intermediate Co.	S-1	333-169550	9/23/2010	10.5

62

		Incorporated by Reference
Exhibit Number	Description of Exhibits	Form	File Number	Date Filed	Original Exhibit Number	Filed Herewith	Furnished Herewith
10.6	Revolving Credit Agreement, dated June 16, 2010, among Fortegra Financial Corporation and LOTS Intermediate Co., as Borrowers, and the Lenders from time to time a party thereto and SunTrust Bank, as Administrative Agent.	S-1	333-169550	9/23/2010	10.6
10.6.1	First Amendment to Credit Agreement, dated as of October 6, 2010, by and among Fortegra Financial Corporation and LOTS Intermediate Co., as Borrowers, and the Lenders from time to time a party thereto and SunTrust Bank, as Administrative Agent.	S-1/A	333-169550	10/29/2010	10.6.1
10.6.2	Joinder Agreement, dated November 30, 2010, by CB&T, a division of Synovus Bank, as a New Lender, SunTrust Bank, as Administrative Agent and Fortegra Financial Corporation and LOTS Intermediate Co., as Borrowers.	S-1/A	333-169550	12/13/2010	10.6.2
10.6.3	Joinder Agreement, dated March 1, 2011, by Wells Fargo Bank, N.A., as a New Lender, SunTrust Bank, as Administrative Agent and Fortegra Financial Corporation and LOTS Intermediate Co., as Borrowers.	8-K	001-35009	3/7/2011	10.1
10.7	Revolving Credit Note, dated June 16, 2010, among Fortegra Financial Corporation and LOTS Intermediate Co., as Borrowers, and SunTrust Bank, as Lender.	S-1	333-169550	9/23/2010	10.7
10.8	Subsidiary Guaranty Agreement, dated June 16, 2010, among Bliss and Glennon, Inc., and LOTSolutions, Inc., as Guarantors and SunTrust Bank, as Administrative Agent.	S-1	333-169550	9/23/2010	10.8
10.9	Security Agreement, dated June 16, 2010, by Fortegra Financial Corporation, LOTS Intermediate Co., Bliss and Glennon, Inc. and LOTSolutions, Inc., as Grantors and SunTrust Bank, as Administrative agent.	S-1	333-169550	9/23/2010	10.9
10.10	Pledge Agreement, dated June 16, 2010 by and among Fortegra Financial Corporation, as Pledgor and SunTrust Bank, as Administrative Agent.	S-1	333-169550	9/23/2010	10.10
10.11	Form of Fortegra Financial Corporation Director Indemnification Agreement for John R. Carroll and J.J. Kardwell.	S-1/A	333-169550	11/29/2010	10.18
10.12	Form of Fortegra Financial Corporation Director Indemnification Agreement for Francis M. Colalucci, Frank P. Filipps, Arun Maheshwari, Ted W. Rollins and Sean S. Sweeney.	S-1/A	333-169550	11/29/2010	10.19
10.13	Form of Fortegra Financial Corporation Officer Indemnification Agreement.	S-1/A	333-169550	12/3/2010	10.20
10.14	Form of Indemnity Agreement between Fortegra Financial Corporation, as Indemnitor, and the executive officers serving as plan committee members for the Fortegra Financial Corporation 401(k) Savings Plan, as Indemnitees.	S-1/A	333-169550	10/29/2010	10.21
10.15 *	Executive Employment and Non-Competition Agreement, dated as of March 7, 2007, by and between Life of the South Corporation and Richard S. Kahlbaugh.	S-1/A	333-169550	12/3/2010	10.22
10.15.1*	Amendment No. 1 to Executive Employment and Non-Competition Agreement, dated as of November 1, 2010, by and between Fortegra Financial Corporation and Richard S. Kahlbaugh.	S-1/A	333-169550	12/3/2010	10.22.1
10.16 *	Executive Employment and Non-Competition Agreement, dated as of October 1, 2010, by and between Fortegra Financial Corporation and Walter P. Mascherin.	S-1/A	333-169550	12/3/2010	10.27
10.17 *	Life of the South Corporation 2005 Equity Incentive Plan.	S-1/A	333-169550	10/29/2010	10.28

63

		Incorporated by Reference
Exhibit Number	Description of Exhibits	Form	File Number	Date Filed	Original Exhibit Number	Filed Herewith	Furnished Herewith
10.18 *	1995 Key Employee Stock Option Plan.	S-1/A	333-169550	10/29/2010	10.29
10.19	Stock Option Agreement by and between Life of the South Corporation and Richard S. Kahlbaugh, dated as of November 18, 2005, as amended on March 7, 2007 and June 20, 2007.	S-1/A	333-169550	11/16/2010	10.30
10.20	Stock Option Agreement by and between Life of the South Corporation and Richard Kahlbaugh, dated as of October 25, 2007.	S-1/A	333-169550	11/16/2010	10.31
10.21 *	2010 Omnibus Incentive Plan.	S-1/A	333-169550	12/3/2010	10.32
10.22 *	Employee Stock Purchase Plan.	S-1/A	333-169550	12/3/2010	10.33
10.23 *	Deferred Compensation Agreement, dated January 1, 2006, between Life of the South Corporation and Richard S. Kahlbaugh.	S-1/A	333-169550	10/29/2010	10.35
10.24	Administrative Services Agreement, dated August 1, 2002, by and between Life of the South Insurance Company and National Union Fire Insurance Company of Pittsburgh, PA., as amended on February 1, 2003, October 1, 2003, and August 1, 2008. (CONFIDENTIAL TREATMENT HAS BEEN GRANTED WITH RESPECT TO CERTAIN PORTIONS, WHICH HAVE BEEN FILED SEPERATELY WITH THE SECURTIES AND EXHANGE COMMISSION)	S-1/A	333-169550	11/16/2010	10.37
10.24.1	Amendment No. 4, dated January 31, 2012, to the Administrative Services Agreement, dated August 1, 2002, by and between Life of the South Insurance Company and National Union Fire Insurance Company of Pittsburgh, PA., as amended on February 1, 2003, October 1, 2003 and August 1, 2008.	10-K	001-35009	4/1/2013	10.24.1
10.24.2	Amendment No. 5, dated February 1, 2012, to the Administrative Services Agreement, dated August 1, 2002, by and between Life of the South Insurance Company and National Union Fire Insurance Company of Pittsburgh, PA., as amended on February 1, 2003, October 1, 2003, August 1, 2008, and January 31, 2012.	10-K	001-35009	4/1/2013	10.24.2
10.25	Claims Services Agreement, dated December 1, 2008, by and between LOTSolutions, Inc. and National Union Fire Insurance Company of Pittsburgh, PA., as amended on August 1, 2010. (CONFIDENTIAL TREATMENT HAS BEEN GRANTED WITH RESPECT TO CERTAIN PORTIONS, WHICH HAVE BEEN FILED SEPERATELY WITH THE SECURTIES AND EXHANGE COMMISSION)	S-1/A	333-169550	11/16/2010	10.38
10.25.1	Amendment No. 2, dated January 1, 2012, to the Claims Services Agreement, dated December 1, 2008, by and between LOTSolutions, Inc. and National Union Fire Insurance Company of Pittsburgh, PA., as amended on August 1, 2010.	10-K	001-35009	4/1/2013	10.25.1
10.26 *	Form of Restricted Stock Award Agreement for Directors.	S-1/A	333-169550	12/3/2010	10.47
10.26.1 *	Amended - Form of Restricted Stock Award Agreement for Directors.	10-K	001-35009	4/1/2013	10.26.1
10.27 *	Form of Restricted Stock Award Agreement for Employees.	S-1/A	333-169550	12/3/2010	10.48
10.27.1*	Amended - Form of Restricted Stock Award Agreement for Employees.					X
10.28 *	Form of Restricted Stock Award Agreement (Bonus Pool).	S-1/A	333-169550	12/3/2010	10.49
10.29 *	Form of Nonqualified Stock Option Award Agreement.	S-1/A	333-169550	12/3/2010	10.50

64

		Incorporated by Reference
Exhibit Number	Description of Exhibits	Form	File Number	Date Filed	Original Exhibit Number	Filed Herewith	Furnished Herewith
10.29.1*	Amended - Form of Nonqualified Stock Option Award Agreement.					X
10.30 *	Form of Nonqualified Stock Option Award Agreement for Walter P. Mascherin.	S-1/A	333-169550	12/3/2010	10.51
10.31*	Executive Employment and Non-Competition Agreement, dated as of January 1, 2011, by and between Fortegra Financial Corporation and Alex Halikias.	10-Q	001-35009	5/15/2012	10.38
10.32 *	Executive Employment and Non-Competition Agreement, dated as of January 1, 2009, by and between Fortegra Financial Corporation and Joseph McCaw.	10-Q	001-35009	5/15/2012	10.39
10.33 *	Executive Employment and Non-Competition Agreement, dated as of October 1, 2010, by and between Fortegra Financial Corporation and John G. Short.	10-Q	001-35009	5/15/2012	10.40
10.34	Credit Agreement, dated August 2, 2012, among Fortegra Financial Corporation and LOTS Intermediate Co., as Borrowers; the initial Lenders named therein; Wells Fargo Bank, N.A., as Administrative Agent, Swingline Lender, and Issuing Lender; Wells Fargo Securities, LLC, as Bookrunner and Joint Lead Arranger; and Synovus Bank as Joint Lead Arranger and Syndication Agent.	8-K	001-35009	8/7/2012	10.1
10.35	Subsidiary Guaranty Agreement, dated August 2, 2012, among certain subsidiaries, as Guarantors, of Fortegra Financial Corporation and LOTS Intermediate Co., as Borrowers, and Wells Fargo Bank, N.A., as Administrative Agent, and each of the Guaranteed Parties.	8-K	001-35009	8/7/2012	10.2
10.36	Pledge Agreement, dated August 2, 2012, by Fortegra Financial Corporation and LOTSoluntions, Inc., as Pledgors, and Wells Fargo Bank, N.A., as Administrative Agent for its benefit and the benefit of other Lenders.	8-K	001-35009	8/7/2012	10.3
10.37	Security Agreement, dated August 2, 2012, among Fortegra Financial Corporation, LOTS Intermediate Co. and certain of its subsidiaries, as Grantors, and Wells Fargo Bank, N.A., as Administrative Agent for its benefit and the benefit of the Secured Creditors.	8-K	001-35009	8/7/2012	10.4
10.38	Trademark Security Agreement, dated August 2, 2012, among the Fortegra Financial Corporation, LOTSolutions, Inc., Pacific Benefits Group Northwest, L.L.C., eReinsure.com, Inc., as Grantors, and Wells Fargo Bank, N.A., as Administrative Agent and Grantee, for the benefit of the Secured Creditors.	8-K	001-35009	8/7/2012	10.5
10.39	Patent Security Agreement, dated August 2, 2012, by eReinsure.com, Inc., as Grantor, and Wells Fargo Bank, N.A., as Administrative Agent and Grantee, for the benefit of the Secured Creditors.	8-K	001-35009	8/7/2012	10.6
10.40*	Executive Employment and Non-Competition Agreement, dated as of January 1, 2011, by and between Fortegra Financial Corporation and Igor Best-Devereux.	10-K	001-35009	4/1/2013	10.40	X
11.1	Statement Regarding Computation of Per Share Earnings (incorporated by reference to Notes to Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q).
31.1	Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.					X
31.2	Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.					X

65

		Incorporated by Reference
Exhibit Number	Description of Exhibits	Form	File Number	Date Filed	Original Exhibit Number	Filed Herewith	Furnished Herewith
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.						X
32.1	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.						X
101	The following materials from Fortegra Financial Corporation's Quarterly Report on Form 10-Q for the quarter ended March 31, 2013, formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Balance Sheets (Unaudited) at March 31, 2013 and December 31, 2012, (ii) the Consolidated Statements of Income (Unaudited) for the three months ended March 31, 2013 and 2012, (iii) the Consolidated Statements of Comprehensive Income (Unaudited) for the three months ended March 31, 2013 and 2012, (iv) the Consolidated Statements of Stockholders' Equity (Unaudited) for the three month ended March 31, 2013 , (v) the Consolidated Statements of Cash Flows (Unaudited) for the three months ended March 31, 2013 and 2012, and (vi) the Notes to Consolidated Financial Statements(Unaudited).						(1)
*	Management contract or compensatory plan or arrangement.
(1)	In accordance with Rule 406T of SEC Regulation S-T, the XBRL related documents in Exhibit 101 to this Quarterly Report on Form 10-Q for the Quarterly period ended March 31, 2013, are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under these Sections.

66

EX-10.27.1

Exhibit 10.27.1

To be Effective for Grants Made After 2/18/2013

Fortegra Financial Corporation
2010 Omnibus Incentive Plan

RESTRICTED STOCK AWARD AGREEMENT

THIS RESTRICTED STOCK AWARD AGREEMENT (this “Agreement”) is made effective as of the grant date designated in Schedule A hereto (the “Grant Date”) by and between Fortegra Financial Corporation, a Delaware corporation (with any successor, the “Company”), and the participant designated in Schedule A hereto (the “Participant”).

R E C I T A L S:

WHEREAS, the Company has adopted the Fortegra Financial Corporation 2010 Omnibus Incentive Plan (the “Plan”), which Plan is incorporated herein by reference and made a part of this Agreement. Capitalized terms not otherwise defined herein shall have the same meanings as in the Plan; and

WHEREAS, the Committee has determined that it would be in the best interests of the Company and its stockholders to grant the restricted stock provided for herein to the Participant pursuant to the Plan and the terms set forth herein.

NOW THEREFORE, in consideration of the mutual covenants hereinafter set forth, the parties agree as follows:

1.Restricted Stock Award. Subject to the terms and conditions of the Plan and this Agreement, the Company hereby grants to the Participant the number of Shares designated in Schedule A hereto (the “Restricted Shares”), which shall vest and become nonforfeitable in accordance with Section 3 except as otherwise set forth in this Agreement or the Plan.

2.Certificates. Certificates representing the Restricted Shares shall be issued by the Company and shall be registered in the name of the Participant on the stock transfer books of the Company promptly following execution of this Agreement by the Participant, but shall remain in the physical custody of the Company or its designee at all times prior to the vesting of such Restricted Shares pursuant to Section 3. As a condition to the receipt of this Agreement, the Participant shall deliver to the Company a stock power, duly endorsed in blank, relating to the Restricted Shares.

3.Vesting Schedule. Subject to the Participant’s continued Service on each vesting date and except as otherwise provided in Sections 4 and 5, the Restricted Shares shall vest in accordance with the vesting terms set forth in Schedule A; provided, however, that if the Participant’s Service is terminated due to the Participant’s retirement from the Company or any Subsidiary or Affiliate and the Participant has provided at least ten (10) calendar years of Service as of the date of such retirement (a “Qualifying Retirement”), then the Restricted Shares shall continue to vest during the Participant’s retirement in accordance with the vesting terms set forth in Schedule A, subject to Section 5.

4.Accelerated Vesting Upon a Change of Control. Notwithstanding anything to the contrary in Section 3, if within the one (1) year period following a Change of Control, the Participant’s Service is terminated by the Company or any Subsidiary or Affiliate without Cause or by the Participant with Good Reason, any unvested Restricted Shares shall immediately and fully vest as of the date of such termination of the Participant’s Service.

5.Forfeiture; Recovery Due to Accounting Restatement.

(a)Subject to Section 4, if the Participant’s Service is terminated for any reason other than a Qualifying Retirement, then the Restricted Shares, to the extent not then vested, shall be forfeited by the Participant without consideration.

(b)If the Participant’s Service is terminated due to a Qualifying Retirement and either (i) the Participant thereafter dies, or (ii) the Board or the Committee thereafter determines that the Participant has violated any restrictive covenant in the Plan, any Award Agreement or any employment, severance, consulting or other agreement with the Company to which the Participant is subject, then the Restricted Shares, to the extent not vested as of the date of such death or violation, shall be forfeited by the Participant without consideration.

(c)Notwithstanding Sections 1, 3, 4, 5(a) and 5(b), if the Board or the Committee determines that the recovery of some or all of the compensation paid or payable to the Participant pursuant to this Agreement is required under any applicable law, regulation or listing requirement, or any policy of the Company concerning the recovery of compensation as a result of an accounting restatement due to the Company’s material noncompliance with any financial reporting requirement under the securities laws, then to the extent provided by, and in accordance with, the terms of such law, regulation, listing requirement or policy: (i) the Restricted Shares, or any portion thereof, including any vested Restricted Shares, shall be immediately forfeited by the Participant without consideration; and (ii) the Company shall have the right to recover from the Participant all Restricted Shares credited or delivered to the Participant, and if the Participant has transferred any Restricted Shares, the Company shall have the right to recover the Fair Market Value of such transferred Restricted Shares (as of the date on which such Restricted Shares were transferred) from the Participant in cash.

6.No Right to Continued Service. The granting of the Restricted Shares evidenced hereby and this Agreement shall impose no obligation on the Company or any Affiliate to continue the Service of the Participant and shall not lessen or affect any right that the Company or any Affiliate may have to terminate the Service of such Participant.

7.Securities Laws/Legend on Certificates. The issuance and delivery of Restricted Shares shall comply with all applicable requirements of law, including (without limitation) the Securities Act of 1933, as amended, the rules and regulations promulgated thereunder, state securities laws and regulations, and the regulations of any stock exchange or other securities market on which the Company’s securities may then be traded. If the Company deems it necessary to ensure that the issuance of securities under the Plan is not required to be registered under any applicable securities laws, each Participant to whom such security would be issued shall deliver to the Company an agreement or certificate containing such representations, warranties and covenants as the Company which satisfies such requirements. The certificates representing the Restricted Shares shall be subject to such stop transfer orders and other restrictions as the Committee may deem reasonably advisable, and the Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions.

8.Transferability. Prior to vesting in accordance with Section 3, the Restricted Shares may not be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by the Participant other than by will or by the laws of descent and distribution, and any such purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable against the Company or any Affiliate; provided that the designation of a beneficiary shall not constitute an assignment, alienation, pledge, attachment, sale, transfer or encumbrance. Restricted Shares transferred by will or by the laws of descent and distribution shall continue to be subject to the terms and conditions of this Agreement, and no such permitted transfer of the Restricted Shares to heirs or legatees of the

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Participant shall be effective to bind the Company unless the Committee shall have been furnished with written notice thereof and a copy of such evidence as the Committee may deem necessary to establish the validity of the transfer and the acceptance by the transferee or transferees of the terms and conditions hereof.

9.Definitions.

(a)“Cause” shall have the meaning set forth in the Participant’s employment agreement with the Company or its Affiliates, if any, or if the Participant is not a party to an employment agreement with a definition of “Cause”, then “Cause” means that the Board has determined that any one or more of the following has occurred: (i) the Participant shall have been indicted for, or shall have pleaded guilty or nolo contendere to, any felony; (ii) the Participant shall have failed or refused to carry out the reasonable and lawful instructions of Chief Executive Officer of the Company, the executive to whom the Participant reports, or the Board (other than as a result of illness or disability) concerning duties or actions consistent with the Participant’s position and such failure or refusal shall have continued for a period of ten (10) days following written notice from the Board; (iii) the Participant shall fail to adhere to any material written Company policy; (iv) the Participant shall have engaged in any gross or willful misconduct resulting in a substantial loss to the Company or any of its Affiliates or substantial damage to any of their reputations; or (v) the Participant shall have committed any fraud, embezzlement, misappropriation of funds, breach of fiduciary duty or other act of dishonesty against the Company.

“Good Reason” shall have the meaning set forth in the Participant’s employment agreement with the Company, if any, or if the Participant is not a party to an employment agreement with a definition of “Good Reason”, then “Good Reason” shall mean, without the Participant’s prior written consent, (A) any material reduction in the Participant’s base salary; (B) any material diminution in the Participant’s position, duties or responsibilities; or (C) a relocation of the Participant’s principal office to a location more than 50 miles from its current location; provided that, no finding of Good Reason shall be effective unless and until the Participant has provided the Company, within sixty (60) calendar days of the occurrence of the facts and circumstances underlying the finding of Good Reason, written notice stating with specificity the facts and circumstances underlying the finding of Good Reason, and, if the basis for such finding of Good Reason is capable of being cured by the Company, providing the Company with an opportunity to cure the same within thirty (30) calendar days after receipt of such notice.

10.Adjustment of Restricted Shares. Adjustments to the Restricted Shares shall be made in accordance with the terms of the Plan.

11.Withholding. The Participant may be required to pay to the Company or any Affiliate and the Company shall have the right and is hereby authorized to withhold, any applicable withholding taxes in respect of the Restricted Shares, their grant, vesting or otherwise and to take such other action as may be necessary in the opinion of the Committee to satisfy all obligations for the payment of such withholding taxes.

12.Notices. Any notification required by the terms of this Agreement shall be given in writing and shall be deemed effective upon personal delivery or within three (3) days of deposit with the United States Postal Service, by registered or certified mail, with postage and fees prepaid. A notice shall be addressed to the Company, Attention: General Counsel, at its principal executive office and to the Participant at the address that he or she most recently provided to the Company.

13.Entire Agreement. This Agreement and the Plan constitute the entire contract between the parties hereto with regard to the subject matter hereof. They supersede any other agreements,

representations or understandings (whether oral or written and whether express or implied) which relate to the subject matter hereof.

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14.Waiver. No waiver of any breach or condition of this Agreement shall be deemed to be a waiver of any other or subsequent breach or condition whether of like or different nature.

15.Successors and Assigns. The provisions of this Agreement shall inure to the benefit of, and be binding upon, the Company and its successors and assigns and upon the Participant, the Participant’s assigns and the legal representatives, heirs and legatees of the Participant’s estate, whether or not any such person shall have become a party to this Agreement and agreed in writing to be joined herein and be bound by the terms hereof.

16.Choice of Law; Jurisdiction; Waiver of Jury Trial. This Agreement shall be governed by the laws of the State of Delaware, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of the Plan to the substantive law of another jurisdiction.

SUBJECT TO THE TERMS OF THIS AGREEMENT, THE PARTIES AGREE THAT ANY AND ALL ACTIONS ARISING UNDER OR IN RESPECT OF THIS AGREEMENT SHALL BE LITIGATED IN THE FEDERAL OR STATE COURTS IN NEW YORK. BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH PARTY IRREVOCABLY SUBMITS TO THE PERSONAL JURISDICTION OF SUCH COURTS FOR ITSELF, HIMSELF OR HERSELF AND IN RESPECT OF ITS, HIS OR HER PROPERTY WITH RESPECT TO SUCH ACTION. EACH PARTY AGREES THAT VENUE WOULD BE PROPER IN ANY OF SUCH COURTS, AND HEREBY WAIVES ANY OBJECTION THAT ANY SUCH COURT IS AN IMPROPER OR INCONVENIENT FORUM FOR THE RESOLUTION OF ANY SUCH ACTION.

EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT.

17.Restricted Shares Subject to Plan. By entering into this Agreement the Participant agrees and acknowledges that the Participant has received and read a copy of the Plan. The Restricted Shares are subject to the Plan. The terms and provisions of the Plan as it may be amended from time to time are hereby incorporated herein by reference (subject to the limitation set forth in Section 16). In the event of a conflict between any term or provision contained herein and a term or provision of the Plan, the applicable terms and provisions of the Plan will govern and prevail. The Participant has had the opportunity to retain counsel, and has read carefully, and understands, the provisions of the Plan and the Agreement.

18.Amendment. The Committee may amend or alter this Agreement and the Restricted Shares granted hereunder at any time; provided that, subject to Articles 11, 12 and 13 of the Plan, no such amendment or alteration shall be made without the consent of the Participant if such action would materially diminish any of the rights of the Participant under this Agreement or with respect to the Restricted Shares.

19.Section 83(b) Election. In the event the Participant determines to make an election with the Internal Revenue Service (the “IRS”) under Section 83(b) of the Code and the regulations promulgated thereunder (the “83(b) Election”), the Participant shall provide a copy of such form to the Company promptly following its filing, which is required under current law to be filed with

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the IRS no later than thirty (30) days after the Grant Date of the Restricted Shares. The Participant is advised to consult with his or her own tax advisors regarding the purchase and holding of the Restricted Shares, and the Company shall bear no liability for any consequence of the Participant making an 83(b) Election or failing to make an 83(b) Election.

20.Severability. The provisions of this Agreement are severable and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.

21.Signature in Counterparts/Electronic Signature. This Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement may be signed electronically with the same force and effect as if signed manually.

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IN WITNESS WHEREOF, the parties hereto have executed this Restricted Stock Award Agreement as of the Grant Date set forth in Schedule A.

FORTEGRA FINANCIAL CORPORATION, a Delaware corporation

By:

Name:

Title:

Acknowledged and agreed to by Participant as

of the Grant Date set forth on Schedule A:

Print Name:

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Schedule A

Grant Date:        __ / __ / ____

Participant:        ______

Participant ID:        _____

Plan:            Fortegra Financial Corporation 2010 Omnibus Incentive Plan

Number of Restricted Shares:    ______

Vesting:        

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EX-10.29.1

Exhibit 10.29.1

To be Effective for Grants Made After 2/18/2013

Fortegra Financial Corporation
2010 Omnibus Incentive Plan

NONQUALIFIED STOCK OPTION AWARD AGREEMENT

THIS NONQUALIFIED STOCK OPTION AWARD AGREEMENT (this “Award Agreement”) is made effective as of the grant date designated in Schedule A hereto (the “Grant Date”), by and between Fortegra Financial Corporation, a Delaware corporation (with any successor, the “Company”), and the participant designated in Schedule A (the “Participant”).

R E C I T A L S:

WHEREAS, the Company has adopted the Fortegra Financial Corporation 2010 Omnibus Incentive Plan (the “Plan”), which Plan is incorporated herein by reference and made a part of this Award Agreement. Capitalized terms not otherwise defined herein shall have the same meanings as in the Plan; and

WHEREAS, the Committee has determined that it would be in the best interests of the Company and its stockholders to grant the option provided for herein to the Participant pursuant to the Plan and the terms set forth herein.

NOW THEREFORE, in consideration of the mutual covenants hereinafter set forth, the parties agree as follows:

1.Grant of the Option. The Company hereby grants to the Participant the right and option (the “Option”) to purchase, on the terms and conditions hereinafter set forth, all or any part of an aggregate number of Shares designated in Schedule A. The Option is intended to be a Nonqualified Stock Option.

2.Option Price. The per Share purchase price of the Shares subject to the Option shall be the amount designated in Schedule A (the “Option Price”).

3.Option Term. The term of the Option shall be ten (10) years, commencing on the Grant Date (the “Option Term”). The Option shall automatically terminate upon the expiration of the Option Term, or at such earlier time specified herein or in the Plan.

4.Vesting. Subject to the Participant’s continued Service on each vesting date and except as otherwise provided in Sections 5 and 6, the Option shall vest as set forth in Schedule A; provided, however, that if the Participant’s Service is terminated due to the Participant’s retirement from the Company or any Subsidiary or Affiliate and the Participant has provided at least ten (10) calendar years of Service as of the date of such retirement (a “Qualifying Retirement”), then the Option shall continue to vest during the Participant’s retirement in accordance with Schedule A, subject to Section 6. At any time, the portion of the Option which has become vested as described in this Section 4 is hereinafter referred to as the “Vested Portion”. The Vested Portion of the Option shall remain exercisable for the period set forth in Section 7.

5.Accelerated Vesting Upon a Change of Control. Notwithstanding anything to the contrary in Section 4, if within the one (1) year period following a Change of Control, the Participant’s Service is terminated by the Company or any Subsidiary or Affiliate without Cause or by the Participant with Good Reason, the Option shall immediately and fully vest as of the date of such termination of the Participant’s Service.

6.Forfeiture; Recovery Due to Accounting Restatement.

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(a)Subject to Section 5, if the Participant’s Service is terminated for any reason other than a Qualifying Retirement, the Option, to the extent not then vested, shall be cancelled by the Company without consideration and the Vested Portion of the Option shall remain exercisable for the period set forth in Section 7.

(b)If the Participant’s Service is terminated due to a Qualifying Retirement and either (i) the Participant thereafter dies, or (ii) the Board or the Committee thereafter determines that the Participant has violated any restrictive covenant in the Plan, any Award Agreement or any employment, severance, consulting, or other agreement with the Company to which the Participant is subject, then the Option, to the extent not vested as of the date of such death or violation, shall be cancelled by the Company without consideration and the Vested Portion of the Option shall remain exercisable for the period set forth in Section 7.

(c)Notwithstanding Sections 4, 5, 6(a) and 6(b), if the Board or the Committee determines that the recovery of some or all of the compensation paid or payable to the Participant pursuant to this Award Agreement is required under any applicable law, regulation or listing requirement, or any policy of the Company concerning the recovery of compensation as a result of an accounting restatement due to the Company’s material noncompliance with any financial reporting requirement under the securities laws, then to the extent provided by, and in accordance with, the terms of such law, regulation, listing requirement or policy: (a) the Option, or any portion thereof, including any Vested Portion of the Option, shall be immediately terminated, cancelled and unexercisable; and (b) the Company shall have the right to recover from the Participant all Shares delivered to the Participant as a result of exercising the Option, or any portion thereof, and if the Participant has transferred such Shares, the Company shall have the right to recover the Fair Market Value of such transferred Shares (as of the date on which such Shares were transferred) from the Participant in cash; provided, however, that the Company shall return to the Participant the Option Price paid by the Participant for each Share that is either recovered by the Company or for which the Company recovers the Fair Market Value (as of the date on which such Shares were transferred) from the Participant in cash.

7.Exercise of Option.

(a)Period of Exercise. Subject to the provisions of the Plan and this Award Agreement, the Participant may exercise all or any part of the Vested Portion of the Option at any time prior to the earliest to occur of:

(i)the tenth (10th) anniversary of the Grant Date;

(ii)the date that is ninety (90) days following termination of the Participant’s Service for any reason other than death, Disability, the Participant’s Qualifying Retirement or for Cause;

(iii)the date that is one (1) year following termination of the Participant’s Service due to death or Disability;

(iv)if the Participant’s Service is terminated due to the Participant’s Qualifying Retirement, then the date that is either: (A) one (1) year following the date of the Participant’s Qualifying Retirement if the Vested Portion of the Option that Participant desires to exercise vested before the Participant’s Qualifying Retirement, or (B) one (1) year following the vesting date of the Vested Portion of the Optionthat Participant desires to exercise if such Vested Portion vested after the Participant’s Qualifying Retirement; provided, however, that for both (A) and (B)

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above, if the Participant dies during the applicable one (1) year exercise period, then the deadline to exercise such Vested Portion of the Option will be extended by one (1) year from the date of death; or

(v)the date of termination of the Participant’s Service due to Cause.

(b)Method of Exercise.

(i)The Vested Portion of the Option may be exercised by delivering to the Company at its principal office written notice of intent to so exercise; provided that, the Option may be exercised with respect to whole Shares only. Such notice shall specify the number of Shares for which the Option is being exercised and shall be accompanied by payment in full of the Option Price. In the event the Option is being exercised by the Participant’s representative, the notice shall be accompanied by proof (satisfactory to the Committee) of the representative’s right to exercise the Option. The payment of the Option Price may be made at the election of the Participant (A) in cash or its equivalent (e.g., by check), (B) to the extent permitted by the Committee, in Shares having a Fair Market Value equal to the aggregate Option Price for the Shares being purchased and satisfying such other requirements as may be imposed by the Committee, (C) partly in cash and, to the extent permitted by the Committee, partly in such Shares, (D) by reducing the number of Shares otherwise deliverable upon the exercise of the Option by the number of Shares having a Fair Market Value equal to the Option Price, or (E) if there is a public market for the Shares at such time, subject to such requirements as may be imposed by the Committee, through the delivery of irrevocable instructions to a broker to sell Shares obtained upon the exercise of the Option and to deliver promptly to the Company an amount out of the proceeds of such sale equal to the aggregate Option Price for the Shares being purchased. The Committee may prescribe any other method of payment that it determines to be consistent with applicable law. Neither the Participant nor the Participant’s representative shall have any rights to dividends or other rights of a stockholder with respect to Shares subject to an Option until the Participant has given written notice of exercise of the Option, paid in full for such Shares and, if applicable, has satisfied any other conditions imposed by the Committee pursuant to the Plan.

(ii)Notwithstanding any other provision of the Plan or this Award Agreement to the contrary, the Option may not be exercised prior to the completion of any registration or qualification of the Option or the Shares under applicable securities or other laws, or under any ruling or regulation of any governmental body or national securities exchange that the Committee shall in its sole discretion determine to be necessary or advisable.

(iii)Upon the Company’s determination that the Option has been validly exercised as to any of the Shares, the Company shall issue certificates in the Participant’s name for such Shares. However, the Company shall not be liable to the Participant for damages relating to any delays in issuing the certificates to him, any loss of the certificates, or any mistakes or errors in the issuance of the certificates or in the certificates themselves.

(iv)In the event of the Participant’s death, the Vested Portion of the Option shall remain exercisable during the period set forth in Section 7(a) by the Participant’s executor or administrator, or the person or persons to whom the Participant’s rights under this Award Agreement shall pass by will or by the laws of descent and distribution as the case may be. Any heir or legatee of the Participant shall take rights herein granted subject to the terms and conditions hereof.

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(v)Participant understands that all transactions in Company securities, including exercise of Options, are subject to the Company’s policies, including the Fortegra Financial Corporation Insider Trading and Regulation FD Policy.

8.Adjustment of Shares. In the event of any corporate event or transaction (as described in Section 12.1 of the Plan), the terms of this Award Agreement (including, without limitation, the number and kind of Shares subject to this Agreement and the Option Price) may be adjusted as set forth in Section 12.1 of the Plan.

9.Definitions.

(a)“Cause” shall have the meaning set forth in the Participant’s employment agreement with the Company or its Affiliates, if any, or if the Participant is not a party to an employment agreement with a definition of “Cause”, then “Cause” shall mean that the Board has determined that any one or more of the following has occurred: (i) the Participant shall have been indicted for, or shall have pleaded guilty or nolo contendere to, any felony; (ii) the Participant shall have failed or refused to carry out the reasonable and lawful instructions of the Chief Executive Officer of the Company, the executive to whom the Participant reports, or the Board (other than as a result of illness or disability) concerning duties or actions consistent with the Participant’s position and such failure or refusal shall have continued for a period of ten (10) days following written notice from the Board; (iii) the Participant shall fail to adhere to any material written Company policy; (iv) the Participant shall have engaged in any gross or willful misconduct resulting in a substantial loss to the Company or any of its Affiliates or substantial damage to any of their reputations; or (v) the Participant shall have committed any fraud, embezzlement, misappropriation of funds, breach of fiduciary duty or other act of dishonesty against the Company.

“Disability” shall have the meaning set forth in the Participant’s employment agreement with the Company, if any, or if the Participant is not a party to an employment agreement with a definition of “Disability”, then “Disability” shall mean the failure or inability of the Participant to perform duties with the Company or any Affiliate for a period of at least 180 consecutive days (or 180 days during any twelve (12) month period) by reason of any physical or mental condition, as determined reasonably and in good faith by the Committee; provided, that, if the Company’s long term disability plan contains a definition of “disability,” the definition in such plan will control for purposes of this Agreement.

“Good Reason” shall have the meaning set forth in the Participant’s employment agreement with the Company, if any, or if the Participant is not a party to an employment agreement with a definition of “Good Reason”, then “Good Reason” shall mean, without the Participant’s prior written consent, (A) any material reduction in the Participant’s base salary; (B) any material diminution in the Participant’s position, duties or responsibilities; or (C) a relocation of the Participant’s principal office to a location more than 50 miles from its current location; provided that, no finding of Good Reason shall be effective unless and until the Participant has provided the Company, within sixty (60) calendar days of the occurrence of the facts and circumstances underlying the finding of Good Reason, written notice stating with specificity the facts and circumstances underlying the finding of Good Reason, and, if the basis for such finding of Good Reason is capable of being cured by the Company, providing the Company with an opportunity to cure the same within thirty (30) calendar days after receipt of such notice.

10.No Right to Continued Service. The granting of the Option evidenced hereby and this Award Agreement shall impose no obligation on the Company or any Affiliate to continue the Service of the Participant and shall not lessen or affect any right that the Company or any Affiliate may have to terminate the Service of such Participant.

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11.Securities Laws/Legend on Certificates. The issuance and delivery of Shares shall comply (or be exempt from) all applicable requirements of law, including (without limitation) the Securities Act of 1933, as amended, the rules and regulations promulgated thereunder, state securities laws and regulations, and the regulations of any stock exchange or other securities market on which the Company’s securities may then be traded. The Company shall not be obligated to file any registration statement under any applicable securities laws to permit the purchase or issuance of any Shares under the Plan or Awards, and accordingly any certificates for Shares or documents granting Awards may have an appropriate legend or statement of applicable restrictions endorsed thereon. If the Company deems it necessary to ensure that the issuance of Shares under the Plan is not required to be registered under any applicable securities laws, each Participant to whom such Shares would be issued shall deliver to the Company an agreement or certificate containing such representations, warranties and covenants as the Company may reasonably request which satisfies such requirements.

12.Transferability. Unless otherwise provided by the Committee, the Option may not be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by the Participant other than by will or by the laws of descent and distribution, and any such purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable against the Company or any Affiliate; provided, that, the designation of a beneficiary shall not constitute an assignment, alienation, pledge, attachment, sale, transfer or encumbrance. No such permitted transfer of the Option to heirs or legatees of the Participant shall be effective to bind the Company unless the Committee shall have been furnished with written notice thereof and a copy of such evidence as the Committee may deem necessary to establish the validity of the transfer and the acceptance by the transferee or transferees of the terms and conditions hereof. During the Participant’s lifetime, the Option is exercisable only by the Participant.

13.Withholding. The Participant may be required to pay to the Company or any Affiliate and the Company shall have the right and is hereby authorized to withhold, any applicable withholding taxes in respect of the Option, its exercise or transfer and to take such other action as may be necessary in the opinion of the Committee to satisfy all obligations for the payment of such withholding taxes.

14.Notices. Any notification required by the terms of this Award Agreement shall be given in writing and shall be deemed effective upon personal delivery or within three (3) days of deposit with the United States Postal Service, by registered or certified mail, with postage and fees prepaid. A notice shall be addressed to the Company, Attention: General Counsel, at its principal executive office and to the Participant at the address that he or she most recently provided to the Company.

15.Entire Agreement. This Award Agreement and the Plan constitute the entire contract between the parties hereto with regard to the subject matter hereof. They supersede any other agreements, representations or understandings (whether oral or written and whether express or implied) which relate to the subject matter hereof.

16.Waiver. No waiver of any breach or condition of this Award Agreement shall be deemed to be a waiver of any other or subsequent breach or condition whether of like or different nature.

17.Successors and Assigns. The provisions of this Award Agreement shall inure to the benefit of, and be binding upon, the Company and its successors and assigns and upon the Participant, the Participant’s assigns and the legal representatives, heirs and legatees of the Participant’s estate, whether or not any such person shall have become a party to this Award Agreement and have agreed in writing to be joined herein and be bound by the terms hereof.

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18.Choice of Law; Jurisdiction; Waiver of Jury Trial. This Agreement shall be governed by the laws of the State of Delaware, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of the Plan to the substantive law of another jurisdiction.

SUBJECT TO THE TERMS OF THIS AGREEMENT, THE PARTIES AGREE THAT ANY AND ALL ACTIONS ARISING UNDER OR IN RESPECT OF THIS AGREEMENT SHALL BE LITIGATED IN THE FEDERAL OR STATE COURTS IN NEW YORK. BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH PARTY IRREVOCABLY SUBMITS TO THE PERSONAL JURISDICTION OF SUCH COURTS FOR ITSELF, HIMSELF OR HERSELF AND IN RESPECT OF ITS, HIS OR HER PROPERTY WITH RESPECT TO SUCH ACTION. EACH PARTY AGREES THAT VENUE WOULD BE PROPER IN ANY OF SUCH COURTS, AND HEREBY WAIVES ANY OBJECTION THAT ANY SUCH COURT IS AN IMPROPER OR INCONVENIENT FORUM FOR THE RESOLUTION OF ANY SUCH ACTION.

EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT.

19.Option Subject to Plan. By entering into this Award Agreement the Participant agrees and acknowledges that the Participant has received and read a copy of the Plan. The Option is subject to the Plan. The terms and provisions of the Plan as it may be amended from time to time are hereby incorporated herein by reference (subject to the limitations set forth in Section 18). In the event of a conflict between any term or provision contained herein and a term or provision of the Plan, the applicable terms and provisions of the Plan will govern and prevail.

20.No Guarantees Regarding Tax Treatment. The Participant (or their beneficiaries) shall be responsible for all taxes with respect to the Option. The Committee and the Company make no guarantees regarding the tax treatment of the Option. Neither the Committee nor the Company has any obligation to take any action to prevent the assessment of any tax under Section 409A of the Code or otherwise and none of the Company, any Affiliate, or any of their employees or representatives shall have any liability to the Participant with respect thereto.

21.Amendment. The Committee may amend or alter this Award Agreement and the Option granted hereunder at any time, subject to the terms of the Plan.

22.Severability. The provisions of this Award Agreement are severable and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.

23.Signature in Counterparts/Electronic Signature. This Award Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Award Agreement may be signed electronically with the same force and effect as if signed manually.

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IN WITNESS WHEREOF, the parties hereto have executed this Nonqualified Stock Option Award Agreement as of the Grant Date set forth in Schedule A.

FORTEGRA FINANCIAL CORPORATION, a Delaware corporation

By:

Name:

Title:

Acknowledged and agreed to by Participant as

of the Grant Date set forth on Schedule A:

Print Name:

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Schedule A

Grant Date:        __/__/____

Participant:        ______

Participant ID:        _____

Plan:            Fortegra Financial Corporation 2010 Omnibus Incentive Plan

Number of Shares:    ______

Option Price: $__, or if no price is designated, the closing price of the Company’s stock on the last business day prior to the Grant Date.

Vesting:

EX-31.1

Exhibit 31.1

SECTION 302 CERTIFICATION FOR THE CHIEF EXECUTIVE OFFICER

I, Richard S. Kahlbaugh, certify that:

1. I have reviewed this Report on Form 10-Q of Fortegra Financial Corporation (Registrant);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4. The Registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and

5. The Registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of the Registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting.

Date:	May 15, 2013	/s/ Richard S. Kahlbaugh
		Richard S. Kahlbaugh
		Chairman, President and Chief Executive Officer

EX-31.2

Exhibit 31.2

SECTION 302 CERTIFICATION FOR THE CHIEF FINANCIAL OFFICER

I, Walter P. Mascherin, certify that:

1. I have reviewed this Report on Form 10-Q of Fortegra Financial Corporation (Registrant);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4. The Registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and

5. The Registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of the Registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting.

Date:	May 15, 2013	/s/ Walter P. Mascherin
		Walter P. Mascherin
		Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Fortegra Financial Corporation on Form 10-Q as filed with the Securities and Exchange Commission on the date hereof (the "Report"), each of the undersigned, in the capacity and on the date indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of Fortegra Financial Corporation as of the dates and for the periods expressed in the Report.

Date:	May 15, 2013	By:	/s/ Richard S. Kahlbaugh
			Richard S. Kahlbaugh
			Chairman, President and Chief Executive Officer
Date:	May 15, 2013	By:	/s/ Walter P. Mascherin
			Walter P. Mascherin
			Executive Vice President and Chief Financial Officer

A signed original of this written statement required by Rule 13a-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350 has been provided to the Registrant and will be retained by the Registrant and furnished to the Securities and Exchange Commission or its staff upon request. 

This certification accompanies the Report to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of the Registrant under the Securities Act of 1933 or the Securities Exchange Act of 1934 (whether made before or after the date of the Report), irrespective of any general incorporation language contained in such filing.

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Notes Payable (Tables)

3 Months Ended

Mar. 31, 2013

Payables and Accruals [Abstract]

Schedule of Long-term Debt Instruments [Table Text Block]

The Company's Notes Payable consisted of the following:	At
	March 31, 2013			December 31, 2012
Wells Fargo Bank, N.A., credit facility, maturing August 2017	$	91,750		$	89,438
Maximum balance allowed on Wells Fargo Bank, N.A credit facility	$	125,000		$	125,000
Interest rate at the end of the respective period:	2.71		%	2.76		%

Schedule of Maturities of Long-term Debt [Table Text Block]

Aggregate maturities for the Company's note payable at March 31, 2013 are as follows:

Remainder of 2013	$	3,750
2014	5,000
2015	5,000
2016	5,000
2017	73,000
Thereafter	—
Total	$	91,750

Line of Credit Covenant Requirements [Table Text Block]

The following is a summary of the Credit Agreement's more significant financial covenants calculated at March 31, 2013, except for the RBC Ratios, which under the Credit Agreement reflect the ratios calculated as of the most recent fiscal year end, in this case December 31, 2012:

		Actual At
Covenant	Covenant Requirement	March 31, 2013
Total leverage ratio	not more than 3.50	3.13
Fixed charge coverage ratio	not less than 2.00	2.75
Reinsurance ratio	not less than 50%	69.0%
		Actual At
RBC Ratios:		December 31, 2012
RBC Ratio - Bankers Life of Louisiana	not less than 250%	469.0%
RBC Ratio - Southern Financial Life Insurance Company	not less than 250%	2,155.0%
RBC Ratio - Insurance Company of the South	not less than 250%	378.0%
RBC Ratio - Lyndon Southern Insurance Company	not less than 250%	255.0%
RBC Ratio - Life of the South Insurance Company	not less than 250%	386.0%

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Other Intangible Assets Level 4 Other Intangible Assets, Carrying Values and Amortization Periods (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 73,454	$ 73,454
Accumulated Amortization	(20,937)	(18,989)
Net Carrying Amount	52,517	54,465
Customer and Agent Relationships [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	57,780	57,780
Accumulated Amortization	(13,822)	(12,340)
Net Carrying Amount	43,958	45,440
Software [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	10,118	10,118
Accumulated Amortization	(3,723)	(3,385)
Net Carrying Amount	6,395	6,733
Present Value of Future Profits [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	548	548
Accumulated Amortization	(548)	(548)
Net Carrying Amount	0	0
Noncompete Agreements [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	5,008	5,008
Accumulated Amortization	(2,844)	(2,716)
Net Carrying Amount	$ 2,164	$ 2,292
Minimum [Member] | Customer and Agent Relationships [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Amortization period (Years)	5 years
Minimum [Member] | Software [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Amortization period (Years)	5 years
Minimum [Member] | Present Value of Future Profits [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Amortization period (Years)	3 months 18 days
Minimum [Member] | Noncompete Agreements [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Amortization period (Years)	1 year 6 months
Maximum [Member] | Customer and Agent Relationships [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Amortization period (Years)	15 years
Maximum [Member] | Software [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Amortization period (Years)	10 years
Maximum [Member] | Present Value of Future Profits [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Amortization period (Years)	9 months
Maximum [Member] | Noncompete Agreements [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Amortization period (Years)	6 years

XML

Earnings Per Share (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Net Income	$ 2,493	$ 3,414
Total average basic common shares outstanding	19,556,743	19,904,819
Effect of dilutive stock options and restricted stock awards	1,068,298	834,377
Total average diluted common shares outstanding	20,625,041	20,739,196
Earnings per share-basic	$ 0.13	$ 0.17
Earnings per share-diluted	$ 0.12	$ 0.16
Weighted average anti-dilutive common shares	402,132	378,927

XML

Derivative Financial Instruments - Interest Rate Swap Level 4 Amounts in AOCI (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Dec. 31, 2012
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) recognized in AOCI on the derivative-effective portion	$ 260	$ (70)
Estimated loss to be reclassified to earnings from AOCI during the next 12 months	1,118
Other Comprehensive Income (Loss) [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Balance Sheet Location	AOCI
Interest Rate Swap [Member] | Cash Flow Hedging [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Interest rate swap - notional value	35,000		35,000
Variable rate of the interest rate swap	0.28%		0.31%
Fixed rate of the interest rate swap	3.47%		3.47%
Loss reclassified from AOCI into income-effective portion	49	0
Gain (loss) recognized in income on the derivative-ineffective portion	0	0
Interest Rate Swap [Member] | Other Comprehensive Income (Loss) [Member] | Cash Flow Hedging [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Unrealized loss, net of tax, on the fair value of the Swap	(2,619)		(2,820)
Accrued expenses, accounts payable and other liabilities [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Balance Sheet Location	Accrued expenses, accounts payable and other liabilities
Accrued expenses, accounts payable and other liabilities [Member] | Interest Rate Swap [Member] | Cash Flow Hedging [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Fair Value of the Swap	$ (4,029)		$ (4,338)

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Other Intangible Assets Indefinite lived intangible assets (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Acquired Indefinite-lived Intangible Assets [Line Items]
Indefinite-Lived Intangible Assets (Excluding Goodwill)	$ 25,250	$ 24,875
Trade Names [Member]
Acquired Indefinite-lived Intangible Assets [Line Items]
Tradenames	24,875	24,875
Licenses [Member]
Acquired Indefinite-lived Intangible Assets [Line Items]
Indefinite-Lived License Agreements	$ 375	$ 0

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Income Taxes (Details) (USD $)	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Income Tax Examination [Line Items]
Current	$ 308,000	$ 1,951,000
Deferred	1,046,000	(64,000)
Income taxes	1,354,000	1,887,000
Income Tax Examination, Liability (Refund) Adjustment from Settlement with Taxing Authority	$ 57,000
Minimum [Member]
Income Tax Examination [Line Items]
Income Tax Examination, Year under Examination	2009
Maximum [Member]
Income Tax Examination [Line Items]
Income Tax Examination, Year under Examination	2010

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Related Party Transactions (Tables)

3 Months Ended

Mar. 31, 2013

Related Party Transactions [Abstract]

Schedule of Related Party Transactions [Table Text Block]

The following table details the amounts recorded on the Company's Consolidated Balance Sheets and Consolidated Statements of Income resulting from related party transactions:

	For the Three Months Ended
	March 31, 2013		March 31, 2012
Income recorded by the Company from related parties	$	507	$	132
Related party interest income on notes receivable	$	21	$	—
Related party lease expense	$	123	$	—
Related party commissions paid	$	205	$	—
	At
	March 31, 2013		December 31, 2012
Notes receivable from related parties	$	134	$	6,269

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Business Acquisitions and Dispositions (Tables)

3 Months Ended

Mar. 31, 2013

Business Combinations [Abstract]

Schedule of Business Acquisitions, by Acquisition [Table Text Block]

The following table presents the allocation of purchase price recorded for the 2013 acquisition of RICC and the 2012 acquisitions of ProtectCELL and 4Warranty.  The ProtectCELL and 4Warranty determinations are preliminary, mainly due to ongoing studies being conducted by external valuation experts to assist the Company in its determination of the fair values of intangible assets, deferred revenues, non-controlling interest and goodwill, and the related impact on deferred taxes, whereas all other amounts are considered final. The ProtectCELL value of deferred acquisition costs as of the acquisition date has been reclassified to deferred revenue to present our preliminary estimate of the fair value of our ongoing performance obligation at the time of acquisition as reflected in the Consolidated Balance Sheet as of December 31, 2012.

	2012						2013
	Acquisitions						Acquisition
	4Warranty			ProtectCELL			RICC
Assets:
Cash and cash equivalents	$	703		$	350		$	1,893
Restricted cash	72			7,438			—
Investments	—			—			2,488
Short-term investments	—			252			—
Accrued investment income	—			—			38
Notes receivable, net	—			6,341			—
Other receivables	199			2,312			—
Reinsurance receivables	—			—			200
Property and equipment, net	61			674			—
Other intangible assets, net	1,900			27,815			375
Other assets	—			1,470			10
Liabilities:
Unpaid claims	—			(176		)	(200		)
Accrued expenses, accounts payable and other liabilities	(221		)	(2,644		)	(9		)
Deferred revenue	(1,260		)	(25,564		)	—
Income taxes payable	(296		)	—			—
Deferred income taxes, net	(266		)	—			—
Net assets acquired	892			18,268			4,795
Non-controlling interest	—			(10,000		)	—
Purchase consideration (1)	3,616			20,000			4,795
Goodwill	$	2,724		$	11,732		$	—

⁽¹⁾ - The purchase consideration for the 4Warranty acquisition includes $0.3 million of contingent consideration and $0.5 million of working capital and hold back reserves, which estimates are unchanged in the current period and are expected to be paid out based on the agreed terms of the Stock Purchase Agreement.

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Income Taxes Schedule of Effective Rate Reconciliation (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Income Tax Disclosure [Abstract]
Income taxes at federal income tax rate	$ 1,632	$ 1,862
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate	35.00%	35.00%
Small life deduction	(109)	(114)
Effective Income Tax Rate Reconciliation, Nondeductible Expense, Life Insurance	(2.34%)	(2.14%)
Non-deductible expenses	26	47
Effective Income Tax Rate Reconciliation, Nondeductible Expense	0.56%	0.88%
Tax exempt interest	31	33
Effective Income Tax Rate Reconciliation, Tax Exempt Income	(0.67%)	(0.62%)
State taxes	170	126
Effective Income Tax Rate Reconciliation, State and Local Income Taxes	3.64%	2.37%
Prior year tax true-up	0	(1)
Effective Income Tax Rate Reconciliation, Noncontrolling Interest Income (Expense)	(6.14%)
Effective Income Tax Rate Reconciliation, Prior Year Income Taxes	0.00%	(0.01%)
Non-controlling interest	(286)
Income Tax Reconciliation, Other Adjustments	(48)	0
Effective Income Tax Rate Reconciliation, Other Adjustments	(1.02%)	0.00%
Income taxes	$ 1,354	$ 1,887
Effective Income Tax Rate, Continuing Operations	29.03%	35.48%

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Stock-Based Compensation Stock-options, vested and expected to vest (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2013
Stock-based compensation [Abstract]
Number of shares vested and expected to vest	2,327,362
Weighted average remaining contractual life (in years)	5 years 4 months 17 days
Weighted average exercise price per option (in dollars)	$ 4.94
Intrinsic value	$ 9,115

XML

Related Party Transactions (Details) (USD $)	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Related Party Transaction [Line Items]
Repayment of Notes Receivable from Related Parties	$ 6,135,000	$ 0
Income recorded by the Company from related parties	507,000	132,000
Notes receivable from related parties	134,000	6,269,000
ProtectCell [Member]
Related Party Transaction [Line Items]
Due from Related Parties	6,100,000
Related Party Transaction, Rate	8.00%
Related Party Transaction, Date	Mar. 15, 2013
Repayment of Notes Receivable from Related Parties	6,100,000
South Bay Acceptance Corporation [Member]
Related Party Transaction [Line Items]
Due from Related Parties	100,000
Director [Member]
Related Party Transaction [Line Items]
Related party agreement, base service revenue amount		300,000
Interest Income [Member]
Related Party Transaction [Line Items]
Income recorded by the Company from related parties	21,000	0
Related Party Lease Expense [Member]
Related Party Transaction [Line Items]
Related Party Transaction, Expenses from Transactions with Related Party	123,000	0
Related Party Commissions paid [Member]
Related Party Transaction [Line Items]
Related Party Transaction, Expenses from Transactions with Related Party	$ 205,000	$ 0

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Other Intangible Assets Future Amortization Expense (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Finite Lived Intangible Future Amortization [Abstract]
Remainder of 2013	$ 5,824
2014	7,760
2015	7,753
2016	7,128
2017	5,781
Therafter	18,271
Net Carrying Amount	$ 52,517	$ 54,465

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Stock-Based Compensation Stock-Based Compensation Expense (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Income tax benefit	$ (116)	$ (68)
Net stock-based compensation expense	186	111
share-based compensation expense, recognized in personnel expense [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated Share-based Compensation Expense	184	120
share-based compensation expense, recognized in other operating expense [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated Share-based Compensation Expense	$ 118	$ 59

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Commitments and Contingencies (Details) (USD $)	1 Months Ended			3 Months Ended
	Nov. 30, 2012 Pending Litigation [Member] Dill and Thurman v. Continental Car Club, Inc. and Fortegra Financial Corp. [Member]	Mar. 31, 2013 Pending Litigation [Member] Dill and Thurman v. Continental Car Club, Inc. and Fortegra Financial Corp. [Member]	Mar. 31, 2013 Acquisition of ProtectCELL [Member]	Mar. 31, 2013 Minimum [Member] Dill and Thurman v. Continental Car Club, Inc. and Fortegra Financial Corp. [Member]	Mar. 31, 2013 Maximum [Member] Dill and Thurman v. Continental Car Club, Inc. and Fortegra Financial Corp. [Member]
Loss Contingencies [Line Items]
Contingent consideration arrangements, range of outcomes value, high			$ 10,200,000
Business Combination, Contingent Consideration Arrangement, Contribution Amount For Each Preferred Unit Of Acquired Entity			$ 1,000
Damages awarded				600,000	800,000
Length of employment agreement, covering salary and benefits	2 years
Loss Contingency, Range of Possible Loss, Minimum		$ 0

XML

Income Taxes Tax Credit Carryforwards (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2013
Tax Credit Carryforward [Line Items]
Tax Credit Carryforward, Expiration Date	Dec. 31, 2019
Tax Credit Carryforward, Valuation Allowance	$ 0.2
Internal Revenue Service (IRS) [Member] | Research Tax Credit Carryforward [Member]
Tax Credit Carryforward [Line Items]
Tax Credit Carryforward, Amount	0.5
State and Local Jurisdiction [Member] | Research Tax Credit Carryforward [Member]
Tax Credit Carryforward [Line Items]
Tax Credit Carryforward, Amount	$ 0.2

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Segment Results (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013 segment	Mar. 31, 2012
Segment Reporting Information [Line Items]
Number of operating Segments	3
Service and administrative fees	$ 38,858	$ 22,511
Ceding commission	7,163	7,064
Net Investment Income, Insurance Entity	909	743
Realized Investment Gains (Losses)	7	(3)
Other income	91	72
Net losses and loss adjustment expenses	10,535	11,266
Member benefit claims	8,978	1,303
Net earned premium	33,142	31,972
Commissions	35,362	31,988
Insurance Commissions and Fees	9,731	9,520
Segment Reporting Information, Revenue for Reportable Segment	35,026	27,322
Operating Expenses	25,651	18,131
Earnings before interest, taxes, depreciation and amortization	9,375	9,191
Depreciation and Amortization	3,266	2,220
Interest expense	1,444	1,652
Income before income taxes and non-controlling interests	4,665	5,319
Income taxes	1,354	1,887
Less: net income attributable to non-controlling interests	818	18
Net Income	2,493	3,414
Payment Protection Segment [Member]
Segment Reporting Information [Line Items]
Service and administrative fees	34,200	17,803
Ceding commission	7,163	7,064
Net Investment Income, Insurance Entity	909	743
Realized Investment Gains (Losses)	7	(3)
Other income	91	72
Net losses and loss adjustment expenses	10,535	11,266
Member benefit claims	8,978	1,303
Net earned premium	33,142	31,972
Commissions	35,362	31,988
Segment reporting information, Net Revenue for Payment Protection Segment	20,637	13,094
Operating Expenses	14,892	7,913
Earnings before interest, taxes, depreciation and amortization	5,745	5,181
Depreciation and Amortization	1,775	849
Interest expense	957	1,012
Income before income taxes and non-controlling interests	3,013	3,320
BPO segment [Member]
Segment Reporting Information [Line Items]
Segment reporting information, Net Revenue for BPO Segment	4,214	4,205
Operating Expenses	3,556	3,133
Earnings before interest, taxes, depreciation and amortization	658	1,072
Depreciation and Amortization	834	503
Interest expense	177	267
Income before income taxes and non-controlling interests	(353)	302
Brokerage Segment [Member]
Segment Reporting Information [Line Items]
Insurance Commissions and Fees	9,731	9,520
Service and administrative fees, Brokerage Segement	444	503
Segment reporting information, Net Revenue for Brokerage Segment	10,175	10,023
Operating Expenses	7,203	7,085
Earnings before interest, taxes, depreciation and amortization	2,972	2,938
Depreciation and Amortization	657	868
Interest expense	310	373
Income before income taxes and non-controlling interests	2,005	1,697
Corporate [Member]
Segment Reporting Information [Line Items]
Operating Expenses	0	0
Earnings before interest, taxes, depreciation and amortization	0	0
Income before income taxes and non-controlling interests	$ 0	$ 0

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Stock-Based Compensation Unrecognized Compensation related to non-vested awards (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013
Stock Options [Member]
Unrecognized compensation cost related to non-vested awards	$ 973
Weighted-average recognition period (in years)	3 years 10 months 24 days
Restricted Stock [Member]
Unrecognized compensation cost related to non-vested awards	$ 1,544
Weighted-average recognition period (in years)	5 years 3 months 18 days

XML

Stock-Based Compensation Summary of Stock Option Activity (Details) (USD $)	3 Months Ended
	Mar. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options Outstanding, Weighted Average Remaining Contractual Term	5 years 5 months 9 days
Options Exercisable, Weighted Average Remaining Contractual Term	3 years 11 months 23 days
Share-based Compensation awards, time-based [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options Outstanding, Beginning Balance (in shares)	2,016,231
Options Outstanding, Weighted Average Exercise Price, Beginning Balance (in dollars per share)	4.38
Options Exercisable, Beginning Balance (in shares)	1,690,040
Options Exercisable, Weighted Average Exercise Price, Beginning Balance (in dollars per share)	3.66
Granted (in shares)	0
Granted, Weighted Average Exercise Price (in dollars per share)	0.00
Vested (in shares)	8,642
Vested, Weighted Average Exercise Price (in dollars per share)	9.86
Exercised (in shares)	0
Exercised, Weighted Average Exercise Price (in dollars per share)	0.00
Canceled/forfeited (in shares)	(18,750)
Canceled/forfeited, Weighted Average Exercise Price (in dollars per share)	7.84
Options Outstanding, Ending Balance (in shares)	1,997,481
Options Outstanding, Weighted Average Exercise Price, Ending Balance (in dollars per share)	4.35
Options Exercisable, Ending Balance (in shares)	1,698,682
Options Exercisable, Weighted Average Exercise Price, Ending Balance (in dollars per share)	3.69
Options Outstanding, Weighted Average Remaining Contractual Term	4 years 8 months 12 days
Options Exercisable, Weighted Average Remaining Contractual Term	4 years
Share-based Compensation awards, performanced-based [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options Outstanding, Beginning Balance (in shares)	185,000
Options Outstanding, Weighted Average Exercise Price, Beginning Balance (in dollars per share)	8.00
Options Exercisable, Beginning Balance (in shares)	0
Options Exercisable, Weighted Average Exercise Price, Beginning Balance (in dollars per share)	0.00
Granted (in shares)	228,981
Granted, Weighted Average Exercise Price (in dollars per share)	8.89
Exercised (in shares)	0
Exercised, Weighted Average Exercise Price (in dollars per share)	0.00
Canceled/forfeited (in shares)	49,168
Canceled/forfeited, Weighted Average Exercise Price (in dollars per share)	8.62
Options Outstanding, Ending Balance (in shares)	364,813
Options Outstanding, Weighted Average Exercise Price, Ending Balance (in dollars per share)	8.48
Options Exercisable, Ending Balance (in shares)	0
Options Exercisable, Weighted Average Exercise Price, Ending Balance (in dollars per share)	0.00
Options Outstanding, Weighted Average Remaining Contractual Term	9 years 6 months
Options Exercisable, Weighted Average Remaining Contractual Term	0 years
Subsequent Event [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	3 years

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Statutory Reporting and Insurance Subsidiaries Dividend Restrictions

3 Months Ended

Mar. 31, 2013

Statutory Reporting and Dividend Restrictions [Abstract]

Statutory Reporting and Dividend Restrictions Disclosure [Table Text Block]

Statutory Reporting and Insurance Subsidiaries Dividend Restrictions

The Company's insurance subsidiaries may pay dividends to the Company, subject to statutory restrictions. Payments in excess of statutory restrictions (extraordinary dividends) to the Company are permitted only with prior approval of the insurance departments of the applicable state of domicile. All dividends from subsidiaries were eliminated in the Consolidated Financial Statements.

The following table sets forth the dividends paid to the Company by its insurance company subsidiaries for the following periods:

	For the Three Months Ended		For the Twelve Months Ended
	March 31, 2013		December 31, 2012
Ordinary dividends	$	231	$	2,783
Extraordinary dividends	—		—
Total dividends	$	231	$	2,783

The following table details the combined statutory capital and surplus of the Company's insurance subsidiaries, the required minimum statutory capital and surplus, as required by the laws of the states in which they are domiciled and the combined amount available for ordinary dividends of the Company's insurance subsidiaries for the following periods:

	At
	March 31, 2013		December 31, 2012
Combined statutory capital and surplus of the Company's insurance subsidiaries	$	61,181	$	53,885
Required minimum statutory capital and surplus	$	19,500	$	15,300
Amount available for ordinary dividends of the Company's insurance subsidiaries	$	4,228	$	4,500

Under the NAIC's Risk-Based Capital Act of 1995, a company's Risk-Based Capital ("RBC") is calculated by applying certain risk factors to various asset, claim and reserve items. If a company's adjusted surplus falls below calculated RBC thresholds, regulatory intervention or oversight is required. The Company's insurance subsidiaries' RBC levels, as calculated in accordance with the NAIC's RBC instructions, exceeded all RBC thresholds as of March 31, 2013 and December 31, 2012, respectively.

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Variable Interest Entities (Details) (Creative Investigations Recovery Group (CIRG), USD $) In Thousands, unless otherwise specified	1 Months Ended
	Jul. 31, 2011	Mar. 31, 2013	Dec. 31, 2012
Creative Investigations Recovery Group (CIRG)
Variable Interest Entity [Line Items]
Ownership Percentage in VIE	100.00%
The Company's maximum exposure to loss in the VIE		$ 1,139	$ 1,139

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Income Taxes Provision for income taxes (Tables)

3 Months Ended

Mar. 31, 2013

Income taxes [Abstract]

Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]

The provision for income taxes consisted of the following:	For the Three Months Ended
	March 31, 2013		March 31, 2012
Current	$	308	$	1,951
Deferred	1,046		(64		)
Income taxes	$	1,354	$	1,887

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

The reconciliation of the income tax expense at the federal statutory income tax rate of 35% is as follows:

	For the Three Months Ended
	March 31, 2013					March 31, 2012
	Amount			Percent of Pre-tax Income		Amount			Percent of Pre-tax Income
Income taxes at federal income tax rate	$	1,632		35.00	%	$	1,862		35.00	%
Effect of:
Small life deduction	(109		)	(2.34	)	(114		)	(2.14	)
Non-deductible expenses	26			0.56		47			0.88
Tax exempt interest	(31		)	(0.67	)	(33		)	(0.62	)
State taxes	170			3.64		126			2.37
Prior year tax true-up	—			—		(1		)	(0.01	)
Non-controlling interest	(286		)	(6.14	)	—			—
Other, net	(48		)	(1.02	)	—			—
Income taxes	$	1,354		29.03	%	$	1,887		35.48	%

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Stock-Based Compensation Summary of Restricted Stock Awards (Details) (USD $)	3 Months Ended
	Mar. 31, 2013
Share-based Compensation awards, performanced-based [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Granted (in shares)	76,326
Share-based Compensation awards, restricted share awards,time-based [Member] [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Shares outstanding, beginning balance (in shares)	103,000
Granted (in shares)	75,000
Vested (in shares)	(20,000)
Forfeited (in shares)	0
Shares outstanding, ending balance (in shares)	158,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward]
Shares outstanding, Weighted Average Grant Date Fair Value, beginning balance (in dollars per share)	8.00
Granted, Weighted Average Grant Date Fair Value (in dollars per share)	9.53
Vested, Weighted Average Grant Date Fair Value (in dollars per share)	7.24
Forfeited, Weighted Average Grant Date Fair Value (in dollars per share)	0.00
Shares outstanding, Weighted Average Grant Date Fair Value, ending balance (in dollars per share)	8.82
Share-based Compensation awards, restricted share awards,performance-based [Member] [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Shares outstanding, beginning balance (in shares)	80,861
Granted (in shares)	76,326
Vested (in shares)	0
Forfeited (in shares)	(11,389)
Shares outstanding, ending balance (in shares)	145,798
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward]
Shares outstanding, Weighted Average Grant Date Fair Value, beginning balance (in dollars per share)	11.00
Granted, Weighted Average Grant Date Fair Value (in dollars per share)	8.89
Vested, Weighted Average Grant Date Fair Value (in dollars per share)	0.00
Forfeited, Weighted Average Grant Date Fair Value (in dollars per share)	8.89
Shares outstanding, Weighted Average Grant Date Fair Value, ending balance (in dollars per share)	10.06
Share-based Compensation awards, time-based [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Granted (in shares)	75,000
Director [Member] | Share-based Compensation awards, time-based [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward]
Number of employees receiving grants	5

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Investments (Tables)

3 Months Ended

Mar. 31, 2013

Investments [Abstract]

Available-for-sale Securities [Table Text Block]

The following table summarizes the Company's available-for-sale fixed maturity and equity securities at:

	March 31, 2013
Description of Security	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Obligations of the U.S. Treasury and U.S. Government agencies	$	26,779	$	654	$	(54	)	$	27,379
Municipal securities	18,407		399		(29		)	18,777
Corporate securities	69,254		2,585		(150		)	71,689
Mortgage-backed securities	195		1		—			196
Asset-backed securities	60		1		—			61
Total fixed maturity securities	$	114,695	$	3,640	$	(233	)	$	118,102
Common stock - publicly traded	$	39	$	5	$	—		$	44
Preferred stock - publicly traded	5,975		212		(1		)	6,186
Common stock - non-publicly traded	59		4		(5		)	58
Preferred stock - non-publicly traded	1,009		4		—			1,013
Total equity securities	$	7,082	$	225	$	(6	)	$	7,301

	December 31, 2012
Description of Security	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Obligations of the U.S. Treasury and U.S. Government agencies	$	22,424	$	761	$	(7	)	$	23,178
Municipal securities	16,636		413		(8		)	17,041
Corporate securities	67,627		2,461		(80		)	70,008
Mortgage-backed securities	285		4		—			289
Asset-backed securities	123		2		—			125
Total fixed maturity securities	$	107,095	$	3,641	$	(95	)	$	110,641
Common stock - publicly traded	$	39	$	3	$	—		$	42
Preferred stock - publicly traded	4,975		133		(1		)	5,107
Common stock - non-publicly traded	59		4		(5		)	58
Preferred stock - non-publicly traded	1,009		4		—			1,013
Total equity securities	$	6,082	$	144	$	(6	)	$	6,220

Restricted investments [Table Text Block]

Pursuant to certain reinsurance agreements and statutory licensing requirements, the Company has deposited invested assets in custody accounts or insurance department safekeeping accounts. The Company is not permitted to remove invested assets from these accounts without prior approval of the contractual party or regulatory authority. The following table details the Company's restricted investments:

	At
	March 31, 2013		December 31, 2012
Fair value of restricted investments for special deposits required by state insurance departments	$	12,491	$	10,988
Fair value of restricted investments in trust pursuant to reinsurance agreements	6,967		6,954
Fair value of restricted investments	$	19,458	$	17,942

Investments Classified by Contractual Maturity Date [Table Text Block]

The amortized cost and fair value of fixed maturity securities by contractual maturity are shown below. Expected maturities will differ from contractual maturities because borrowers have the right to call or prepay obligations with or without call or prepayment penalties.

	At
	March 31, 2013				December 31, 2012
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	5,456	$	5,512	$	5,557	$	5,608
Due after one year through five years	65,641		67,823		58,378		60,323
Due after five years through ten years	24,490		25,197		24,983		25,900
Due after ten years	18,853		19,313		17,769		18,396
Mortgage-backed securities	195		196		285		289
Asset-backed securities	60		61		123		125
Total fixed maturity securities	$	114,695	$	118,102	$	107,095	$	110,641

Schedule of Unrealized Loss on Investments [Table Text Block]

The following table provides information on unrealized losses on investment securities that have been in an unrealized loss position for less than twelve months, and twelve months or greater at:

	March 31, 2013
	Less than Twelve Months						Twelve Months or Greater						Total
Description of Security	Fair Value		Unrealized Losses			# of Securities	Fair Value		Unrealized Losses			# of Securities	Fair Value		Unrealized Losses			# of Securities
Obligations of the U.S. Treasury and U.S. Government agencies	$	4,798	$	(54	)	16	$	—	$	—		—	$	4,798	$	(54	)	16
Municipal securities	3,315		(29		)	9	—		—			—	3,315		(29		)	9
Corporate securities	10,065		(130		)	13	180		(20		)	1	10,245		(150		)	14
Total fixed maturity securities	$	18,178	$	(213	)	38	$	180	$	(20	)	1	$	18,358	$	(233	)	39
Preferred stock - publicly traded	500		(1		)	1	—		—			—	500		(1		)	1
Common stock - non-publicly traded	—		—			—	39		(5		)	2	39		(5		)	2
Total equity securities	$	500	$	(1	)	1	$	39	$	(5	)	2	$	539	$	(6	)	3

	December 31, 2012
	Less than Twelve Months						Twelve Months or Greater						Total
Description of Security	Fair Value		Unrealized Losses			# of Securities	Fair Value		Unrealized Losses			# of Securities	Fair Value		Unrealized Losses			# of Securities
Obligations of the U.S. Treasury and U.S. Government agencies	$	857	$	(7	)	11	$	—	$	—		—	$	857	$	(7	)	11
Municipal securities	734		(8		)	1	—		—			—	734		(8		)	1
Corporate securities	12,625		(63		)	16	183		(17		)	1	12,808		(80		)	17
Total fixed maturity securities	$	14,216	$	(78	)	28	$	183	$	(17	)	1	$	14,399	$	(95	)	29
Preferred stock - publicly traded	198		(1		)	1	—		—			—	198		(1		)	1
Common stock - non-publicly traded	—		—			—	39		(5		)	2	39		(5		)	2
Total equity securities	$	198	$	(1	)	1	$	39	$	(5	)	2	$	237	$	(6	)	3

Gross proceeds from the sale of available-for-sale securities [Table Text Block]

The following table summarizes the gross proceeds from the sale of available-for-sale investment securities:

	For the Three Months Ended
	March 31, 2013		March 31, 2012
Gross proceeds from sales	$	412	$	2,050

Gain (Loss) on Investments [Table Text Block]

The following table summarizes the gross realized gains and gross realized losses for both fixed maturity and equity securities and realized losses for other-than-temporary impairments for available-for-sale investment securities:

	For the Three Months Ended
	March 31, 2013		March 31, 2012
Gross realized gains	$	7	$	1
Gross realized losses	—		(4		)
Total net gains from investment sales	7		(3		)
Impairment write-downs (other-than-temporary impairments)	—		—
Net realized investment gains	$	7	$	(3	)

The following schedule details the components of net investment income:	For the Three Months Ended
	March 31, 2013			March 31, 2012
Fixed income securities	$	743		$	685
Cash on hand and on deposit	20			51
Common and preferred stock dividends	76			26
Notes receivable	72			63
Other income	114			35
Investment expenses	(116		)	(117		)
Net investment income	$	909		$	743

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Other Comprehensive Income (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Balance at December 31, 2012, net of tax	$ (631)
Other Comprehensive Income (Loss) Before Reclassifications [Abstract]
Pre-tax (loss) income	163	431
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss) [Abstract]
Less: comprehensive income (loss) attributable to non-controlling interests	0	(1)
Balance at March 31, 2013, net of tax	(468)
Unrealized Gains (Losses) on Availabe-for-sale Securities
Income taxes	(1,354)	(1,887)
Accumulated Net Unrealized Investment Gain (Loss) [Member]
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Balance at December 31, 2012, net of tax	2,189	587
Other Comprehensive Income (Loss) Before Reclassifications [Abstract]
Pre-tax (loss) income	(51)	729
Income tax benefit (expense)	18	(255)
Other comprehensive (loss) income before reclassifications, net of tax	(33)	474
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss) [Abstract]
Pre-tax (income) loss	(7)	3
Income tax expense (benefit)	2	(1)
Amounts reclassified from accumulated other comprehensive (loss) income, net of tax	(5)	2
Current period other comprehensive (loss) income, net of tax	(38)	476
Less: comprehensive income (loss) attributable to non-controlling interests	0	1
Balance at March 31, 2013, net of tax	2,151	1,062
Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges [Member]
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Balance at December 31, 2012, net of tax	(2,820)	(2,341)
Other Comprehensive Income (Loss) Before Reclassifications [Abstract]
Pre-tax (loss) income	260	(70)
Income tax benefit (expense)	(91)	25
Other comprehensive (loss) income before reclassifications, net of tax	169	(45)
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss) [Abstract]
Pre-tax (income) loss	49	0
Income tax expense (benefit)	(17)	0
Amounts reclassified from accumulated other comprehensive (loss) income, net of tax	32	0
Current period other comprehensive (loss) income, net of tax	201	(45)
Less: comprehensive income (loss) attributable to non-controlling interests	0	0
Balance at March 31, 2013, net of tax	(2,619)	(2,386)
Accumulated Other Comprehensive Income (Loss) [Member]
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Balance at December 31, 2012, net of tax	(631)	(1,754)
Other Comprehensive Income (Loss) Before Reclassifications [Abstract]
Pre-tax (loss) income	209	659
Income tax benefit (expense)	(73)	(230)
Other comprehensive (loss) income before reclassifications, net of tax	136	429
Amounts Reclassified from Accumulated Other Comprehensive Income (Loss) [Abstract]
Pre-tax (income) loss	42	3
Income tax expense (benefit)	(15)	(1)
Amounts reclassified from accumulated other comprehensive (loss) income, net of tax	27	2
Current period other comprehensive (loss) income, net of tax	163	431
Less: comprehensive income (loss) attributable to non-controlling interests	0	1
Balance at March 31, 2013, net of tax	(468)	(1,324)
Reclassification out of Accumulated Other Comprehensive Income [Member] | Accumulated Net Unrealized Investment Gain (Loss) [Member]
Unrealized Gains (Losses) on Availabe-for-sale Securities
Reclassification of gains (losses) included in net income	7	(3)
Income taxes	(2)	1
Net Income	5	(2)
Reclassification out of Accumulated Other Comprehensive Income [Member] | Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges [Member]
Unrealized Gains (Losses) on Availabe-for-sale Securities
Income taxes	17	0
Net Income	(32)	0
Interest Rate Swap
Interest expense	$ (49)	$ 0

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Reinsurance Receivables Components of Reinsurance Receivables (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items]
Reinsurance Recoverables	$ 164,633	$ 173,188
Other Reinsurance Settlements Recoverable	13,038	11,088
Reinsurance Receivables	196,907	203,988
Life [Member]
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items]
Reinsurance Recoverables	51,152	53,117
Ceded claim reserves recoverable	1,406	1,786
Accident and Health [Member]
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items]
Reinsurance Recoverables	32,588	34,266
Ceded claim reserves recoverable	8,747	9,263
Property [Member]
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items]
Reinsurance Recoverables	80,893	85,805
Ceded claim reserves recoverable	9,083	8,663
Ceded claim reserves [Member]
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items]
Ceded claim reserves recoverable	$ 19,236	$ 19,712

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Investments Investments in a unrealized loss position for <> 12 Months, current period (Details) (USD $)	Mar. 31, 2013 Securities	Dec. 31, 2012 Securities
Obligations of the U.S. Treasury and U.S. Government agencies [Member}
Schedule of Available-for-sale Securities [Line Items]
Fair Value, Less than Twelve Months	$ 4,798,000	$ 857,000
Unrealized Losses, Less than Twelve Months	(54,000)	(7,000)
Number of securities, Less than Twelve Months	16	11
Fair Value, Twelve months or Greater	0	0
Unrealized Losses,Twelve months or Greater	0	0
Number of securities,Twelve months or Greater	0	0
Total, Fair Value	4,798,000	857,000
Total Unrealized Losses	(54,000)	(7,000)
Total, Number of Securities	16	11
Municipal Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair Value, Less than Twelve Months	3,315,000	734,000
Unrealized Losses, Less than Twelve Months	(29,000)	(8,000)
Number of securities, Less than Twelve Months	9	1
Fair Value, Twelve months or Greater	0	0
Unrealized Losses,Twelve months or Greater	0	0
Number of securities,Twelve months or Greater	0	0
Total, Fair Value	3,315,000	734,000
Total Unrealized Losses	(29,000)	(8,000)
Total, Number of Securities	9	1
Corporate Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair Value, Less than Twelve Months	10,065,000	12,625,000
Unrealized Losses, Less than Twelve Months	(130,000)	(63,000)
Number of securities, Less than Twelve Months	13	16
Fair Value, Twelve months or Greater	180,000	183,000
Unrealized Losses,Twelve months or Greater	(20,000)	(17,000)
Number of securities,Twelve months or Greater	1	0
Total, Fair Value	10,245,000	12,808,000
Total Unrealized Losses	(150,000)	(80,000)
Total, Number of Securities	14	17
Total Fixed Maturity Securites [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair Value, Less than Twelve Months	18,178,000	14,216,000
Unrealized Losses, Less than Twelve Months	(213,000)	(78,000)
Number of securities, Less than Twelve Months	38	28
Fair Value, Twelve months or Greater	180,000	183,000
Unrealized Losses,Twelve months or Greater	(20,000)	(17,000)
Number of securities,Twelve months or Greater	1	0
Total, Fair Value	18,358,000	14,399,000
Total Unrealized Losses	(233,000)	(95,000)
Total, Number of Securities	39	29
Preferred Stock [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair Value, Less than Twelve Months	500,000	198,000
Unrealized Losses, Less than Twelve Months	(1,000)	(1,000)
Number of securities, Less than Twelve Months	1	1
Fair Value, Twelve months or Greater	0	0
Unrealized Losses,Twelve months or Greater	0	0
Number of securities,Twelve months or Greater	0	0
Total, Fair Value	500,000	198,000
Total Unrealized Losses	(1,000)	(1,000)
Total, Number of Securities	1	1
Common stock, non-publicly traded [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair Value, Less than Twelve Months	0	0
Unrealized Losses, Less than Twelve Months	0	0
Number of securities, Less than Twelve Months	0	0
Fair Value, Twelve months or Greater	39,000	39,000
Unrealized Losses,Twelve months or Greater	(5,000)	(5,000)
Number of securities,Twelve months or Greater	2	0
Total, Fair Value	39,000	39,000
Total Unrealized Losses	(5,000)	(5,000)
Total, Number of Securities	2	2
Total Equity Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair Value, Less than Twelve Months	500,000	198,000
Unrealized Losses, Less than Twelve Months	(1,000)	(1,000)
Number of securities, Less than Twelve Months	1	1
Fair Value, Twelve months or Greater	39,000	39,000
Unrealized Losses,Twelve months or Greater	(5,000)	(5,000)
Number of securities,Twelve months or Greater	2	0
Total, Fair Value	539,000	237,000
Total Unrealized Losses	$ (6,000)	$ (6,000)
Total, Number of Securities	3	3

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Summary of Significant Accounting Policies (Details) (USD $)	Mar. 31, 2013	Dec. 31, 2012
Noncontrolling Interest [Line Items]
Non-controlling interests	$ 11,362,000	$ 10,587,000
Southern Financial Life Insurance Company [Member] | Noncontrolling Interests [Member]
Noncontrolling Interest [Line Items]
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners	15.00%
Non-controlling interests	544,000
ProtectCell [Member] | Noncontrolling Interests [Member]
Noncontrolling Interest [Line Items]
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners	37.60%
Non-controlling interests	$ 10,818,000

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Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2013

Accounting Policies [Abstract]

Significant Accounting Policies [Text Block]

Summary of Significant Accounting Policies

Fortegra's interim Consolidated Financial Statements as of March 31, 2013 and 2012 are unaudited and have been prepared following the significant accounting policies disclosed in Note 2 of the Notes to the Consolidated Financial Statements of the Company's Annual Report on Form 10-K filed with the SEC.

Principles of Consolidation

The Consolidated Financial Statements include the accounts of Fortegra Financial Corporation and its majority-owned and controlled subsidiaries. All material intercompany account balances and transactions have been eliminated. The third-party ownership of 15% of the common stock of SFLAC and 37.6% of the ownership interests of ProtectCELL have been reflected as non-controlling interests on the Consolidated Balance Sheets. At March 31, 2013, the non-controlling interest for ProtectCELL and SFLAC totaled $10.8 million and $0.5 million, respectively.

Income (loss) attributable to these non-controlling interests has been reflected on the Consolidated Statements of Income as income (loss) attributable to non-controlling interests and on the Consolidated Statements of Comprehensive Income as comprehensive income (loss) attributable to non-controlling interests.

Comprehensive Income (Loss)

Comprehensive income (loss) includes both net income and other items of comprehensive income comprised of unrealized gains and losses on investment securities classified as available-for-sale and unrealized gains and losses on the interest rate swap, net of the related tax effects.

Use of Estimates

Preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Reclassifications

Certain items in prior financial statements have been reclassified to conform to the current presentation, which had no impact on net income, comprehensive income or loss, net cash provided by operating activities or stockholders' equity.

Subsequent Events

The Company reviewed events subsequent to March 31, 2013 that occurred up to the date the Company's Consolidated Financial Statements were issued, and determined that no events required recognition or disclosure in these Consolidated Financial Statements and/or the notes thereto.

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Investments Gross Proceeds from sales of available-for-sale investments (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Investments [Abstract]
Gross Proceeds from Sales	$ 412	$ 2,050

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Fair Value of Financial Instruments Level 3 (Tables)

3 Months Ended

Mar. 31, 2013

Sep. 30, 2012

Fair Value Disclosures [Abstract]

Fair Value, by Balance Sheet Grouping [Table Text Block]

The carrying and fair values of financial instruments are as follows:	At
	March 31, 2013				December 31, 2012
	Carrying Value		Fair Value		Carrying Value		Fair Value
Financial assets:
Cash and cash equivalents	$	14,339	$	14,339	$	15,209	$	15,209
Fixed maturity securities:
Obligations of the U.S. Treasury and U.S. Government agencies	27,379		27,379		23,178		23,178
Municipal securities	18,777		18,777		17,041		17,041
Corporate securities	71,689		71,689		70,008		70,008
Mortgage-backed securities	196		196		289		289
Asset-backed securities	61		61		125		125
Equity securities:
Common stock - publicly traded	44		44		42		42
Preferred stock - publicly traded	6,186		6,186		5,107		5,107
Common stock - non-publicly traded	58		58		58		58
Preferred stock - non-publicly traded	1,013		1,013		1,013		1,013
Notes receivable	5,045		5,045		11,290		11,290
Accounts and premiums receivable, net	33,883		33,883		27,026		27,026
Other receivables	28,189		28,189		13,511		13,511
Short-term investments	1,222		1,222		1,222		1,222
Total financial assets	$	208,081	$	208,081	$	185,119	$	185,119
Financial liabilities:
Notes payable	$	91,750	$	91,750	$	89,438	$	89,438
Preferred trust securities	35,000		35,000		35,000		35,000
Interest rate swap	4,029		4,029		4,338		4,338
Total financial liabilities	$	130,779	$	130,779	$	128,776	$	128,776

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

At December 31, 2012			Fair Value Measurements Using:
			Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs
	Fair Value		(Level 1)		(Level 2)		(Level 3)
Financial Assets:
Fixed maturity securities:
Obligations of the U.S. Treasury and U.S. Government agencies	$	23,178	$	—	$	23,178	$	—
Municipal securities	17,041		—		17,041		—
Corporate securities	70,008		—		69,956		52
Mortgage-backed securities	289		—		289		—
Asset-backed securities	125		—		125		—
Equity securities:
Common stock - publicly traded	42		42		—		—
Preferred stock - publicly traded	5,107		5,107		—		—
Common stock - non-publicly traded	58		—		—		58
Preferred stock - non-publicly traded	1,013		—		—		1,013
Short-term investments	1,222		1,222		—		—
Total Assets	$	118,083	$	6,371	$	110,589	$	1,123
Financial Liabilities:
Interest rate swap	$	4,338	$	—	$	4,338	$	—

The Company's financial assets and liabilities accounted for at fair value by level within the fair value hierarchy are as follows:

March 31, 2013			Fair Value Measurements Using:
			Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs
	Fair Value		(Level 1)		(Level 2)		(Level 3)
Financial Assets:
Fixed maturity securities:
Obligations of the U.S. Treasury and U.S. Government agencies	$	27,379	$	—	$	27,379	$	—
Municipal securities	18,777		—		18,777		—
Corporate securities	71,689		—		71,689		—
Mortgage-backed securities	196		—		196		—
Asset-backed securities	61		—		61		—
Equity securities:
Common stock - publicly traded	44		44		—		—
Preferred stock - publicly traded	6,186		6,186		—		—
Common stock - non-publicly traded	58		—		—		58
Preferred stock - non-publicly traded	1,013		—		—		1,013
Short-term investments	1,222		1,222		—		—
Total assets	$	126,625	$	7,452	$	118,102	$	1,071
Financial Liabilities:
Interest rate swap	$	4,029	$	—	$	4,029	$	—

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]

There were no transfers between Level 1 and Level 2 for the three months ended March 31, 2013. For the three months ended March 31, 2013, 1 corporate security was transferred from Level 3 to Level 2. This transfer occurred due to the availability of Level 2 pricing for the corporate security, which was unavailable in prior periods. The Company's use of Level 3 unobservable inputs included 6 individual securities that accounted for 0.8% of total investments at March 31, 2013. The Company utilized an independent third party pricing service to value 4 of the Level 3 securities. The value of 2 equity securities in Level 3, which are non-publicly traded preferred stocks, were calculated by the Company. One of the equity securities, with a value of $1.0 million was valued by taking into account the strength of the issuer's parent company guaranteeing the dividend of the issuer. The second Level 3 equity security, with a value of $13.0 thousand was valued by estimating the total value of the Class-A shares outstanding by the issuer and a review of the company's audited financial statements. At December 31, 2012, the Company had 7 individual securities valued under Level 3 that accounted for 1.0% of total investments.

The following table summarizes the changes in Level 3 assets measured at fair value:	For the Three Months Ended
	March 31, 2013			March 31, 2012
Beginning balance, January 1,	$	1,123		$	1,204
Total realized (unrealized) investment gains (losses):
Included in net income	—			—
Included in other comprehensive (loss)	(25		)	(22		)
Sales	—			(22		)
Transfers (out of) Level 3	(27		)	(1		)
Ending balance, March 31,	$	1,071		$	1,159

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2013

Accounting Policies [Abstract]

Nature of Operations [Text Block]

Nature of Operations

Fortegra Financial Corporation (traded on the New York Stock Exchange under the symbol: FRF), including its subsidiaries ("Fortegra" or the "Company"), is a diversified insurance services company headquartered in Jacksonville, Florida that provides distribution and administration services on a wholesale basis to insurance companies, insurance brokers and agents and other financial services companies primarily in the United States. In 2008, the Company changed its name from Life of the South Corporation to Fortegra Financial Corporation. The Company was incorporated in 1981 in the State of Georgia and re-incorporated in the State of Delaware in 2010. Most of the Company's business is generated through networks of small to mid-sized community and regional banks, small loan companies and automobile dealerships. The Company's majority-owned and controlled subsidiaries at March 31, 2013, are as follows:

• LOTS Intermediate Co. ("LOTS IM")

• Bliss and Glennon, Inc. ("B&G")

• CRC Reassurance Company, Ltd. ("CRC")

• Insurance Company of the South ("ICOTS")

• Life of the South Insurance Company ("LOTS") and its subsidiary, Bankers Life of Louisiana ("Bankers Life")

• LOTS Reassurance Company ("LOTS RE")

• LOTSolutions, Inc.

• Lyndon Southern Insurance Company ("Lyndon Southern")

• Southern Financial Life Insurance Company ("SFLAC"), 85% owned

• South Bay Acceptance Corporation ("South Bay")

• Continental Car Club, Inc. ("Continental")

• United Motor Club of America, Inc. ("United")

• Auto Knight Motor Club, Inc. ("Auto Knight")

• eReinsure.com, Inc. ("eReinsure")

• Pacific Benefits Group Northwest, LLC ("PBG")

• Magna Insurance Company ("Magna")

• Digital Leash, LLC, d/b/a ProtectCELL ("ProtectCELL"), 62.4% owned

• 4Warranty Corporation ("4Warranty")

• Response Indemnity Company of California ("RICC")

The Company operates in three business segments: (i) Payment Protection, (ii) Business Process Outsourcing ("BPO") and (iii) Brokerage. Payment Protection specializes in protecting lenders and their consumers from death, disability or other events that could otherwise impair their ability to repay a debt and also offers warranty and service contracts and motor club solutions. BPO provides an assortment of administrative services tailored to insurance and other financial services companies through a virtual insurance company platform. Brokerage uses a pure wholesale sell-through model to sell specialty casualty and surplus lines insurance and also provides web-hosted applications used by insurers, reinsurers and reinsurance brokers for the global reinsurance market.

Consolidation, Policy [Policy Text Block]

Principles of Consolidation

The Consolidated Financial Statements include the accounts of Fortegra Financial Corporation and its majority-owned and controlled subsidiaries. All material intercompany account balances and transactions have been eliminated. The third-party ownership of 15% of the common stock of SFLAC and 37.6% of the ownership interests of ProtectCELL have been reflected as non-controlling interests on the Consolidated Balance Sheets. At March 31, 2013, the non-controlling interest for ProtectCELL and SFLAC totaled $10.8 million and $0.5 million, respectively.

Income (loss) attributable to these non-controlling interests has been reflected on the Consolidated Statements of Income as income (loss) attributable to non-controlling interests and on the Consolidated Statements of Comprehensive Income as comprehensive income (loss) attributable to non-controlling interests.

Comprehensive Income, Policy [Policy Text Block]

Comprehensive Income (Loss)

Comprehensive income (loss) includes both net income and other items of comprehensive income comprised of unrealized gains and losses on investment securities classified as available-for-sale and unrealized gains and losses on the interest rate swap, net of the related tax effects.

Use of Estimates, Policy [Policy Text Block]

Use of Estimates

Preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Comparability of Prior Year Financial Data, Policy [Policy Text Block]

Reclassifications

Certain items in prior financial statements have been reclassified to conform to the current presentation, which had no impact on net income, comprehensive income or loss, net cash provided by operating activities or stockholders' equity.

Segment Reporting, Policy [Policy Text Block]

The Company conducts business through three business segments: (i) Payment Protection; (ii) BPO; and (iii) Brokerage. The revenue for each segment is presented to reflect the operating characteristics of the segment. The Company allocates certain revenues and expenses to the segments. These items consist primarily of corporate-related income, transaction related costs, executive stock compensation and other overhead expenses. Segment assets are not presented to the Company's chief operating decision maker for operational decision-making and therefore are not disclosed in the accompanying table.

The Company measures the profitability of its business segments with the allocation of Corporate revenues and expenses and without taking into account amortization, depreciation, interest expense and income taxes. The Company refers to this financial performance measure as segment EBITDA (earnings before interest, taxes, depreciation and amortization). The Company's financial measure of segment EBITDA meets the definition of a Non-GAAP financial measure and is not a recognized term under U.S. GAAP, nor is it an alternative to the U.S. GAAP financial measures presented in this Form 10-Q. The Non-GAAP financial measure in this Form 10-Q should be used in addition to, but not as a substitute for, the U.S. GAAP financial measures presented elsewhere in this Form 10-Q. The Company believes that this Non-GAAP financial measure provides useful information to management, analysts and investors regarding financial and business trends relating to the Company's results of operations and financial condition. The variability of the Company's segment EBITDA is significantly affected by segment net revenues because a large portion of the Company's operating expenses are fixed. The Company's industry peers may also provide similar supplemental Non-GAAP financial measures, although they may not use the same or comparable terminology and may not make identical adjustments. 

Subsequent Events, Policy [Policy Text Block]

Subsequent Events

The Company reviewed events subsequent to March 31, 2013 that occurred up to the date the Company's Consolidated Financial Statements were issued, and determined that no events required recognition or disclosure in these Consolidated Financial Statements and/or the notes thereto.

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Related Party Transactions

3 Months Ended

Mar. 31, 2013

Related Party Transactions [Abstract]

Related Party Transactions Disclosure [Text Block]

Related Party Transactions

In conjunction with the December 31, 2012 acquisition of ProtectCELL, the Company assumed an office space lease between ProtectCELL and 39500 High Pointe, LLC ("High Pointe"). The ownership of High Pointe includes three members who were the founding members of ProtectCELL and are now employees of the Company. The Company made lease payments to High Pointe for the three months ended March 31, 2013, which are reflected in the table below.

At December 31, 2012, ProtectCELL held a $6.1 million note receivable carrying an interest rate of 8.00% from High Pointe, which was fully secured by a mortgage on the office building owned by High Pointe. On March 15, 2013, ProtectCELL received $6.1 million from High Pointe, representing the full payoff of the outstanding balance of the note receivable.

An executive officer of ProtectCELL owns multiple wireless retail locations, which sell ProtectCELL protection plans to wireless retail customers. For the three months ended March 31, 2013, the Company recorded income and paid commissions for this related party arrangement, which are reflected in the table below.

In conjunction with the December 31, 2012 acquisition of 4Warranty, the Company assumed an office space lease between 4Warranty and Source International Incorporated ("Source"), effective January 1, 2013. The ownership of Source is comprised of two individuals who have consulting relationships with the Company. The Company paid lease payments to Source for the three months ended March 31, 2013, which are reflected in the table below.

In January 2012, the Company recorded a receivable due from an officer of the Company relating to the 2010 acquisition of South Bay Acceptance Corporation, which had a balance of $0.1 million at March 31, 2013 and December 31, 2012, respectively.

In December 2011, the Company entered into an information technology support services agreement (the "IT Agreement") with a company for which a member serving on the Company's Board of Directors also serves on the board of the company receiving the information support services. The IT Agreement has no set term and calls for a total of $0.3 million plus reimbursement of expenses to be received by the Company over the duration of the agreement. The Company recorded income from the IT Agreement during the three months ended March 31, 2012, which is reflected in the table below.

In December 2011, the Company entered into a marketing and referral agreement (the "Marketing Agreement") with a company in which a member serving on the Company's Board of Directors also serves on the board of the company providing the marketing services (the "Marketer"). The Marketing Agreement has a five year term and requires the Company to pay the Marketer a per account fee per month based on the number of enrolled customers the Marketer obtains for the Company. The Company did not make any payments to the Marketer during the three months ended March 31, 2013 or 2012, respectively.

The following table details the amounts recorded on the Company's Consolidated Balance Sheets and Consolidated Statements of Income resulting from related party transactions:

	For the Three Months Ended
	March 31, 2013		March 31, 2012
Income recorded by the Company from related parties	$	507	$	132
Related party interest income on notes receivable	$	21	$	—
Related party lease expense	$	123	$	—
Related party commissions paid	$	205	$	—
	At
	March 31, 2013		December 31, 2012
Notes receivable from related parties	$	134	$	6,269

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Other Intangible Assets Other Intangible Assets Rollforward (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Indefinite-lived Intangible Assets [Roll Forward]
Other Intangible Assets, Net	$ 79,340
Less: Amortization Expense	1,948	1,482
Other Intangible Assets, Net	77,767
Acquisition of 4Warranty [Member] [Member]
Indefinite-lived Intangible Assets [Roll Forward]
Other Intangible Assets, Net	1,900
Acquisition of Response Indemnity Company of California [Member]
Indefinite-lived Intangible Assets [Roll Forward]
Intangible assets acquired in 2013 - RICC acquisition	375
Other Intangible Assets, Net	$ 375

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Statutory Reporting and Insurance Subsidiaries Dividend Restrictions Level 3 (Tables)

3 Months Ended

Mar. 31, 2013

Statutory Reporting and Dividend Restrictions [Abstract]

Statutory Accounting Practices Disclosure [Table Text Block]

The Company's insurance subsidiaries may pay dividends to the Company, subject to statutory restrictions. Payments in excess of statutory restrictions (extraordinary dividends) to the Company are permitted only with prior approval of the insurance departments of the applicable state of domicile. All dividends from subsidiaries were eliminated in the Consolidated Financial Statements.

The following table sets forth the dividends paid to the Company by its insurance company subsidiaries for the following periods:

	For the Three Months Ended		For the Twelve Months Ended
	March 31, 2013		December 31, 2012
Ordinary dividends	$	231	$	2,783
Extraordinary dividends	—		—
Total dividends	$	231	$	2,783

The following table details the combined statutory capital and surplus of the Company's insurance subsidiaries, the required minimum statutory capital and surplus, as required by the laws of the states in which they are domiciled and the combined amount available for ordinary dividends of the Company's insurance subsidiaries for the following periods:

	At
	March 31, 2013		December 31, 2012
Combined statutory capital and surplus of the Company's insurance subsidiaries	$	61,181	$	53,885
Required minimum statutory capital and surplus	$	19,500	$	15,300
Amount available for ordinary dividends of the Company's insurance subsidiaries	$	4,228	$	4,500

Under the NAIC's Risk-Based Capital Act of 1995, a company's Risk-Based Capital ("RBC") is calculated by applying certain risk factors to various asset, claim and reserve items. If a company's adjusted surplus falls below calculated RBC thresholds, regulatory intervention or oversight is required. The Company's insurance subsidiaries' RBC levels, as calculated in accordance with the NAIC's RBC instructions, exceeded all RBC thresholds as of March 31, 2013 and December 31, 2012, respectively.

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Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2013

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

Earnings per share is calculated as follows:	For the Three Months Ended
	March 31, 2013		March 31, 2012
Numerator: (for both basic and diluted earnings per share)
Net income	$	2,493	$	3,414
Denominator:
Total average basic common shares outstanding	19,556,743		19,904,819
Effect of dilutive stock options and restricted stock awards	1,068,298		834,377
Total average diluted common shares outstanding	20,625,041		20,739,196
Earnings per share-basic	$	0.13	$	0.17
Earnings per share-diluted	$	0.12	$	0.16
Weighted average anti-dilutive common shares	402,132		378,927

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Consolidation of Operations Charges (Tables)

3 Months Ended

Mar. 31, 2013

Consolidation of Operations Charges [Abstract]

Schedule of Restructuring and Related Costs [Table Text Block]

	For the Three Months Ended
	March 31, 2013
Severance and benefit costs included in personnel expense	$	1,154
Total consolidation of operations costs	$	1,154

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Basis of Presentation

3 Months Ended

Mar. 31, 2013

Basis of Presentation and Significant Accounting Policies [Abstract]

Basis of Accounting [Text Block]

Basis of Presentation

The accompanying unaudited interim Consolidated Financial Statements of Fortegra have been prepared in conformity with generally accepted accounting principles in the United States of America ("U.S. GAAP") promulgated by the Financial Accounting Standards Board ("FASB"), Accounting Standards Codification ("ASC" or "the guidance") for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements and should be read in conjunction with the Company's Annual Report.

The interim financial statements in this Form 10-Q have not been audited. In the opinion of management, the accompanying unaudited interim financial information reflects all adjustments, including normal recurring adjustments necessary to present fairly Fortegra's financial position, results of operations, other comprehensive income and cash flows for each of the interim periods presented. The results of operations for the three months ended March 31, 2013 are not necessarily indicative of the results that may be expected for the full year ending on December 31, 2013.

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Variable Interest Entities (Tables)

3 Months Ended

Mar. 31, 2013

Variable Interest Entity, Not Primary Beneficiary, Disclosures [Abstract]

Schedule of Variable Interest Entities [Table Text Block]

The Company's maximum exposure to loss in the VIE is limited to the outstanding balance of the note receivable, which is presented in the table below:

	At
	March 31, 2013		December 31, 2012
The Company's maximum exposure to loss in the VIE	$	1,139	$	1,139

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Fair Value of Financial Instruments Level 4 Fair Value Assets and Liabilities Measured with Level 1,2,& 3 (Details) (USD $)	3 Months Ended
	Mar. 31, 2013 Securities	Dec. 31, 2012 Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value, Assets, Level 1 to Level 2 Transfers, Amount	$ 0
Fair Value, Liabilities, Level 1 to Level 2 Transfers, Amount	0
Fair Value, Assets, Level 2 to Level 1 Transfers, Amount	0
Fair Value, Liabilities, Level 2 to Level 1 Transfers, Amount	0
Number of Securities transferred from Level 3 to Level 2	1
Number of Level 3 Securities	6	7
Percent of Total Investments	0.80%	1.00%
Number of Level 3 Securities Priced by Third Party Service	4
Number of Level 3 Securities Priced Internally	2
Fixed Maturity Securities	118,102,000	110,641,000
Equity Securities	7,301,000	6,220,000
Short-term investments	1,222,000	1,222,000
Consideration of Parent Company Guarantee [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	1,000,000
Consideration of Issuer's Audited Financial Statements [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	13,000
Estimate of Fair Value, Fair Value Disclosure [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	1,222,000	1,222,000
Total Assets	126,625,000	118,083,000
Interest Rate Swap	4,029,000	4,338,000
Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	1,222,000	1,222,000
Total Assets	7,452,000	6,371,000
Interest Rate Swap	0	0
Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	0
Total Assets	118,102,000	110,589,000
Interest Rate Swap	4,029,000	4,338,000
Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	0	0
Total Assets	1,071,000	1,123,000
Interest Rate Swap	0	0
Obligations of the U.S. Treasury and U.S. Government agencies [Member}
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities	27,379,000	23,178,000
Obligations of the U.S. Treasury and U.S. Government agencies [Member} | Estimate of Fair Value, Fair Value Disclosure [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities	27,379,000
Obligations of the U.S. Treasury and U.S. Government agencies [Member} | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities	0
Obligations of the U.S. Treasury and U.S. Government agencies [Member} | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities	27,379,000
Obligations of the U.S. Treasury and U.S. Government agencies [Member} | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities	0
Asset-backed Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities	61,000	125,000
Asset-backed Securities [Member] | Estimate of Fair Value, Fair Value Disclosure [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities	61,000	125,000
Asset-backed Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities	0	0
Asset-backed Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities	61,000	125,000
Asset-backed Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities	0	0
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities	196,000	289,000
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member] | Estimate of Fair Value, Fair Value Disclosure [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities	196,000	289,000
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities	0	0
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities	196,000	289,000
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities	0	0
Corporate Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities	71,689,000	70,008,000
Corporate Securities [Member] | Estimate of Fair Value, Fair Value Disclosure [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities	71,689,000	70,008,000
Corporate Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities	0	0
Corporate Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities	71,689,000	69,956,000
Corporate Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities	0	52,000
Municipal Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities	18,777,000	17,041,000
Municipal Securities [Member] | Estimate of Fair Value, Fair Value Disclosure [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities	18,777,000	17,041,000
Municipal Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities	0	0
Municipal Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities	18,777,000	17,041,000
Municipal Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities	0	0
Common Stock [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities	44,000	42,000
Common Stock [Member] | Estimate of Fair Value, Fair Value Disclosure [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	44,000	42,000
Common Stock [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	44,000	42,000
Common Stock [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	0	0
Common Stock [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	0	0
Preferred Stock [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities	6,186,000	5,107,000
Preferred Stock [Member] | Estimate of Fair Value, Fair Value Disclosure [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	6,186,000	5,107,000
Preferred Stock [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	6,186,000	5,107,000
Preferred Stock [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	0	0
Preferred Stock [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	0	0
Common stock, non-publicly traded [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities	58,000	58,000
Common stock, non-publicly traded [Member] | Estimate of Fair Value, Fair Value Disclosure [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	58,000	58,000
Common stock, non-publicly traded [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	0	0
Common stock, non-publicly traded [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	0	0
Common stock, non-publicly traded [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	58,000	58,000
Preferred stock, non-publicly traded [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities	1,013,000	1,013,000
Preferred stock, non-publicly traded [Member] | Estimate of Fair Value, Fair Value Disclosure [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	1,013,000	1,013,000
Preferred stock, non-publicly traded [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	0	0
Preferred stock, non-publicly traded [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	0	0
Preferred stock, non-publicly traded [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	1,013,000	1,013,000
Obligations of the U.S. Treasury and U.S. Government agencies [Member} | Estimate of Fair Value, Fair Value Disclosure [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities		23,178,000
Obligations of the U.S. Treasury and U.S. Government agencies [Member} | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities		0
Obligations of the U.S. Treasury and U.S. Government agencies [Member} | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities		23,178,000
Obligations of the U.S. Treasury and U.S. Government agencies [Member} | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities		0
Share-based Compensation awards, performanced-based [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments		$ 0

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Derivative Financial Instruments - Interest Rate Swap Level 3 (Tables)

3 Months Ended

Mar. 31, 2013

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Cash Flow Hedging Instruments, Statements of Financial Performance and Financial Position, Location [Table Text Block]

The following table summarizes the fair value (including accrued interest) and related outstanding notional amounts of derivative instruments and indicates where within the Consolidated Balance Sheets each is reported:

	Balance Sheet Location	At
		March 31, 2013			December 31, 2012
Derivatives designated as cash flow hedging instruments:
Interest rate swap - notional value		$	35,000		$	35,000
Fair value of the Swap	Accrued expenses, accounts payable and other liabilities	$	(4,029	)	$	(4,338	)
Unrealized loss, net of tax, on the fair value of the Swap	AOCI	$	(2,619	)	$	(2,820	)
Variable rate of the interest rate swap		0.28		%	0.31		%
Fixed rate of the interest rate swap		3.47		%	3.47		%

Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss) [Table Text Block]

The following table summarizes the pretax impact of the interest rate swap designated as a cash flow hedge on the Consolidated Financial Statements for the following periods:

	For the Three Months Ended
	March 31, 2013		March 31, 2012
Gain (loss) recognized in AOCI on the derivative-effective portion	$	260	$	(70	)
Loss reclassified from AOCI into income-effective portion	$	49	$	—
Gain (loss) recognized in income on the derivative-ineffective portion	$	—	$	—

Schedule of Interest Rate Derivatives [Table Text Block]

The table below shows the estimated amount to be reclassified to earnings from AOCI during the next 12 months. These net losses reclassified into earnings are expected to primarily increase net interest expense related to the respective hedged item.

	At
	March 31, 2013
Estimated loss to be reclassified to earnings from AOCI during the next 12 months	$	1,118

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Goodwill (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Goodwill [Roll Forward]
Goodwill	$ 119,512	$ 119,512
Goodwill	119,512	119,512
Payment Protection [Member]
Goodwill [Roll Forward]
Goodwill	52,084	52,084
Goodwill	52,084	52,084
Business Process Outsourcing [Member]
Goodwill [Roll Forward]
Goodwill	12,970	12,970
Goodwill	12,970	12,970
Brokerage [Member]
Goodwill [Roll Forward]
Goodwill	54,458	54,458
Goodwill	$ 54,458	$ 54,458

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Stock-Based Compensation Options outstanding and exercisable, by exercise price and weighted average life (Details) (USD $)	3 Months Ended
	Mar. 31, 2013
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Option Shares Outstanding	2,362,294
Options Outstanding, Weighted Average Remaining Contractual Life	5 years 5 months 9 days
Options Outstanding, Weighted Average Exercise Price (in dollars per share)	$ 4.99
Options Exercisable, Option Shares Outstanding	1,698,682
Options Exercisable, Weighted Average Remaining Contractual Life	3 years 11 months 23 days
Options Exercisable, Weighted Average Exercise Price	$ 3.69
$3.03
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise Price (in dollars per share)	$ 3.03
Option Shares Outstanding	787,500
Options Outstanding, Weighted Average Remaining Contractual Life	2 years 7 months 17 days
Options Outstanding, Weighted Average Exercise Price (in dollars per share)	$ 3.03
Options Exercisable, Option Shares Outstanding	787,500
Options Exercisable, Weighted Average Remaining Contractual Life	2 years 7 months 17 days
Options Exercisable, Weighted Average Exercise Price	$ 3.03
$3.25
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise Price (in dollars per share)	$ 3.25
Option Shares Outstanding	757,963
Options Outstanding, Weighted Average Remaining Contractual Life	4 years 6 months 26 days
Options Outstanding, Weighted Average Exercise Price (in dollars per share)	$ 3.25
Options Exercisable, Option Shares Outstanding	757,963
Options Exercisable, Weighted Average Remaining Contractual Life	4 years 6 months 26 days
Options Exercisable, Weighted Average Exercise Price	$ 3.25
$7.84
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise Price (in dollars per share)	$ 7.84
Option Shares Outstanding	238,750
Options Outstanding, Weighted Average Remaining Contractual Life	8 years 3 months
Options Outstanding, Weighted Average Exercise Price (in dollars per share)	$ 7.84
Options Exercisable, Option Shares Outstanding	83,339
Options Exercisable, Weighted Average Remaining Contractual Life	8 years 3 months
Options Exercisable, Weighted Average Exercise Price	$ 7.84
$7.93
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise Price (in dollars per share)	$ 7.93
Option Shares Outstanding	15,000
Options Outstanding, Weighted Average Remaining Contractual Life	9 years 6 months
Options Outstanding, Weighted Average Exercise Price (in dollars per share)	$ 7.93
Options Exercisable, Option Shares Outstanding	0
Options Exercisable, Weighted Average Exercise Price	$ 0.00
$7.97
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise Price (in dollars per share)	$ 7.97
Option Shares Outstanding	110,000
Options Outstanding, Weighted Average Remaining Contractual Life	9 years 5 months 1 day
Options Outstanding, Weighted Average Exercise Price (in dollars per share)	$ 7.97
Options Exercisable, Option Shares Outstanding	0
Options Exercisable, Weighted Average Exercise Price	$ 0.00
$8.00
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise Price (in dollars per share)	$ 8.00
Option Shares Outstanding	170,000
Options Outstanding, Weighted Average Remaining Contractual Life	9 years 3 months
Options Outstanding, Weighted Average Exercise Price (in dollars per share)	$ 8.00
Options Exercisable, Option Shares Outstanding	0
Options Exercisable, Weighted Average Exercise Price	$ 0.00
$8.89
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise Price (in dollars per share)	$ 8.89
Option Shares Outstanding	194,813
Options Outstanding, Weighted Average Remaining Contractual Life	9 years 9 months 4 days
Options Outstanding, Weighted Average Exercise Price (in dollars per share)	$ 8.89
Options Exercisable, Option Shares Outstanding	0
Options Exercisable, Weighted Average Exercise Price	$ 0.00
$11.00
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise Price (in dollars per share)	$ 11.00
Option Shares Outstanding	88,268
Options Outstanding, Weighted Average Remaining Contractual Life	7 years 8 months 16 days
Options Outstanding, Weighted Average Exercise Price (in dollars per share)	$ 11.00
Options Exercisable, Option Shares Outstanding	69,880
Options Exercisable, Weighted Average Remaining Contractual Life	7 years 8 months 16 days
Options Exercisable, Weighted Average Exercise Price	$ 11.00

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Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Investments
Fixed maturity securities available-for-sale, at fair value (amortized cost of $114,695 at March 31, 2013 and $107,095 at December 31, 2012)	$ 118,102	$ 110,641
Equity securities available-for-sale, at fair value (cost of $7,082 at March 31, 2013 and $6,082 at December 31, 2012)	7,301	6,220
Short-term investments	1,222	1,222
Total investments	126,625	118,083
Cash and cash equivalents	14,339	15,209
Restricted cash	28,881	31,142
Accrued investment income	1,217	1,235
Notes receivable, net	5,045	11,290
Accounts and premiums receivable, net	33,883	27,026
Other receivables	28,189	13,511
Reinsurance receivables	196,907	203,988
Deferred acquisition costs	63,623	59,320
Property and equipment, net	17,621	17,946
Goodwill	119,512	119,512
Other intangible assets, net	77,767	79,340
Income Taxes Receivable	3,272	2,897
Other assets	8,554	7,667
Total assets	725,435	708,166
Liabilities:
Unpaid claims	34,155	33,007
Unearned premiums	225,288	235,900
Policyholder account balances	25,489	26,023
Accrued expenses, accounts payable and other liabilities	70,845	58,563
Deferred revenue	58,410	50,607
Note payable	91,750	89,438
Preferred trust securities	35,000	35,000
Deferred income taxes, net	29,792	28,658
Total liabilities	570,729	557,196
Commitments and Contingencies (Note 19)
Stockholders' Equity:
Preferred stock, par value $0.01; 10,000,000 shares authorized; none issued	0	0
Common stock, par value $0.01; 150,000,000 shares authorized; 20,850,531 and 20,710,370 shares issued at March 31, 2013 and December 31, 2012, respectively, including shares in treasury	208	207
Treasury stock, at cost; 1,024,212 shares at March 31, 2013 and December 31, 2012, respectively	(6,651)	(6,651)
Additional paid-in capital	97,945	97,641
Accumulated other comprehensive loss, net of tax	(468)	(631)
Retained earnings	52,310	49,817
Stockholders' equity before non-controlling interests	143,344	140,383
Non-controlling interests	11,362	10,587
Total stockholders' equity	154,706	150,970
Total liabilities and stockholders' equity	$ 725,435	$ 708,166

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Segment Results Level 3 (Tables)

3 Months Ended

Mar. 31, 2013

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment [Table Text Block]

The following table presents the Company's business segment results:

	For the Three Months Ended
	March 31, 2013			March 31, 2012
Segment Net Revenue
Payment Protection
Service and administrative fees	$	34,200		$	17,803
Ceding commission	7,163			7,064
Net investment income	909			743
Net realized investment gains (losses)	7			(3		)
Other income	91			72
Net earned premium	33,142			31,972
Net losses and loss adjustment expenses	(10,535		)	(11,266		)
Member benefit claims	(8,978		)	(1,303		)
Commissions	(35,362		)	(31,988		)
Total Payment Protection Net Revenue	20,637			13,094
BPO	4,214			4,205
Brokerage
Brokerage commissions and fees	9,731			9,520
Service and administrative fees	444			503
Total Brokerage	10,175			10,023
Total segment net revenue	35,026			27,322
Operating Expenses
Payment Protection	14,892			7,913
BPO	3,556			3,133
Brokerage	7,203			7,085
Corporate	—			—
Total operating expenses	25,651			18,131
EBITDA
Payment Protection	5,745			5,181
BPO	658			1,072
Brokerage	2,972			2,938
Corporate	—			—
Total EBITDA	9,375			9,191
Depreciation and Amortization
Payment Protection	1,775			849
BPO	834			503
Brokerage	657			868
Total depreciation and amortization	3,266			2,220
Interest Expense
Payment Protection	957			1,012
BPO	177			267
Brokerage	310			373
Total interest expense	1,444			1,652
Income (loss) before income taxes and non-controlling interests
Payment Protection	3,013			3,320
BPO	(353		)	302
Brokerage	2,005			1,697
Corporate	—			—
Total income before income taxes and non-controlling interests	4,665			5,319
Income taxes	1,354			1,887

	For the Three Months Ended
	March 31, 2013		March 31, 2012
Segment Net Revenue
Less: net income attributable to non-controlling interests	818		18
Net income	$	2,493	$	3,414

Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Table Text Block]

The following table reconciles segment information to the Company's Consolidated Statements of Income and provides a summary of other key financial information for each segment:

Reconciliation of Segment Net Revenue to Total Revenue and EBITDA to Net Income	For the Three Months Ended
	March 31, 2013		March 31, 2012
Segment Net Revenue
Payment Protection	$	20,637	$	13,094
BPO	4,214		4,205
Brokerage	10,175		10,023
Segment net revenues	35,026		27,322
Net losses and loss adjustment expenses	10,535		11,266
Member benefit claims	8,978		1,303
Commissions	35,362		31,988
Total segment revenue	89,901		71,879
Operating Expenses
Payment Protection	14,892		7,913
BPO	3,556		3,133
Brokerage	7,203		7,085
Corporate	—		—
Total operating expenses	25,651		18,131
Net losses and loss adjustment expenses	10,535		11,266
Member benefit claims	8,978		1,303
Commissions	35,362		31,988
Total operating expenses before depreciation, amortization and interest expense	80,526		62,688
EBITDA
Payment Protection	5,745		5,181
BPO	658		1,072
Brokerage	2,972		2,938
Corporate	—		—
Total EBITDA	9,375		9,191
Depreciation and amortization
Payment Protection	1,775		849
BPO	834		503
Brokerage	657		868
Total depreciation and amortization	3,266		2,220
Interest Expense
Payment Protection	957		1,012
BPO	177		267
Brokerage	310		373

Reconciliation of Segment Net Revenue to Total Revenue and EBITDA to Net Income	For the Three Months Ended
	March 31, 2013			March 31, 2012
Segment Net Revenue
Total interest expense	1,444			1,652
Income (loss) before income taxes and non-controlling interests
Payment Protection	3,013			3,320
BPO	(353		)	302
Brokerage	2,005			1,697
Corporate	—			—
Total income before income taxes and non-controlling interests	4,665			5,319
Income taxes	1,354			1,887
Less: net income attributable to non-controlling interests	818			18
Net income	$	2,493		$	3,414

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Consolidated Statements of Stockholders' Equity (USD $) In Thousands, except Share data, unless otherwise specified	Total	Common Stock [Member]	Treasury Stock [Member]	Additional Paid-in Capital [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Retained Earnings [Member]	Noncontrolling Interests [Member]
Balance, at Dec. 31, 2012	$ 150,970	$ 207	$ (6,651)	$ 97,641	$ (631)	$ 49,817	$ 10,587
Balance, Shares at Dec. 31, 2012		20,710,370
Treasury Stock, Shares at Dec. 31, 2012			(1,024,212)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	3,311					2,493	818
Other comprehensive income (loss)	163				163		0
Stock-based compensation, shares		139,937
Stock-based compensation	303	1		302
Direct stock awards to employees		224
Stock Issued During Period, Shares, Direct Stock Awards	2	0		2
Dividends	(43)						(43)
Balance, at Mar. 31, 2013	$ 154,706	$ 208	$ (6,651)	$ 97,945	$ (468)	$ 52,310	$ 11,362
Balance, Shares at Mar. 31, 2013	20,850,531	20,850,531
Treasury Stock, Shares at Mar. 31, 2013	(1,024,212)		(1,024,212)

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Investments Restricted Investments (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Investments [Abstract]
Fair value of restricted investments for special deposits required by state insurance departments	$ 12,491	$ 10,988
Fair value of restricted investments in trust pursuant to reinsurance agreements	6,967	6,954
Fair Value of restricted investments	$ 19,458	$ 17,942

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Goodwill (Tables)

3 Months Ended

Mar. 31, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill [Table Text Block]

	Payment Protection		BPO		Brokerage		Total
Balance at December 31, 2012	$	52,084	$	12,970	$	54,458	$	119,512
Balance at March 31, 2013	$	52,084	$	12,970	$	54,458	$	119,512

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Reinsurance Receivables Premiums, Direct and Assumed, Ceded (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Reinsurance Disclosures [Abstract]
Direct and Assumed, Premiums Written	$ 81,510	$ 79,189
Direct and Assume Premiums Earned	92,122	86,058
Ceded Premiums Written	(50,676)	(46,231)
Ceded Premiums Earned	(58,980)	(54,086)
Premiums Written, Net	30,834	32,958
Net earned premium	$ 33,142	$ 31,972

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Stock-Based Compensation

3 Months Ended

Mar. 31, 2013

Stock-based compensation [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

Stock-Based Compensation

Stock Options

During the three months ended March 31, 2013, the Company granted 228,981 performance-based stock options under the Company's Long-Term Incentive Plan ("LTIP").The performance-based awards will vest, if at all, should the Company achieve three-year performance goals on or before December 31, 2015 for (i) net revenue (Compound Annual Growth Rate), (ii) earnings growth (Net Income) and (iii) profitable growth (Return on Average Equity). The performance metrics are equally weighted such that achievement of any one target results in vesting of one-third of the total equity award. If any of the target(s) are not attained by December 31, 2015, the one-third portion(s) of the award associated with the unattained target(s) will be canceled.

A summary of the Company's time- and performance-based stock option activity for the three months ended March 31, 2013 is presented below:

	Time-Based							Performance-Based
	Options Outstanding		Weighted Average Exercise Price		Options Exercisable	Weighted Average Exercise Price		Options Outstanding		Weighted Average Exercise Price		Options Exercisable	Weighted Average Exercise Price
Balance, December 31, 2012	2,016,231		$	4.38	1,690,040	$	3.66	185,000		$	8.00	—	$	—
Granted	—		—		—	—		228,981		8.89		—	—
Vested	—		—		8,642	9.86		—		—		—	—
Exercised	—		—		—	—		—		—		—	—
Canceled/forfeited	(18,750	)	7.84		—	—		(49,168	)	8.62		—	—
Balance, March 31, 2013	1,997,481		$	4.35	1,698,682	$	3.69	364,813		$	8.48	—	$	—
Weighted average remaining contractual term at March 31, 2013 (in years)	4.7				4.0			9.5				0

The following presents the Company's outstanding and exercisable time- and performance-based stock options by exercise price at March 31, 2013:

	Options Outstanding				Options Exercisable
Exercise Price	Option Shares Outstanding	Weighted Average Remaining Contractual Life (years)	Weighted Average Exercise Price		Option Shares Outstanding	Weighted Average Remaining Contractual Life (years)	Weighted Average Exercise Price
$3.03	787,500	2.63	$	3.03	787,500	2.63	$	3.03
3.25	757,963	4.57	3.25		757,963	4.57	3.25
7.84	238,750	8.25	7.84		83,339	8.25	7.84
7.93	15,000	9.50	7.93		—	—	—
7.97	110,000	9.42	7.97		—	—	—
8.00	170,000	9.25	8.00		—	—	—
8.89	194,813	9.76	8.89		—	—	—
11.00	88,268	7.71	11.00		69,880	7.71	11.00
Totals	2,362,294	5.44	$	4.99	1,698,682	3.98	$	3.69

Information on time- and performance-based stock options, vested and expected to vest, is as follows:	At
	March 31, 2013
Number of shares vested and expected to vest	2,327,362
Weighted average remaining contractual life (in years)	5.38
Weighted average exercise price per option (in dollars)	$	4.94
Intrinsic value	$	9,115

The weighted average assumptions used to estimate the fair values of all stock options granted is as follows:

	For the Three Months Ended
	March 31, 2013
Expected term (years)	8.83
Expected volatility	31.87	%
Expected dividends	—	%
Risk-free rate	1.54	%

Restricted Stock Awards

During the three months ended March 31, 2013, the Company granted 76,326 performance-based restricted stock awards under the LTIP. The performance-based restricted stock awards will vest based on the same criteria as the performance based stock options described in the above section titled, "Stock Options.".

In addition, during the three months ended March 31, 2013, the Company granted a total of 75,000 time-based restricted stock awards, equally distributed, to five of its Directors. The restricted stock vests equally on each of the three anniversaries of the grant date.

A summary of the Company's time- and performance-based restricted stock award activity for the three months ended March 31, 2013 is presented below:

	Time-Based				Performance-Based
	Shares		Weighted Average Grant Date Fair Value		Shares		Weighted Average Grant Date Fair Value
Shares outstanding at December 31, 2012	103,000		$	8.00	80,861		$	11.00
Granted	75,000		9.53		76,326		8.89
Vested	(20,000	)	7.24		—		—
Forfeited	—		—		(11,389	)	8.89
Shares outstanding at March 31, 2013	158,000		$	8.82	145,798		$	10.06

Stock-based Compensation Expense

Total time- and performance-based stock-based compensation expense and the related income tax (benefit), as recognized on the Consolidated Statements of Income, is as follows:

	For the Three Months Ended
	March 31, 2013			March 31, 2012
Personnel costs	$	184		$	120
Other operating expenses	118			59
Income tax benefit	(116		)	(68		)
Net stock-based compensation expense	$	186		$	111

Additional information on total non-vested stock-based compensation is as follows:	At
	March 31, 2013
	Stock Options		Restricted Stock Awards
Unrecognized compensation cost related to non-vested awards	$	973	$	1,544
Weighted-average recognition period (in years)	3.9		5.3

XML

Other Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2013

Other Intangible Assets [Abstract]

Schedule of Acquired Finite-Lived Intangible Assets by Major Class [Table Text Block]

The following table presents finite-lived other intangible assets and their respective amortization periods:

				March 31, 2013							December 31, 2012
	Amortization Period (Years)			Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Finite-lived other intangible assets:
Customer and agent relationships	5	to	15	$	57,780	$	(13,822	)	$	43,958	$	57,780	$	(12,340	)	$	45,440
Software	5	to	10	10,118		(3,723		)	6,395		10,118		(3,385		)	6,733
Present value of future profits	0.3	to	0.75	548		(548		)	—		548		(548		)	—
Non-compete agreements	1.5	to	6	5,008		(2,844		)	2,164		5,008		(2,716		)	2,292
Total finite-lived other intangible assets				$	73,454	$	(20,937	)	$	52,517	$	73,454	$	(18,989	)	$	54,465

Schedule of Indefinite-Lived Intangible Assets [Table Text Block]

The following table presents the carrying amount of indefinite-lived other intangible assets:	At
	March 31, 2013		December 31, 2012
Tradenames	$	24,875	$	24,875
Licenses	375		—
Total	$	25,250	$	24,875

Schedule of Finite-Lived Intangible Assets [Table Text Block]

Changes in other intangible assets are as follows:
Balance at December 31, 2012	$	79,340
Intangible assets acquired in 2013 - RICC acquisition	375
Less: Amortization expense	1,948
Balance at March 31, 2013	$	77,767

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block]

Estimated amortization of finite-lived other intangible assets for the next five years and thereafter ending December 31 is presented below:

Remainder of 2013	$	5,824
2014	7,760
2015	7,753
2016	7,128
2017	5,781
Thereafter	18,271
Total	$	52,517

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Fair Value of Financial Instruments

3 Months Ended

Mar. 31, 2013

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

Fair Value of Financial Instruments 

The carrying and fair values of financial instruments are as follows:	At
	March 31, 2013				December 31, 2012
	Carrying Value		Fair Value		Carrying Value		Fair Value
Financial assets:
Cash and cash equivalents	$	14,339	$	14,339	$	15,209	$	15,209
Fixed maturity securities:
Obligations of the U.S. Treasury and U.S. Government agencies	27,379		27,379		23,178		23,178
Municipal securities	18,777		18,777		17,041		17,041
Corporate securities	71,689		71,689		70,008		70,008
Mortgage-backed securities	196		196		289		289
Asset-backed securities	61		61		125		125
Equity securities:
Common stock - publicly traded	44		44		42		42
Preferred stock - publicly traded	6,186		6,186		5,107		5,107
Common stock - non-publicly traded	58		58		58		58
Preferred stock - non-publicly traded	1,013		1,013		1,013		1,013
Notes receivable	5,045		5,045		11,290		11,290
Accounts and premiums receivable, net	33,883		33,883		27,026		27,026
Other receivables	28,189		28,189		13,511		13,511
Short-term investments	1,222		1,222		1,222		1,222
Total financial assets	$	208,081	$	208,081	$	185,119	$	185,119
Financial liabilities:
Notes payable	$	91,750	$	91,750	$	89,438	$	89,438
Preferred trust securities	35,000		35,000		35,000		35,000
Interest rate swap	4,029		4,029		4,338		4,338
Total financial liabilities	$	130,779	$	130,779	$	128,776	$	128,776

The Company's financial assets and liabilities accounted for at fair value by level within the fair value hierarchy are as follows:

March 31, 2013			Fair Value Measurements Using:
			Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs
	Fair Value		(Level 1)		(Level 2)		(Level 3)
Financial Assets:
Fixed maturity securities:
Obligations of the U.S. Treasury and U.S. Government agencies	$	27,379	$	—	$	27,379	$	—
Municipal securities	18,777		—		18,777		—
Corporate securities	71,689		—		71,689		—
Mortgage-backed securities	196		—		196		—
Asset-backed securities	61		—		61		—
Equity securities:
Common stock - publicly traded	44		44		—		—
Preferred stock - publicly traded	6,186		6,186		—		—
Common stock - non-publicly traded	58		—		—		58
Preferred stock - non-publicly traded	1,013		—		—		1,013
Short-term investments	1,222		1,222		—		—
Total assets	$	126,625	$	7,452	$	118,102	$	1,071
Financial Liabilities:
Interest rate swap	$	4,029	$	—	$	4,029	$	—

At December 31, 2012			Fair Value Measurements Using:
			Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs
	Fair Value		(Level 1)		(Level 2)		(Level 3)
Financial Assets:
Fixed maturity securities:
Obligations of the U.S. Treasury and U.S. Government agencies	$	23,178	$	—	$	23,178	$	—
Municipal securities	17,041		—		17,041		—
Corporate securities	70,008		—		69,956		52
Mortgage-backed securities	289		—		289		—
Asset-backed securities	125		—		125		—
Equity securities:
Common stock - publicly traded	42		42		—		—
Preferred stock - publicly traded	5,107		5,107		—		—
Common stock - non-publicly traded	58		—		—		58
Preferred stock - non-publicly traded	1,013		—		—		1,013
Short-term investments	1,222		1,222		—		—
Total Assets	$	118,083	$	6,371	$	110,589	$	1,123
Financial Liabilities:
Interest rate swap	$	4,338	$	—	$	4,338	$	—

There were no transfers between Level 1 and Level 2 for the three months ended March 31, 2013. For the three months ended March 31, 2013, 1 corporate security was transferred from Level 3 to Level 2. This transfer occurred due to the availability of Level 2 pricing for the corporate security, which was unavailable in prior periods. The Company's use of Level 3 unobservable inputs included 6 individual securities that accounted for 0.8% of total investments at March 31, 2013. The Company utilized an independent third party pricing service to value 4 of the Level 3 securities. The value of 2 equity securities in Level 3, which are non-publicly traded preferred stocks, were calculated by the Company. One of the equity securities, with a value of $1.0 million was valued by taking into account the strength of the issuer's parent company guaranteeing the dividend of the issuer. The second Level 3 equity security, with a value of $13.0 thousand was valued by estimating the total value of the Class-A shares outstanding by the issuer and a review of the company's audited financial statements. At December 31, 2012, the Company had 7 individual securities valued under Level 3 that accounted for 1.0% of total investments.

The following table summarizes the changes in Level 3 assets measured at fair value:	For the Three Months Ended
	March 31, 2013			March 31, 2012
Beginning balance, January 1,	$	1,123		$	1,204
Total realized (unrealized) investment gains (losses):
Included in net income	—			—
Included in other comprehensive (loss)	(25		)	(22		)
Sales	—			(22		)
Transfers (out of) Level 3	(27		)	(1		)
Ending balance, March 31,	$	1,071		$	1,159

XML

Reinsurance Receivables Reinsurer concentration of Credit Risk (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items]
Reinsurance receivables	$ 196,907	$ 203,988
Three unrelated reinsurers [Member]
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items]
Reinsurance receivables	$ 125,707	$ 126,633

XML

Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Operating Activities
Net Income	$ 2,493	$ 3,414
Adjustments to reconcile net income to net cash flows provided by operating activities:
Change in deferred acquisition costs	(4,303)	2,922
Depreciation and amortization	3,266	2,220
Deferred income tax expense	1,046	(64)
Net realized investment (gains) losses	(7)	3
Stock-based compensation expense	303	179
Direct stock awards to employees	2	0
Amortization of premiums and accretions of discounts on investments	350	312
Non-controlling interests	818	18
Change in allowance for doubtful accounts	11	544
Changes in operating assets and liabilities, net of the effects of acquisitions and dispositions:
Accrued investment income	56	2
Accounts and premiums receivable, net	(6,868)	(11,557)
Other receivables	(14,678)	(7,694)
Reinsurance receivables	7,281	8,319
Income Taxes Receivable	(375)	0
Other assets	(887)	234
Unpaid claims	948	(86)
Unearned premiums	(10,612)	(6,870)
Policyholder account balances	(534)	(475)
Accrued expenses, accounts payable and other liabilities	12,592	6,792
Income Taxes Payable	0	40
Deferred revenue	7,803	(3,055)
Net cash flows provided by (used in) operating activities	(1,295)	(4,802)
Investing Activities:
Proceeds from maturities, calls and prepayments of available-for-sale investments	3,332	1,697
Proceeds from sales of available-for-sale investments	412	2,050
Net change in short-term investments	0	100
Purchases of available-for-sale investments	(10,199)	(5,236)
Purchases of property and equipment	(993)	(1,800)
Net paid for acquisitions of subsidiaries, net of cash received	(2,902)	0
Net proceeds (issuance) from notes receivable	110	(199)
Repayment of Notes Receivable from Related Parties	6,135	0
Change in restricted cash, net of restricted cash received from acquisitions	2,261	(4,779)
Net cash flows (used in) provided by investing activities	(1,844)	(8,167)
Financing activities
Payments on notes payable	(8,188)	(23,000)
Proceeds from notes payable	10,500	24,700
Repurchase of shares of common stock	0	1,394
Dividends paid to non-controlling interests	43	0
Net cash flows (used in) provided by financing activities	2,269	306
Net (decrease) increase in cash and cash equivalents	(870)	(12,663)
Cash and cash equivalents, beginning of period	$ 15,209	$ 31,339

XML

Consolidated Balance Sheets (Parentheticals) (USD $) In Thousands, except Share data, unless otherwise specified	Mar. 31, 2013	Mar. 31, 2012
Investments
Fixed maturity securities available-for-sale amortized cost basis	$ 114,695	$ 107,095
Equity securities available-for-sale amortized cost basis	$ 7,082	$ 6,082
Stockholders' Equity:
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	150,000,000	150,000,000
Common stock, shares issued	20,850,531	20,710,370
Common stock, shares outstanding	20,850,531	20,710,370
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Treasury stock, shares	1,024,212	1,024,212

XML

Other Intangible Assets

3 Months Ended

Mar. 31, 2013

Other Intangible Assets [Abstract]

Intangible Assets Disclosure [Text Block]

Other Intangible Assets

The following table presents finite-lived other intangible assets and their respective amortization periods:

				March 31, 2013							December 31, 2012
	Amortization Period (Years)			Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Finite-lived other intangible assets:
Customer and agent relationships	5	to	15	$	57,780	$	(13,822	)	$	43,958	$	57,780	$	(12,340	)	$	45,440
Software	5	to	10	10,118		(3,723		)	6,395		10,118		(3,385		)	6,733
Present value of future profits	0.3	to	0.75	548		(548		)	—		548		(548		)	—
Non-compete agreements	1.5	to	6	5,008		(2,844		)	2,164		5,008		(2,716		)	2,292
Total finite-lived other intangible assets				$	73,454	$	(20,937	)	$	52,517	$	73,454	$	(18,989	)	$	54,465

The following table presents the carrying amount of indefinite-lived other intangible assets:	At
	March 31, 2013		December 31, 2012
Tradenames	$	24,875	$	24,875
Licenses	375		—
Total	$	25,250	$	24,875

Changes in other intangible assets are as follows:
Balance at December 31, 2012	$	79,340
Intangible assets acquired in 2013 - RICC acquisition	375
Less: Amortization expense	1,948
Balance at March 31, 2013	$	77,767

Estimated amortization of finite-lived other intangible assets for the next five years and thereafter ending December 31 is presented below:

Remainder of 2013	$	5,824
2014	7,760
2015	7,753
2016	7,128
2017	5,781
Thereafter	18,271
Total	$	52,517

XML

Document and Entity Information	3 Months Ended
	Mar. 31, 2013	Apr. 30, 2013
Document Information [Line Items]
Entity Registrant Name	Fortegra Financial Corp
Entity Central Index Key	0001495925
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Document Type	10-Q
Document Period End Date	Mar. 31, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	FY
Amendment Flag	false
Entity Common Stock, Shares Outstanding		19,832,569
Entity well known seasoned issuer	No
Entity voluntary filer	No
Entity current reporting status	Yes

XML

Investments

3 Months Ended

Mar. 31, 2013

Investments [Abstract]

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

Investments

The following table summarizes the Company's available-for-sale fixed maturity and equity securities at:

	March 31, 2013
Description of Security	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Obligations of the U.S. Treasury and U.S. Government agencies	$	26,779	$	654	$	(54	)	$	27,379
Municipal securities	18,407		399		(29		)	18,777
Corporate securities	69,254		2,585		(150		)	71,689
Mortgage-backed securities	195		1		—			196
Asset-backed securities	60		1		—			61
Total fixed maturity securities	$	114,695	$	3,640	$	(233	)	$	118,102
Common stock - publicly traded	$	39	$	5	$	—		$	44
Preferred stock - publicly traded	5,975		212		(1		)	6,186
Common stock - non-publicly traded	59		4		(5		)	58
Preferred stock - non-publicly traded	1,009		4		—			1,013
Total equity securities	$	7,082	$	225	$	(6	)	$	7,301

	December 31, 2012
Description of Security	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Obligations of the U.S. Treasury and U.S. Government agencies	$	22,424	$	761	$	(7	)	$	23,178
Municipal securities	16,636		413		(8		)	17,041
Corporate securities	67,627		2,461		(80		)	70,008
Mortgage-backed securities	285		4		—			289
Asset-backed securities	123		2		—			125
Total fixed maturity securities	$	107,095	$	3,641	$	(95	)	$	110,641
Common stock - publicly traded	$	39	$	3	$	—		$	42
Preferred stock - publicly traded	4,975		133		(1		)	5,107
Common stock - non-publicly traded	59		4		(5		)	58
Preferred stock - non-publicly traded	1,009		4		—			1,013
Total equity securities	$	6,082	$	144	$	(6	)	$	6,220

Pursuant to certain reinsurance agreements and statutory licensing requirements, the Company has deposited invested assets in custody accounts or insurance department safekeeping accounts. The Company is not permitted to remove invested assets from these accounts without prior approval of the contractual party or regulatory authority. The following table details the Company's restricted investments:

	At
	March 31, 2013		December 31, 2012
Fair value of restricted investments for special deposits required by state insurance departments	$	12,491	$	10,988
Fair value of restricted investments in trust pursuant to reinsurance agreements	6,967		6,954
Fair value of restricted investments	$	19,458	$	17,942

The amortized cost and fair value of fixed maturity securities by contractual maturity are shown below. Expected maturities will differ from contractual maturities because borrowers have the right to call or prepay obligations with or without call or prepayment penalties.

	At
	March 31, 2013				December 31, 2012
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	5,456	$	5,512	$	5,557	$	5,608
Due after one year through five years	65,641		67,823		58,378		60,323
Due after five years through ten years	24,490		25,197		24,983		25,900
Due after ten years	18,853		19,313		17,769		18,396
Mortgage-backed securities	195		196		285		289
Asset-backed securities	60		61		123		125
Total fixed maturity securities	$	114,695	$	118,102	$	107,095	$	110,641

The following table provides information on unrealized losses on investment securities that have been in an unrealized loss position for less than twelve months, and twelve months or greater at:

	March 31, 2013
	Less than Twelve Months						Twelve Months or Greater						Total
Description of Security	Fair Value		Unrealized Losses			# of Securities	Fair Value		Unrealized Losses			# of Securities	Fair Value		Unrealized Losses			# of Securities
Obligations of the U.S. Treasury and U.S. Government agencies	$	4,798	$	(54	)	16	$	—	$	—		—	$	4,798	$	(54	)	16
Municipal securities	3,315		(29		)	9	—		—			—	3,315		(29		)	9
Corporate securities	10,065		(130		)	13	180		(20		)	1	10,245		(150		)	14
Total fixed maturity securities	$	18,178	$	(213	)	38	$	180	$	(20	)	1	$	18,358	$	(233	)	39
Preferred stock - publicly traded	500		(1		)	1	—		—			—	500		(1		)	1
Common stock - non-publicly traded	—		—			—	39		(5		)	2	39		(5		)	2
Total equity securities	$	500	$	(1	)	1	$	39	$	(5	)	2	$	539	$	(6	)	3

	December 31, 2012
	Less than Twelve Months						Twelve Months or Greater						Total
Description of Security	Fair Value		Unrealized Losses			# of Securities	Fair Value		Unrealized Losses			# of Securities	Fair Value		Unrealized Losses			# of Securities
Obligations of the U.S. Treasury and U.S. Government agencies	$	857	$	(7	)	11	$	—	$	—		—	$	857	$	(7	)	11
Municipal securities	734		(8		)	1	—		—			—	734		(8		)	1
Corporate securities	12,625		(63		)	16	183		(17		)	1	12,808		(80		)	17
Total fixed maturity securities	$	14,216	$	(78	)	28	$	183	$	(17	)	1	$	14,399	$	(95	)	29
Preferred stock - publicly traded	198		(1		)	1	—		—			—	198		(1		)	1
Common stock - non-publicly traded	—		—			—	39		(5		)	2	39		(5		)	2
Total equity securities	$	198	$	(1	)	1	$	39	$	(5	)	2	$	237	$	(6	)	3

The Company does not intend to sell the investments that are in an unrealized loss position at March 31, 2013 and it is more likely than not that the Company will be able to hold these securities until full recovery of their amortized cost basis for fixed maturity securities or cost for equity securities. As of March 31, 2013, based on the Company's quarterly review, none of the fixed maturity or equity securities were deemed to be other-than-temporarily impaired based on the Company's analysis of the securities and intent to hold the securities until recovery.

The following table summarizes the gross proceeds from the sale of available-for-sale investment securities:

	For the Three Months Ended
	March 31, 2013		March 31, 2012
Gross proceeds from sales	$	412	$	2,050

The following table summarizes the gross realized gains and gross realized losses for both fixed maturity and equity securities and realized losses for other-than-temporary impairments for available-for-sale investment securities:

	For the Three Months Ended
	March 31, 2013		March 31, 2012
Gross realized gains	$	7	$	1
Gross realized losses	—		(4		)
Total net gains from investment sales	7		(3		)
Impairment write-downs (other-than-temporary impairments)	—		—
Net realized investment gains	$	7	$	(3	)

The following schedule details the components of net investment income:	For the Three Months Ended
	March 31, 2013			March 31, 2012
Fixed income securities	$	743		$	685
Cash on hand and on deposit	20			51
Common and preferred stock dividends	76			26
Notes receivable	72			63
Other income	114			35
Investment expenses	(116		)	(117		)
Net investment income	$	909		$	743

XML

Income Taxes Net Operating Loss (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2013
Income Tax Disclosure [Abstract]
Operating Loss Carryforwards	$ 0.5
Operating Loss Carryforwards, Expiration Dates	2019

XML

Consolidated Statements of Income (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Revenues
Service and administrative fees	$ 38,858	$ 22,511
Brokerage commissions and fees	9,731	9,520
Ceding commission	7,163	7,064
Net investment income	909	743
Net realized investment gains (losses)	7	(3)
Net earned premium	33,142	31,972
Other income	91	72
Total revenues	89,901	71,879
Expenses:
Net losses and loss adjustment expenses	10,535	11,266
Member benefit claims	8,978	1,303
Commissions	35,362	31,988
Personnel costs	15,846	11,392
Other operating expenses	9,805	6,739
Depreciation and amortization	1,318	738
Amortization of intangibles	1,948	1,482
Interest expense	1,444	1,652
Total expenses	85,236	66,560
Income before income taxes and non-controlling interests	4,665	5,319
Income taxes	1,354	1,887
Income before non-controlling interest	3,311	3,432
Less: net income attributable to non-controlling interests	818	18
Net Income	$ 2,493	$ 3,414
Earnings per share:
Basic	$ 0.13	$ 0.17
Diluted	$ 0.12	$ 0.16
Weighted average common shares outstanding:
Basic	19,556,743	19,904,819
Diluted	20,625,041	20,739,196

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Consolidation of Operations Charges (Notes)

3 Months Ended

Mar. 31, 2013

Consolidation of Operations Charges [Abstract]

Restructuring and Related Activities Disclosure [Text Block]

Consolidation of Operations Charges

Consolidation of Operations Plan

As disclosed on January 18, 2013 in the Company's Current Report on Form 8-K, effective January 14, 2013, the Company committed to a plan to consolidate the Company's fulfillment, claims administration and information technology functions for all of its insurance related products (the "Plan"). Prior to the Plan, such functions resided in the Company's individual business units. The decision is part of the Company's efforts to streamline its operations, focus its resources and provide first in class service to its customers. The following is a summary of the charges incurred by the Company:

	For the Three Months Ended
	March 31, 2013
Severance and benefit costs included in personnel expense	$	1,154
Total consolidation of operations costs	$	1,154

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Earnings Per Share

3 Months Ended

Mar. 31, 2013

Earnings Per Share [Abstract]

Earnings Per Share [Text Block]

Earnings Per Share

Earnings per share is calculated as follows:	For the Three Months Ended
	March 31, 2013		March 31, 2012
Numerator: (for both basic and diluted earnings per share)
Net income	$	2,493	$	3,414
Denominator:
Total average basic common shares outstanding	19,556,743		19,904,819
Effect of dilutive stock options and restricted stock awards	1,068,298		834,377
Total average diluted common shares outstanding	20,625,041		20,739,196
Earnings per share-basic	$	0.13	$	0.17
Earnings per share-diluted	$	0.12	$	0.16
Weighted average anti-dilutive common shares	402,132		378,927

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Income Taxes

3 Months Ended

Mar. 31, 2013

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

Income Taxes

Income taxes for interim periods have been computed using an estimated annual effective tax rate. This rate is revised, if necessary,

at the end of each successive interim period to reflect the current estimate of the annual effective tax rate.

The provision for income taxes consisted of the following:	For the Three Months Ended
	March 31, 2013		March 31, 2012
Current	$	308	$	1,951
Deferred	1,046		(64		)
Income taxes	$	1,354	$	1,887

The reconciliation of the income tax expense at the federal statutory income tax rate of 35% is as follows:

	For the Three Months Ended
	March 31, 2013					March 31, 2012
	Amount			Percent of Pre-tax Income		Amount			Percent of Pre-tax Income
Income taxes at federal income tax rate	$	1,632		35.00	%	$	1,862		35.00	%
Effect of:
Small life deduction	(109		)	(2.34	)	(114		)	(2.14	)
Non-deductible expenses	26			0.56		47			0.88
Tax exempt interest	(31		)	(0.67	)	(33		)	(0.62	)
State taxes	170			3.64		126			2.37
Prior year tax true-up	—			—		(1		)	(0.01	)
Non-controlling interest	(286		)	(6.14	)	—			—
Other, net	(48		)	(1.02	)	—			—
Income taxes	$	1,354		29.03	%	$	1,887		35.48	%

The Company's majority-owned subsidiary, ProtectCELL, is taxed as a partnership, therefore, the non-controlling interest is recorded on a pre-tax basis, and the tax effect is shown in the income tax rate reconciliation in the above table. The Company records tax balances only on its ownership interest in ProtectCELL.

At December 31, 2012, the Company had a net operating loss carry forward of $0.5 million, which is subject to certain limitations under Internal Revenue Code ("IRC") Section 382 and will begin to expire in 2019. The Company expects full utilization of the net operating loss carryforward by the end of 2013.

In addition, the Company has research and experimentation (research) tax credit carry forwards for federal and state income tax purposes in the amount of $0.5 million and $0.2 million, respectively. The federal research credit is also subject to certain limitations under IRC Section 382. The research credit carry forwards will begin to expire in 2019. As part of the valuation determinations of the subsidiary in which the research credit was generated, the Company recorded a $0.2 million liability against the research credit carryforward deferred tax asset.

The Company has reviewed its uncertain tax positions and management has concluded that there are no additional amounts required to be recorded in accordance with ASC 740-10.

As of December 31, 2012, the Company was under examination by the Internal Revenue Service ("IRS") for the 2009 and 2010 tax years. In February 2013, the IRS completed its field audit for those tax years and in March 2013, we received notice from the IRS that the audit report has been fully approved. The Company has agreed to those findings and paid $57.0 thousand, which was expensed during the three months ended March 31, 2013.

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Reinsurance Receivables

3 Months Ended

Mar. 31, 2013

Reinsurance Disclosures [Abstract]

Reinsurance [Text Block]

Reinsurance Receivables

The effects of reinsurance on premiums written and earned and on losses and loss adjustment expenses ("LAE") incurred are presented in the tables below:

Premiums	For the Three Months Ended
	March 31, 2013						March 31, 2012
	Written			Earned			Written			Earned
Direct and assumed	$	81,510		$	92,122		$	79,189		$	86,058
Ceded	(50,676		)	(58,980		)	(46,231		)	(54,086		)
Net	$	30,834		$	33,142		$	32,958		$	31,972

Losses and LAE incurred	For the Three Months Ended
	March 31, 2013			March 31, 2012
Direct and assumed	$	21,040		$	23,071
Ceded	(10,505		)	(11,805		)
Net losses and LAE incurred	$	10,535		$	11,266

The following table reflects the components of the reinsurance receivables:	At
	March 31, 2013		December 31, 2012
Prepaid reinsurance premiums (1):
Life	$	51,152	$	53,117
Accident and health	32,588		34,266
Property	80,893		85,805
Total	164,633		173,188
Ceded claim reserves:
Life	1,406		1,786
Accident and health	8,747		9,263
Property	9,083		8,663
Total ceded claim reserves recoverable	19,236		19,712
Other reinsurance settlements recoverable	13,038		11,088
Reinsurance receivables	$	196,907	$	203,988
(1)  Including policyholder account balances ceded.

The following table shows the amount included in reinsurance receivable that is recoverable from three unrelated insurers:

	At
	March 31, 2013		December 31, 2012
Total recoverable from three unrelated reinsurers	$	125,707	$	126,633

At March 31, 2013 and December 31, 2012, respectively, the three unrelated reinsurers were: London Life Reinsurance Company (A. M. Best Rating -A); London Life International Reinsurance Corporation (A. M. Best Rating-NR-3) and Spartan Property Insurance Company (A. M. Best Rating - Non-rated). Because Spartan Property Insurance Company does not maintain an A.M. Best rating, the related receivables are collateralized by assets held in trust accounts. At March 31, 2013, the Company does not believe there is a risk of loss as a result of the concentration of credit risk in the reinsurance program.

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Fair Value of Financial Instruments Level 4 Rollforward of Level 3 Assets measured at Fair Value (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013 Securities	Mar. 31, 2012	Dec. 31, 2012 Securities
Fair Value Disclosures [Abstract]
Number of Level 3 Securities	6		7
Percent of Total Investments	0.80%		1.00%
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Value	$ 1,123	$ 1,204
Included in net income	0	0
Included in other comprehensive (loss)	-25	-22
Sales	0	(22)
Transfers (out of) Level 3	(27)	(1)
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Value	$ 1,071	$ 1,159

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Other Comprehensive Income (Notes)

3 Months Ended

Mar. 31, 2013

Other Comprehensive Income [Abstract]

Other Comprehensive Income

Other Comprehensive Income

Amounts reclassified from accumulated other comprehensive income into earnings for the following periods are as follows:

	For the Three Months Ended March 31, 2013
	Net unrealized gains (losses) on available-for-sale securities			Net unrealized loss on interest rate swap			Total
Balance at December 31, 2012, net of tax	$	2,189		$	(2,820	)	$	(631	)
Other comprehensive income (loss) before reclassifications:
Pre-tax (loss) income	(51		)	260			209
Income tax benefit (expense)	18			(91		)	(73		)
Other comprehensive (loss) income before reclassifications, net of tax	(33		)	169			136
Amounts reclassified from accumulated other comprehensive (loss) income:
Pre-tax (income) loss	(7		)	49			42
Income tax expense (benefit)	2			(17		)	(15		)
Amounts reclassified from accumulated other comprehensive (loss) income, net of tax	(5		)	32			27
Current period other comprehensive (loss) income, net of tax	(38		)	201			163
Less: comprehensive income (loss) attributable to non-controlling interests	—			—			—
Balance at March 31, 2013, net of tax	$	2,151		$	(2,619	)	$	(468	)

	For the Three Months Ended March 31, 2012
	Net unrealized gains (losses) on available-for-sale securities			Net unrealized loss on interest rate swap			Total
Balance at December 31, 2011, net of tax	$	587		$	(2,341	)	$	(1,754	)
Other comprehensive income (loss) before reclassifications:
Pre-tax income(loss)	729			(70		)	659
Income tax (expense) benefit	(255		)	25			(230		)
Other comprehensive income (loss) before reclassifications, net of taxes	474			(45		)	429
Amounts reclassified from accumulated other comprehensive income (loss):
Pre-tax loss	3			—			3
Income tax (benefit)	(1		)	—			(1		)
Amounts reclassified from accumulated other comprehensive income, net of taxes	2			—			2
Net current period other comprehensive income (loss), net of taxes	476			(45		)	431
Less: comprehensive income attributable to non-controlling interests	1			—			1
Balance at March 31, 2012, net of tax	$	1,062		$	(2,386	)	$	(1,324	)

Reclassifications out of accumulated other comprehensive income are as follows:

	For the Three Months Ended
	March 31, 2013			March 31, 2012			Consolidated Statement of Income Location
Unrealized gains (losses) on available-for-sale securities:
Reclassification of gains (losses) included in net income	$	7		$	(3	)	Net realized investment gains (losses)
Related tax (expense) benefit	(2		)	1			Income taxes
Net of tax	5			(2		)	Net Income
Interest rate swap:
Reclassification of losses included in net income	(49		)	—			Interest expense
Related tax expense	17			—			Income taxes
Net of tax	$	(32	)	$	—		Net Income

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Investments by Maturity (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Schedule of Available-for-sale Securities [Line Items]
Due in one year or less, Amortized Cost	$ 5,456	$ 5,557
Due in one year or less, Fair Value	5,512	5,608
Due after one year through five years, Amortized Cost Basis	65,641	58,378
Due after one year through five years, Fair Value	67,823	60,323
Due after five years through ten years, Amortized Cost Basis	24,490	24,983
Due after five years through ten years, Fair Value	25,197	25,900
Due after ten years, Amortized Cost Basis	18,853	17,769
Due after ten years, Fair Value	19,313	18,396
Total Fixed Maturity Securities, Amortized Cost Basis	114,695	107,095
Fixed Maturity Securities	118,102	110,641
Mortgage-backed securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities, Debt Maturities, without Single Maturity Date, Amortized Cost Basis	195	285
Available-for-sale Securities, Debt Maturities, without Single Maturity Date, Fair Value	196	289
Asset-backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities, Debt Maturities, without Single Maturity Date, Amortized Cost Basis	60	123
Available-for-sale Securities, Debt Maturities, without Single Maturity Date, Fair Value	$ 61	$ 125

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Variable Interest Entities

3 Months Ended

Mar. 31, 2013

Variable Interest Entity, Not Primary Beneficiary, Disclosures [Abstract]

Variable Interest Entities Disclosure [Text Block]

Variable Interest Entities

In July 2011, the Company sold its 100% interest in Creative Investigations Recovery Group, LLC ("CIRG"). The consideration included a note receivable, included on the Consolidated Balance Sheets, with a first priority lien security interest in the assets of CIRG and other property of the buyers. The Company performed a detailed analysis of the CIRG sale transaction and determined that CIRG is considered a VIE, as defined in ASC 810, because the Company has an interest due to the note financing. The Company further determined that it is not the primary beneficiary because the Company does not have the power to direct the activities of the VIE and has no right to receive the residual returns of CIRG. Therefore, CIRG is not consolidated in the Company's results of operations. During the quarter ended March 31, 2013, the Company engaged in discussions with the buyers regarding possible restructuring of the note receivable and therefore the Company has temporarily halted the recognition of interest income on the note while discussions are ongoing. The Company's maximum exposure to loss in the VIE is limited to the outstanding balance of the note receivable, which is presented in the table below:

	At
	March 31, 2013		December 31, 2012
The Company's maximum exposure to loss in the VIE	$	1,139	$	1,139

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Business Acquisitions and Dispositions

3 Months Ended

Mar. 31, 2013

Business Combinations [Abstract]

Business Acquisitions and Dispositions

Business Acquisitions and Dispositions

Acquisition in 2013

On February 1, 2013, the Company acquired 100% of the outstanding stock of RICC, from subsidiaries of the Kemper Corporation ("Kemper") for $4.8 million.  RICC is a property/casualty insurance company domiciled and licensed in California, which the Company intends to use for geographic expansion in the Payment Protection business.  RICC had, at the time of purchase, no policies in force. All remaining claim liabilities for previously issued policies are fully reinsured by Kemper's subsidiary, Trinity Universal Insurance Company.

Acquisitions in 2012

On December 31, 2012, the Company acquired a 62.4% ownership interest in Digital Leash, LLC, d/b/a ProtectCELL for $20.0 million, which amount is deemed a Series A Contribution under the provisions of the related agreements. ProtectCELL provides membership plans for the protection of mobile wireless devices and other benefits including data management and identity theft protection. ProtectCELL is one of the leaders in mobile device protection plans and will spearhead Fortegra's efforts to expand its warranty and service contract business in the mobile and wireless device space. ProtectCELL's results will be included in the Company's Payment Protection segment. As part of the acquisition, the Company also has an option, commencing after 2014, to acquire the remaining 37.6% ownership interest in ProtectCELL, at a price based on a sliding scale multiple of ProtectCELL's trailing twelve-month EBITDA, less the Series A Contributions, multiplied by 37.6%. The option has no expiration, though the owners of the non-controlling interest have the right to defer the option commencement date for one year under certain conditions. The option must be exercised with respect to not less than all of the non-controlling interest, and is accounted for as an embedded derivative within the value of non-controlling interest.

On December 31, 2012, the Company acquired 100% of the outstanding stock ownership of 4Warranty Corporation, a leading warranty and extended service contract administrator with extensive expertise in furniture, electronics, appliance, lawn and garden, and fitness equipment. 4Warranty complements the Company's rapidly expanding warranty business. 4Warranty's results will be included in the Company's Payment Protection segment.

On April 24, 2012, the Company acquired a 100% ownership interest in MHA & Associates LLC ("MHA"), for $0.3 million, obtaining the renewal rights of the business and hiring the prior owner to maintain and increase the block of business.

The following table presents the allocation of purchase price recorded for the 2013 acquisition of RICC and the 2012 acquisitions of ProtectCELL and 4Warranty.  The ProtectCELL and 4Warranty determinations are preliminary, mainly due to ongoing studies being conducted by external valuation experts to assist the Company in its determination of the fair values of intangible assets, deferred revenues, non-controlling interest and goodwill, and the related impact on deferred taxes, whereas all other amounts are considered final. The ProtectCELL value of deferred acquisition costs as of the acquisition date has been reclassified to deferred revenue to present our preliminary estimate of the fair value of our ongoing performance obligation at the time of acquisition as reflected in the Consolidated Balance Sheet as of December 31, 2012.

	2012						2013
	Acquisitions						Acquisition
	4Warranty			ProtectCELL			RICC
Assets:
Cash and cash equivalents	$	703		$	350		$	1,893
Restricted cash	72			7,438			—
Investments	—			—			2,488
Short-term investments	—			252			—
Accrued investment income	—			—			38
Notes receivable, net	—			6,341			—
Other receivables	199			2,312			—
Reinsurance receivables	—			—			200
Property and equipment, net	61			674			—
Other intangible assets, net	1,900			27,815			375
Other assets	—			1,470			10
Liabilities:
Unpaid claims	—			(176		)	(200		)
Accrued expenses, accounts payable and other liabilities	(221		)	(2,644		)	(9		)
Deferred revenue	(1,260		)	(25,564		)	—
Income taxes payable	(296		)	—			—
Deferred income taxes, net	(266		)	—			—
Net assets acquired	892			18,268			4,795
Non-controlling interest	—			(10,000		)	—
Purchase consideration (1)	3,616			20,000			4,795
Goodwill	$	2,724		$	11,732		$	—

⁽¹⁾ - The purchase consideration for the 4Warranty acquisition includes $0.3 million of contingent consideration and $0.5 million of working capital and hold back reserves, which estimates are unchanged in the current period and are expected to be paid out based on the agreed terms of the Stock Purchase Agreement.

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Goodwill

3 Months Ended

Mar. 31, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill Disclosure [Text Block]

Goodwill

The following table presents goodwill by segment:

	Payment Protection		BPO		Brokerage		Total
Balance at December 31, 2012	$	52,084	$	12,970	$	54,458	$	119,512
Balance at March 31, 2013	$	52,084	$	12,970	$	54,458	$	119,512

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Investments Schedule of net investment income (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Investments [Abstract]
Fixed Income Securities	$ 743	$ 685
Cash on hand and on deposit	20	51
Common and preferred stock dividends	76	26
Notes receivable	72	63
Other income	114	35
Investment Expenses	(116)	(117)
Net Investment Income	$ 909	$ 743

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Statutory Reporting and Insurance Subsidiaries Dividend Restrictions Level 4 (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended	12 Months Ended
	Mar. 31, 2013	Dec. 31, 2012
Statutory Accounting Practices [Line Items]
Cash Dividends Paid to Parent Company by Consolidated Subsidiaries	$ 231	$ 2,783
Combined statutory capital and surplus of the Company's insurance subsidiaries	61,181	53,885
Required minimum statutory capital and surplus	19,500	15,300
Amount available for ordinary dividends of the Company's insurance subsidiaries	4,228	4,500
Ordinary dividends paid to the parent compary by insurance company subsidiaries [Member]
Statutory Accounting Practices [Line Items]
Cash Dividends Paid to Parent Company by Consolidated Subsidiaries	231	2,783
Extraordinary dividends paid to the parent compary by insurance company subsidiaries [Member]
Statutory Accounting Practices [Line Items]
Cash Dividends Paid to Parent Company by Consolidated Subsidiaries	$ 0	$ 0

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Reinsurance Receivables Losses and LAE Incurred (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Reinsurance Disclosures [Abstract]
Direct and Assumed	$ 21,040	$ 23,071
Ceded	(10,505)	(11,805)
Net losses and LAE Incurred	$ 10,535	$ 11,266

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Investments Realized investment gains, losses and OTTI (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Investments [Abstract]
Gross Realized Gains	$ 7	$ 1
Gross Realized Losses	0	(4)
Net realized gains on the sale of investments	7	(3)
Impairment write-downs (other-than-temporary impairments)	0	0
Net realized investment gains (losses)	$ 7	$ (3)

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Other Comprehensive Income (Tables)

3 Months Ended

Mar. 31, 2013

Other Comprehensive Income [Abstract]

Schedule of Comprehensive Income (Loss)

Amounts reclassified from accumulated other comprehensive income into earnings for the following periods are as follows:

	For the Three Months Ended March 31, 2013
	Net unrealized gains (losses) on available-for-sale securities			Net unrealized loss on interest rate swap			Total
Balance at December 31, 2012, net of tax	$	2,189		$	(2,820	)	$	(631	)
Other comprehensive income (loss) before reclassifications:
Pre-tax (loss) income	(51		)	260			209
Income tax benefit (expense)	18			(91		)	(73		)
Other comprehensive (loss) income before reclassifications, net of tax	(33		)	169			136
Amounts reclassified from accumulated other comprehensive (loss) income:
Pre-tax (income) loss	(7		)	49			42
Income tax expense (benefit)	2			(17		)	(15		)
Amounts reclassified from accumulated other comprehensive (loss) income, net of tax	(5		)	32			27
Current period other comprehensive (loss) income, net of tax	(38		)	201			163
Less: comprehensive income (loss) attributable to non-controlling interests	—			—			—
Balance at March 31, 2013, net of tax	$	2,151		$	(2,619	)	$	(468	)

	For the Three Months Ended March 31, 2012
	Net unrealized gains (losses) on available-for-sale securities			Net unrealized loss on interest rate swap			Total
Balance at December 31, 2011, net of tax	$	587		$	(2,341	)	$	(1,754	)
Other comprehensive income (loss) before reclassifications:
Pre-tax income(loss)	729			(70		)	659
Income tax (expense) benefit	(255		)	25			(230		)
Other comprehensive income (loss) before reclassifications, net of taxes	474			(45		)	429
Amounts reclassified from accumulated other comprehensive income (loss):
Pre-tax loss	3			—			3
Income tax (benefit)	(1		)	—			(1		)
Amounts reclassified from accumulated other comprehensive income, net of taxes	2			—			2
Net current period other comprehensive income (loss), net of taxes	476			(45		)	431
Less: comprehensive income attributable to non-controlling interests	1			—			1
Balance at March 31, 2012, net of tax	$	1,062		$	(2,386	)	$	(1,324	)

Schedule of Amounts Recognized in Other Comprehensive Income (Loss)

Reclassifications out of accumulated other comprehensive income are as follows:

	For the Three Months Ended
	March 31, 2013			March 31, 2012			Consolidated Statement of Income Location
Unrealized gains (losses) on available-for-sale securities:
Reclassification of gains (losses) included in net income	$	7		$	(3	)	Net realized investment gains (losses)
Related tax (expense) benefit	(2		)	1			Income taxes
Net of tax	5			(2		)	Net Income
Interest rate swap:
Reclassification of losses included in net income	(49		)	—			Interest expense
Related tax expense	17			—			Income taxes
Net of tax	$	(32	)	$	—		Net Income

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Business Acquisitions and Dispositions (Details) (USD $)					3 Months Ended		3 Months Ended			3 Months Ended
	Mar. 31, 2013	Dec. 31, 2012	Mar. 31, 2012	Dec. 31, 2011	Mar. 31, 2013 Acquisition of Response Indemnity Company of California [Member]	Feb. 01, 2013 Acquisition of Response Indemnity Company of California [Member]	Mar. 31, 2013 Acquisition of ProtectCELL [Member]	Mar. 31, 2013 ProtectCell [Member]	Mar. 31, 2013 Acquisition of MHA & Associates LLC[Member] [Member]	Mar. 31, 2013 Acquisition of 4Warranty [Member] [Member]		Mar. 31, 2013 Acquisition of Digital Leash, LLC [Member] [Member]
Business Acquisition [Line Items]
Business Acquisition, Effective Date of Acquisition					Feb. 01, 2013		Dec. 31, 2012			Dec. 31, 2012
Business Acquisition, Percentage of Voting Interests Acquired					100.00%		62.40%		100.00%	100.00%
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners								37.60%
Business Acquisition, Name of Acquired Entity										4Warranty Corporation
Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net
Cash and cash equivalents	$ 14,339,000	$ 15,209,000	$ 18,676,000	$ 31,339,000	$ 1,893,000					$ 703,000		$ 350,000
Restricted cash	28,881,000	31,142,000			0					72,000		7,438,000
Investments					2,488,000					0		0
Short-term investments	1,222,000	1,222,000			0					0		252,000
Accrued investment income	1,217,000	1,235,000			38,000					0		0
Notes receivable, net	5,045,000	11,290,000			0					0		6,341,000
Other receivables	28,189,000	13,511,000			0					199,000		2,312,000
Reinsurance receivables	196,907,000	203,988,000			200,000					0		0
Deferred acquisition costs	63,623,000	59,320,000
Property and equipment, net	17,621,000	17,946,000			0					61,000		674,000
Other Intangible Assets, Net	77,767,000	79,340,000			375,000					1,900,000		27,815,000
Other assets	8,554,000	7,667,000			10,000					0		1,470,000
Unpaid claims	(34,155,000)	(33,007,000)			(200,000)					0		(176,000)
Accrued expenses, accounts payable and other liabilities					(9,000)					(221,000)		(2,644,000)
Deferred Revenue	(58,410,000)	(50,607,000)			0					(1,260,000)		(25,564,000)
Income taxes payable					0					(296,000)		0
Deferred income taxes, net					0					(266,000)		0
Net Assets Acquired					4,795,000					892,000		18,268,000
Non-controlling interest												10,000,000
Purchase Consideration					4,795,000				(300,000)	3,616,000	[1]	20,000,000
Goodwill					0					(2,724,000)		(11,732,000)
Business Acquisition, Working Capital Increase (Decrease)										500,000
Business Acquisition, Contingent Consideration, at Fair Value										300,000
Business Acquisition, Cost of Acquired Entity, Purchase Price						4,800,000
Statutory Accounting Practices, Statutory Capital and Surplus, Balance	$ 61,181,000	$ 53,885,000

[1] The purchase consideration for the 4Warranty acquisition includes $0.3 million of contingent consideration and $0.5 million of working capital and hold back reserves, which estimates are unchanged in the current period and are expected to be paid out based on the agreed terms of the Stock Purchase Agreement.

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Derivative Financial Instruments - Interest Rate Swap

3 Months Ended

Mar. 31, 2013

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments and Hedging Activities Disclosure [Text Block]

Derivative Financial Instruments - Interest Rate Swap

In April 2011, the Company entered into a forward interest rate swap (the "Swap") with Wells Fargo Bank, N.A, pursuant to which the Company swapped the floating rate portion of its outstanding preferred trust securities to a fixed rate. The Swap commenced in June 2012 and expires in June 2017 and is designated as a cash flow hedge.

The following table summarizes the fair value (including accrued interest) and related outstanding notional amounts of derivative instruments and indicates where within the Consolidated Balance Sheets each is reported:

	Balance Sheet Location	At
		March 31, 2013			December 31, 2012
Derivatives designated as cash flow hedging instruments:
Interest rate swap - notional value		$	35,000		$	35,000
Fair value of the Swap	Accrued expenses, accounts payable and other liabilities	$	(4,029	)	$	(4,338	)
Unrealized loss, net of tax, on the fair value of the Swap	AOCI	$	(2,619	)	$	(2,820	)
Variable rate of the interest rate swap		0.28		%	0.31		%
Fixed rate of the interest rate swap		3.47		%	3.47		%

The following table summarizes the pretax impact of the interest rate swap designated as a cash flow hedge on the Consolidated Financial Statements for the following periods:

	For the Three Months Ended
	March 31, 2013		March 31, 2012
Gain (loss) recognized in AOCI on the derivative-effective portion	$	260	$	(70	)
Loss reclassified from AOCI into income-effective portion	$	49	$	—
Gain (loss) recognized in income on the derivative-ineffective portion	$	—	$	—

The table below shows the estimated amount to be reclassified to earnings from AOCI during the next 12 months. These net losses reclassified into earnings are expected to primarily increase net interest expense related to the respective hedged item.

	At
	March 31, 2013
Estimated loss to be reclassified to earnings from AOCI during the next 12 months	$	1,118

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2013

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

Commitments and Contingencies

Commitments

The Company, from time to time, may in the ordinary course of normal business enter into certain contractual obligations or commitments.

As part of the 2012 acquisition of ProtectCELL, the Company has a conditional commitment to provide up to $10.2 million of additional capital ("Additional Fortegra Capital Contributions") to ProtectCELL if the board of directors of ProtectCELL (the "PC Board") determines that ProtectCELL requires additional funds to support expansion and growth, or other appropriate business needs.

The Company is obligated to evaluate any such funding request received from the PC Board in good faith to determine whether in the Company's reasonable business judgment the requested capital should be contributed. Fortegra is not required to honor the funding request from the PC Board if it in good faith deems the request to be imprudent or unjustified.

The benefits of such additional funding would inure to the Company and to the non-controlling ownership interest of ProtectCELL, in proportion to their respective ownership interests. However, in return for each $1,000 of Additional Fortegra Capital Contributions, the Company would receive one Series A Preferred Unit. Any unreturned Series A Preferred contribution is deducted from ProtectCELL's valuation in determining the option price.

Contingencies

The Company is a party to claims and litigation in the normal course of its operations. Management believes that the ultimate outcome of these matters will not have a material adverse effect on the consolidated financial condition, results of operations or cash flows of the Company.

In the Payment Protection segment, the Company is currently a defendant in lawsuits that relate to marketing and/or pricing issues that involve claims for punitive, exemplary or extra-contractual damages in amounts substantially in excess of the covered claim.  Such litigation includes Lawson v. Life of the South Insurance Co., which was filed on March 13, 2006, in the Superior Court of Muscogee County, Georgia, and later moved to the United States District Court for the Middle District of Georgia, Columbus Division.  The allegations involve the Company's alleged duty to refund unearned premiums on credit insurance policies, even when the Company has not been informed of the payoff of the underlying finance contract. The action seeks an injunction requiring remedial action, as well as a variety of damages, including punitive damages and attorney fees and costs.  The action was brought as a class action, however the Company's May 11, 2012 Motion to Strike or Dismiss Plaintiffs' Class Action Allegations, or in the Alternative, to Deny Class Certification was granted on September 28, 2012.  Plaintiff's appeal of such ruling was denied on December 7, 2012.  The merits discovery phase continues in the individual, underlying case.

Also in the Payment Protection segment, the Company is currently a defendant in Mullins v. Southern Financial Life Insurance Co., which was filed on February 2, 2006, in the Pike Circuit Court, in the Commonwealth of Kentucky.  A class was certified on June 25, 2010.  At issue is the duration or term of coverage under certain policies.  The action alleges violations of the Consumer Protection Act and certain insurance statutes, as well as common law fraud.  The action seeks compensatory and punitive damages, attorney fees and interest.  The parties are currently involved in the merits discovery phase and discovery disputes have arisen.  Plaintiffs filed a Motion for Sanctions on April 5, 2012 in connection with the Company's efforts to locate and gather certificates and other documents from the Company's agents.  While the court did not award sanctions, it did order the Company to subpoena certain records from its agents.  The Company filed an appeal of this order, which was denied on August 31, 2012.  The Company is currently appealing the denial in the Kentucky Supreme Court. To date, no trial date has been set.

In the Motor Clubs business in the Payment Protection segment, the Company is currently a Defendant in Dill and Thurman v. Continental Car Club, Inc. and Fortegra Financial Corp., which was filed on August 18, 2011 in the Tennessee Chancery Court, Rhea County.  The Plaintiffs assert claims for breach of their employment and non-competition agreements, among other claims, and seek injunctive relief and damages in connection with the Company's purchase of Continental Car Club, Inc. from Plaintiffs in May 2010.  The trial court ruled in November 2012 that Plaintiffs resigned for good reason from the Company, the result of which is that the Company can enforce the non-competition and non-solicitation provisions contained in the Plaintiffs' employment agreements for a period of up to two years, but that the Company is required to pay Plaintiffs base salary and accrued benefits during such period. As of March 31, 2013, the value of such salary and benefits is $0.6 million; the value would increase over time through the two-year period to an estimated maximum of approximately $0.8 million.  The Company has filed for an appeal of this ruling and will vigorously defend its position.  The Company believes that it is not probable that the judgment will be upheld through the appeal process, and that reasonably possible outcomes range from $0 to the amount of the judgment.  Accordingly, the Company has not recorded a charge with respect to this loss contingency as of March 31, 2013.

The Company considers such litigation customary in its lines of business.  In management's opinion, based on information available at this time, the ultimate resolution of such litigation, which it is vigorously defending, should not be materially adverse to the financial position, results of operations or cash flows of the Company. It should be noted that large punitive damage awards, bearing little relation to actual damages sustained by plaintiffs, have been awarded in certain states against other companies in the credit insurance business. Loss contingencies may be taken as developments warrant, although such amounts are not reasonably estimable at this time.

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Consolidation of Operations Charges (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013
Consolidation of Operations Charges [Abstract]
Severance and benefit costs included in personnel expense	$ 1,154
Total consolidation of operations costs	$ 1,154

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Stock-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2013

Stock-based compensation [Abstract]

Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]

A summary of the Company's time- and performance-based stock option activity for the three months ended March 31, 2013 is presented below:

	Time-Based							Performance-Based
	Options Outstanding		Weighted Average Exercise Price		Options Exercisable	Weighted Average Exercise Price		Options Outstanding		Weighted Average Exercise Price		Options Exercisable	Weighted Average Exercise Price
Balance, December 31, 2012	2,016,231		$	4.38	1,690,040	$	3.66	185,000		$	8.00	—	$	—
Granted	—		—		—	—		228,981		8.89		—	—
Vested	—		—		8,642	9.86		—		—		—	—
Exercised	—		—		—	—		—		—		—	—
Canceled/forfeited	(18,750	)	7.84		—	—		(49,168	)	8.62		—	—
Balance, March 31, 2013	1,997,481		$	4.35	1,698,682	$	3.69	364,813		$	8.48	—	$	—
Weighted average remaining contractual term at March 31, 2013 (in years)	4.7				4.0			9.5				0

Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range [Table Text Block]

The following presents the Company's outstanding and exercisable time- and performance-based stock options by exercise price at March 31, 2013:

	Options Outstanding				Options Exercisable
Exercise Price	Option Shares Outstanding	Weighted Average Remaining Contractual Life (years)	Weighted Average Exercise Price		Option Shares Outstanding	Weighted Average Remaining Contractual Life (years)	Weighted Average Exercise Price
$3.03	787,500	2.63	$	3.03	787,500	2.63	$	3.03
3.25	757,963	4.57	3.25		757,963	4.57	3.25
7.84	238,750	8.25	7.84		83,339	8.25	7.84
7.93	15,000	9.50	7.93		—	—	—
7.97	110,000	9.42	7.97		—	—	—
8.00	170,000	9.25	8.00		—	—	—
8.89	194,813	9.76	8.89		—	—	—
11.00	88,268	7.71	11.00		69,880	7.71	11.00
Totals	2,362,294	5.44	$	4.99	1,698,682	3.98	$	3.69

Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding and Exercisable [Table Text Block]

Information on time- and performance-based stock options, vested and expected to vest, is as follows:	At
	March 31, 2013
Number of shares vested and expected to vest	2,327,362
Weighted average remaining contractual life (in years)	5.38
Weighted average exercise price per option (in dollars)	$	4.94
Intrinsic value	$	9,115

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

The weighted average assumptions used to estimate the fair values of all stock options granted is as follows:

	For the Three Months Ended
	March 31, 2013
Expected term (years)	8.83
Expected volatility	31.87	%
Expected dividends	—	%
Risk-free rate	1.54	%

Schedule of Share-based Compensation, Restricted Stock Units Award Activity [Table Text Block]

A summary of the Company's time- and performance-based restricted stock award activity for the three months ended March 31, 2013 is presented below:

	Time-Based				Performance-Based
	Shares		Weighted Average Grant Date Fair Value		Shares		Weighted Average Grant Date Fair Value
Shares outstanding at December 31, 2012	103,000		$	8.00	80,861		$	11.00
Granted	75,000		9.53		76,326		8.89
Vested	(20,000	)	7.24		—		—
Forfeited	—		—		(11,389	)	8.89
Shares outstanding at March 31, 2013	158,000		$	8.82	145,798		$	10.06

Schedule of Compensation Cost for Share-based Payment Arrangements, Allocation of Share-based Compensation Costs by Plan [Table Text Block]

Total time- and performance-based stock-based compensation expense and the related income tax (benefit), as recognized on the Consolidated Statements of Income, is as follows:

	For the Three Months Ended
	March 31, 2013			March 31, 2012
Personnel costs	$	184		$	120
Other operating expenses	118			59
Income tax benefit	(116		)	(68		)
Net stock-based compensation expense	$	186		$	111

Additional information on total non-vested stock-based compensation is as follows:	At
	March 31, 2013
	Stock Options		Restricted Stock Awards
Unrecognized compensation cost related to non-vested awards	$	973	$	1,544
Weighted-average recognition period (in years)	3.9		5.3

Schedule of Unrecognized Compensation Cost, Nonvested Awards [Table Text Block]

Additional information on total non-vested stock-based compensation is as follows:	At
	March 31, 2013
	Stock Options		Restricted Stock Awards
Unrecognized compensation cost related to non-vested awards	$	973	$	1,544
Weighted-average recognition period (in years)	3.9		5.3

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Consolidated Statements of Comprehensive Income (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Net Income	$ 2,493	$ 3,414
Other comprehensive Income (Loss), net of tax:
Unrealized holding (losses) gains arising during the period	(51)	729
Related tax benefit (expense)	18	(255)
Reclassification of (gains) losses included in net income	(7)	3
Related tax (benefit) expense	2	(1)
Unrealized (losses) gains on available-for-sale securities, net of tax	(38)	476
Interest Rate Swap
Unrealized gain (loss) on interest rate swap	260	(70)
Related tax (expense) benefit	(91)	25
Reclassification of losses included in net income	49	0
Related tax (benefit)	(17)	0
Unrealized gain (loss) on interest rate swap, net of tax	201	(45)
Other comprehensive income before non-controlling interests, net of tax	163	431
Less: comprehensive income attributable to non-controlling interests	0	1
Other comprehensive income (loss)	163	430
Comprehensive income	$ 2,656	$ 3,844

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Segment Results Segment Reconciliation to Consolidated Total (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Segment Reporting Information, Revenue for Reportable Segment	$ 35,026	$ 27,322
Net losses and loss adjustment expenses	10,535	11,266
Member benefit claims	8,978	1,303
Commissions	35,362	31,988
Total revenues	89,901	71,879
Operating Expenses	25,651	18,131
Earnings before depreciation, amortization and interest expense	80,526	62,688
Earnings before interest, taxes, depreciation and amortization	9,375	9,191
Depreciation and Amortization	3,266	2,220
Interest expense	1,444	1,652
Income before income taxes and non-controlling interests	4,665	5,319
Income taxes	1,354	1,887
Less: net income attributable to non-controlling interests	818	18
Net Income	2,493	3,414
Payment Protection Segment [Member]
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Segment reporting information, Net Revenue for Payment Protection Segment	20,637	13,094
Net losses and loss adjustment expenses	10,535	11,266
Member benefit claims	8,978	1,303
Commissions	35,362	31,988
Operating Expenses	14,892	7,913
Earnings before interest, taxes, depreciation and amortization	5,745	5,181
Depreciation and Amortization	1,775	849
Interest expense	957	1,012
Income before income taxes and non-controlling interests	3,013	3,320
BPO segment [Member]
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Segment reporting information, Net Revenue for BPO Segment	4,214	4,205
Operating Expenses	3,556	3,133
Earnings before interest, taxes, depreciation and amortization	658	1,072
Depreciation and Amortization	834	503
Interest expense	177	267
Income before income taxes and non-controlling interests	(353)	302
Brokerage Segment [Member]
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Segment reporting information, Net Revenue for Brokerage Segment	10,175	10,023
Operating Expenses	7,203	7,085
Earnings before interest, taxes, depreciation and amortization	2,972	2,938
Depreciation and Amortization	657	868
Interest expense	310	373
Income before income taxes and non-controlling interests	2,005	1,697
Corporate [Member]
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Operating Expenses	0	0
Earnings before interest, taxes, depreciation and amortization	0	0
Income before income taxes and non-controlling interests	$ 0	$ 0

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Recent Accounting Standards

3 Months Ended

Mar. 31, 2013

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

Recently Issued Accounting Standards Adopted and Not Yet Adopted [Text Block]

Recent Accounting Standards

Recently Adopted Accounting Pronouncements

In February 2013, the FASB issued Accounting Standards Update ("ASU") No. 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. ASU 2013-02 requires an entity to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income ("AOCI") by the respective line items of net income but only if the amount reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period. This guidance is effective for reporting periods beginning after December 15, 2012. The Company adopted this guidance effective January 1, 2013. Accordingly, we have included an enhanced footnote disclosure in the Note, "Other Comprehensive Income." The adoption of this pronouncement did not impact the Company's consolidated financial position, results of operations or cash flows.

In July 2012, the FASB issued ASU No. 2012-02, Intangibles-Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment. The ASU permits entities to perform an optional qualitative assessment for determining whether it is more likely than not that an indefinite-lived intangible asset is impaired. The guidance is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. The adoption of this pronouncement did not impact the Company's consolidated financial position, results of operations or cash flows.

In December 2011, the FASB issued ASU No. 2011-11, Disclosures About Offsetting Assets and Liabilities. This standard requires the disclosure of both gross and net information about instruments and transactions eligible for offset in the statement of financial position, as well as instruments and transactions subject to an agreement similar to a master netting arrangement. In addition, the standard requires disclosure of collateral received and posted in connection with master netting agreements or similar arrangements. The new requirements are effective for the Company beginning on January 1, 2013. As the provisions of ASU No. 2011-11 only impact the disclosure requirements related to the offsetting of assets and liabilities, the adoption of this guidance did not impact the Company's consolidated financial position, results of operations or cash flows.

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Investments Cost, Gross Unrealized Gains, Losses and Fair Value (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Schedule of Available-for-sale Securities [Line Items]
Cost or Amortized Cost	$ 114,695	$ 107,095
Fair Value	118,102	110,641
Obligations of the U.S. Treasury and U.S. Government agencies [Member}
Schedule of Available-for-sale Securities [Line Items]
Cost or Amortized Cost	26,779	22,424
Gross Unrealized Gains	654	761
Gross Unrealized Losses	(54)	(7)
Fair Value	27,379	23,178
Municipal Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Cost or Amortized Cost	18,407	16,636
Gross Unrealized Gains	399	413
Gross Unrealized Losses	(29)	(8)
Fair Value	18,777	17,041
Corporate Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Cost or Amortized Cost	69,254	67,627
Gross Unrealized Gains	2,585	2,461
Gross Unrealized Losses	(150)	(80)
Fair Value	71,689	70,008
Mortgage-backed securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Cost or Amortized Cost	195	285
Gross Unrealized Gains	1	4
Gross Unrealized Losses	0	0
Fair Value	196	289
Asset-backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Cost or Amortized Cost	60	123
Gross Unrealized Gains	1	2
Gross Unrealized Losses	0	0
Fair Value	61	125
Total Fixed Maturity Securites [Member]
Schedule of Available-for-sale Securities [Line Items]
Cost or Amortized Cost	114,695	107,095
Gross Unrealized Gains	3,640	3,641
Gross Unrealized Losses	(233)	(95)
Fair Value	118,102	110,641
Common Stock [Member]
Schedule of Available-for-sale Securities [Line Items]
Cost or Amortized Cost	39	39
Gross Unrealized Gains	5	3
Gross Unrealized Losses	0	0
Fair Value	44	42
Preferred Stock [Member]
Schedule of Available-for-sale Securities [Line Items]
Cost or Amortized Cost	5,975	4,975
Gross Unrealized Gains	212	133
Gross Unrealized Losses	(1)	(1)
Fair Value	6,186	5,107
Common stock, non-publicly traded [Member]
Schedule of Available-for-sale Securities [Line Items]
Cost or Amortized Cost	59	59
Gross Unrealized Gains	4	4
Gross Unrealized Losses	(5)	(5)
Fair Value	58	58
Preferred stock, non-publicly traded [Member]
Schedule of Available-for-sale Securities [Line Items]
Cost or Amortized Cost	1,009	1,009
Gross Unrealized Gains	4	4
Gross Unrealized Losses	0	0
Fair Value	1,013	1,013
Total Equity Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Cost or Amortized Cost	7,082	6,082
Gross Unrealized Gains	225	144
Gross Unrealized Losses	(6)	(6)
Fair Value	$ 7,301	$ 6,220

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Fair Value of Financial Instruments Level 4 Carrying and Fair Values of Financial Instruments (Details) (USD $)	Mar. 31, 2013	Dec. 31, 2012	Mar. 31, 2012	Dec. 31, 2011
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	$ 14,339,000	$ 15,209,000	$ 18,676,000	$ 31,339,000
Fixed Maturity Securities	118,102,000	110,641,000
Equity Securities	7,301,000	6,220,000
Notes receivable	5,045,000	11,290,000
Accounts and premiums receivable, net	33,883,000	27,026,000
Other receivables	28,189,000	13,511,000
Short-term investments	1,222,000	1,222,000
Note payable	91,750,000	89,438,000
Preferred trust securities	35,000,000	35,000,000
Carrying Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	14,339,000	15,209,000
Notes receivable	5,045,000	11,290,000
Accounts and premiums receivable, net	33,883,000	27,026,000
Other receivables	28,189,000	13,511,000
Short-term investments	1,222,000	1,222,000
Total Financial Assets	208,081,000	185,119,000
Note payable	91,750,000	89,438,000
Preferred trust securities	35,000,000	35,000,000
Interest Rate Swap	4,029,000	4,338,000
Total Financial Liabilities	130,779,000	128,776,000
Estimate of Fair Value, Fair Value Disclosure [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	14,339,000	15,209,000
Notes receivable	5,045,000	11,290,000
Accounts and premiums receivable, net	33,883,000	27,026,000
Other receivables	28,189,000	13,511,000
Short-term investments	1,222,000	1,222,000
Total Financial Assets	208,081,000	185,119,000
Note payable	91,750,000	89,438,000
Preferred trust securities	35,000,000	35,000,000
Interest Rate Swap	4,029,000	4,338,000
Total Financial Liabilities	130,779,000	128,776,000
Obligations of the U.S. Treasury and U.S. Government agencies [Member}
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities	27,379,000	23,178,000
Obligations of the U.S. Treasury and U.S. Government agencies [Member} | Carrying Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities	27,379,000	23,178,000
Obligations of the U.S. Treasury and U.S. Government agencies [Member} | Estimate of Fair Value, Fair Value Disclosure [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities	27,379,000	23,178,000
Municipal Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities	18,777,000	17,041,000
Municipal Securities [Member] | Carrying Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities	18,777,000	17,041,000
Municipal Securities [Member] | Estimate of Fair Value, Fair Value Disclosure [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities	18,777,000	17,041,000
Corporate Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities	71,689,000	70,008,000
Corporate Securities [Member] | Carrying Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities	71,689,000	70,008,000
Corporate Securities [Member] | Estimate of Fair Value, Fair Value Disclosure [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities	71,689,000	70,008,000
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities	196,000	289,000
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member] | Carrying Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities	196,000	289,000
Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member] | Estimate of Fair Value, Fair Value Disclosure [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities	196,000	289,000
Asset-backed Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities	61,000	125,000
Asset-backed Securities [Member] | Carrying Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities	61,000	125,000
Asset-backed Securities [Member] | Estimate of Fair Value, Fair Value Disclosure [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities	61,000	125,000
Common Stock [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities	44,000	42,000
Common Stock [Member] | Carrying Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	44,000	42,000
Common Stock [Member] | Estimate of Fair Value, Fair Value Disclosure [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	44,000	42,000
Preferred Stock [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities	6,186,000	5,107,000
Preferred Stock [Member] | Carrying Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	6,186,000	5,107,000
Preferred Stock [Member] | Estimate of Fair Value, Fair Value Disclosure [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	6,186,000	5,107,000
Common stock, non-publicly traded [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities	58,000	58,000
Common stock, non-publicly traded [Member] | Carrying Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	58,000	58,000
Common stock, non-publicly traded [Member] | Estimate of Fair Value, Fair Value Disclosure [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	58,000	58,000
Preferred stock, non-publicly traded [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities	1,013,000	1,013,000
Preferred stock, non-publicly traded [Member] | Carrying Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	1,013,000	1,013,000
Preferred stock, non-publicly traded [Member] | Estimate of Fair Value, Fair Value Disclosure [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	1,013,000	1,013,000
Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	1,222,000	1,222,000
Total Assets	7,452,000	6,371,000
Interest Rate Swap	0	0
Fair Value, Inputs, Level 1 [Member] | Obligations of the U.S. Treasury and U.S. Government agencies [Member}
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities	0
Fair Value, Inputs, Level 1 [Member] | Municipal Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities	0	0
Fair Value, Inputs, Level 1 [Member] | Corporate Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities	0	0
Fair Value, Inputs, Level 1 [Member] | Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities	0	0
Fair Value, Inputs, Level 1 [Member] | Asset-backed Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities	0	0
Fair Value, Inputs, Level 1 [Member] | Common Stock [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	44,000	42,000
Fair Value, Inputs, Level 1 [Member] | Preferred Stock [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	6,186,000	5,107,000
Fair Value, Inputs, Level 1 [Member] | Common stock, non-publicly traded [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	0	0
Fair Value, Inputs, Level 1 [Member] | Preferred stock, non-publicly traded [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	0	0
Fair Value, Inputs, Level 1 [Member] | Obligations of the U.S. Treasury and U.S. Government agencies [Member}
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities		0
Estimate of Fair Value, Fair Value Disclosure [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	1,222,000	1,222,000
Total Assets	126,625,000	118,083,000
Interest Rate Swap	4,029,000	4,338,000
Estimate of Fair Value, Fair Value Disclosure [Member] | Obligations of the U.S. Treasury and U.S. Government agencies [Member}
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities	27,379,000
Estimate of Fair Value, Fair Value Disclosure [Member] | Municipal Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities	18,777,000	17,041,000
Estimate of Fair Value, Fair Value Disclosure [Member] | Corporate Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities	71,689,000	70,008,000
Estimate of Fair Value, Fair Value Disclosure [Member] | Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities	196,000	289,000
Estimate of Fair Value, Fair Value Disclosure [Member] | Asset-backed Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities	61,000	125,000
Estimate of Fair Value, Fair Value Disclosure [Member] | Common Stock [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	44,000	42,000
Estimate of Fair Value, Fair Value Disclosure [Member] | Preferred Stock [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	6,186,000	5,107,000
Estimate of Fair Value, Fair Value Disclosure [Member] | Common stock, non-publicly traded [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	58,000	58,000
Estimate of Fair Value, Fair Value Disclosure [Member] | Preferred stock, non-publicly traded [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	1,013,000	1,013,000
Estimate of Fair Value, Fair Value Disclosure [Member] | Obligations of the U.S. Treasury and U.S. Government agencies [Member}
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities		23,178,000
Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	0
Total Assets	118,102,000	110,589,000
Interest Rate Swap	4,029,000	4,338,000
Fair Value, Inputs, Level 2 [Member] | Obligations of the U.S. Treasury and U.S. Government agencies [Member}
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities	27,379,000
Fair Value, Inputs, Level 2 [Member] | Municipal Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities	18,777,000	17,041,000
Fair Value, Inputs, Level 2 [Member] | Corporate Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities	71,689,000	69,956,000
Fair Value, Inputs, Level 2 [Member] | Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities	196,000	289,000
Fair Value, Inputs, Level 2 [Member] | Asset-backed Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities	61,000	125,000
Fair Value, Inputs, Level 2 [Member] | Common Stock [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	0	0
Fair Value, Inputs, Level 2 [Member] | Preferred Stock [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	0	0
Fair Value, Inputs, Level 2 [Member] | Common stock, non-publicly traded [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	0	0
Fair Value, Inputs, Level 2 [Member] | Preferred stock, non-publicly traded [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	0	0
Fair Value, Inputs, Level 2 [Member] | Obligations of the U.S. Treasury and U.S. Government agencies [Member}
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities		23,178,000
Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments	0	0
Total Assets	1,071,000	1,123,000
Interest Rate Swap	0	0
Fair Value, Inputs, Level 3 [Member] | Obligations of the U.S. Treasury and U.S. Government agencies [Member}
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities	0
Fair Value, Inputs, Level 3 [Member] | Municipal Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities	0	0
Fair Value, Inputs, Level 3 [Member] | Corporate Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities	0	52,000
Fair Value, Inputs, Level 3 [Member] | Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities	0	0
Fair Value, Inputs, Level 3 [Member] | Asset-backed Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities	0	0
Fair Value, Inputs, Level 3 [Member] | Common Stock [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	0	0
Fair Value, Inputs, Level 3 [Member] | Preferred Stock [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	0	0
Fair Value, Inputs, Level 3 [Member] | Common stock, non-publicly traded [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	58,000	58,000
Fair Value, Inputs, Level 3 [Member] | Preferred stock, non-publicly traded [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	1,013,000	1,013,000
Fair Value, Inputs, Level 3 [Member] | Obligations of the U.S. Treasury and U.S. Government agencies [Member}
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed Maturity Securities		0
Share-based Compensation awards, performanced-based [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term investments		$ 0

XML

Notes Payable (Details) (USD $)	3 Months Ended			3 Months Ended											3 Months Ended
	Sep. 30, 2012	Mar. 31, 2013	Dec. 31, 2012	Mar. 31, 2013 Minimum [Member]	Mar. 31, 2013 Maximum [Member]	Mar. 31, 2013 Long-term Debt [Member]	Mar. 31, 2013 Long-term Debt [Member] London Interbank Offered Rate (LIBOR) [Member]	Mar. 31, 2013 Long-term Debt [Member] Eurodollar Reserve [Member]	Mar. 31, 2013 Long-term Debt [Member] Adjusted London Interbank Offered Rate (LIBOR) [Member] [Member]	Mar. 31, 2013 Long-term Debt [Member] Federal Funds Rate [Member]	Mar. 31, 2013 Long-term Debt [Member] Minimum [Member]	Mar. 31, 2013 Long-term Debt [Member] Minimum [Member] London Interbank Offered Rate (LIBOR) [Member]	Mar. 31, 2013 Long-term Debt [Member] Maximum [Member]	Mar. 31, 2013 Long-term Debt [Member] Maximum [Member] London Interbank Offered Rate (LIBOR) [Member]	Mar. 31, 2013 Bankers Life of Louisiana [Member] Minimum [Member]	Mar. 31, 2013 Southern Financial Life Insurance Company [Member] Minimum [Member]	Mar. 31, 2013 Insurance Company of the South [Member] Minimum [Member]	Mar. 31, 2013 Lyndon Southern Insurance Company [Member] Minimum [Member]	Mar. 31, 2013 Life of the South Insurance Company [Member] Minimum [Member]	Mar. 31, 2013 initial commitment fee [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Initiation Date						Aug. 02, 2012
Maximum balance allowed on revolving credit facility		$ 125,000,000	$ 125,000,000			$ 125,000,000
Debt Instrument, Basis Spread on Variable Rate						1.75%	1.00%	100.00%	2.75%	0.50%	1.00%	2.00%	2.00%	3.00%
Line of Credit Facility, Revolving Credit Conversion to Term Loan, Description						50.0
Line of Credit Facility, Current Borrowing Capacity						75,000,000
Line of Credit Facility, Expiration Date						Aug. 02, 2017
Line of credit, incremental amount available						50,000,000
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage				0.25%	0.45%															0.40%
Payments of Debt Issuance Costs	1,692,000
Covenant Requirement, total leverage ratio, not more than 3.50					3.50
Covenant Requirement, fixed charge coverage ratio, not less than 2.00				2.00
Covenant Requirement, reinsurance ratio, not less than 50%				50.00%
Covenant Requirement, RBC ratio, not less than 250%															250.00%	250.00%	250.00%	250.00%	250.00%
Wells Fargo Bank, N.A., credit facility, maturing August 2017		91,750,000	89,438,000
Interest rate at the end of the respective period:		2.71%	2.76%
Remainder of 2013		3,750,000
2014		5,000,000
2015		5,000,000
2016		5,000,000
2017		73,000,000
Thereafter		0
Total		$ 91,750,000
Total Leverage Ratio - Well Fargo Bank, credit facility, actual		3.13
Fixed Charge Coverage Ratio-Wells Fargo, credit facility, actual		2.75
Reinsurance Ratio-Wells Fargo Bank, credit facility, actual		69.00%
RBC Ratio - Bankers Life of Louisiana, actual		469.00%
RBC Ratio - Southern Financial Life Insurance Company, actual		2155.00%
RBC Ratio - Insurance Company of the South, actual		378.00%
RBC Ratio - Lyndon Southern Insurance Company, actual		255.00%
RBC Ratio - Life of the South Insurance Company, actual		386.00%

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Segment Results

3 Months Ended

Mar. 31, 2013

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

Segment Results

The Company conducts business through three business segments: (i) Payment Protection; (ii) BPO; and (iii) Brokerage. The revenue for each segment is presented to reflect the operating characteristics of the segment. The Company allocates certain revenues and expenses to the segments. These items consist primarily of corporate-related income, transaction related costs, executive stock compensation and other overhead expenses. Segment assets are not presented to the Company's chief operating decision maker for operational decision-making and therefore are not disclosed in the accompanying table.

The Company measures the profitability of its business segments with the allocation of Corporate revenues and expenses and without taking into account amortization, depreciation, interest expense and income taxes. The Company refers to this financial performance measure as segment EBITDA (earnings before interest, taxes, depreciation and amortization). The Company's financial measure of segment EBITDA meets the definition of a Non-GAAP financial measure and is not a recognized term under U.S. GAAP, nor is it an alternative to the U.S. GAAP financial measures presented in this Form 10-Q. The Non-GAAP financial measure in this Form 10-Q should be used in addition to, but not as a substitute for, the U.S. GAAP financial measures presented elsewhere in this Form 10-Q. The Company believes that this Non-GAAP financial measure provides useful information to management, analysts and investors regarding financial and business trends relating to the Company's results of operations and financial condition. The variability of the Company's segment EBITDA is significantly affected by segment net revenues because a large portion of the Company's operating expenses are fixed. The Company's industry peers may also provide similar supplemental Non-GAAP financial measures, although they may not use the same or comparable terminology and may not make identical adjustments. 

The following table presents the Company's business segment results:

	For the Three Months Ended
	March 31, 2013			March 31, 2012
Segment Net Revenue
Payment Protection
Service and administrative fees	$	34,200		$	17,803
Ceding commission	7,163			7,064
Net investment income	909			743
Net realized investment gains (losses)	7			(3		)
Other income	91			72
Net earned premium	33,142			31,972
Net losses and loss adjustment expenses	(10,535		)	(11,266		)
Member benefit claims	(8,978		)	(1,303		)
Commissions	(35,362		)	(31,988		)
Total Payment Protection Net Revenue	20,637			13,094
BPO	4,214			4,205
Brokerage
Brokerage commissions and fees	9,731			9,520
Service and administrative fees	444			503
Total Brokerage	10,175			10,023
Total segment net revenue	35,026			27,322
Operating Expenses
Payment Protection	14,892			7,913
BPO	3,556			3,133
Brokerage	7,203			7,085
Corporate	—			—
Total operating expenses	25,651			18,131
EBITDA
Payment Protection	5,745			5,181
BPO	658			1,072
Brokerage	2,972			2,938
Corporate	—			—
Total EBITDA	9,375			9,191
Depreciation and Amortization
Payment Protection	1,775			849
BPO	834			503
Brokerage	657			868
Total depreciation and amortization	3,266			2,220
Interest Expense
Payment Protection	957			1,012
BPO	177			267
Brokerage	310			373
Total interest expense	1,444			1,652
Income (loss) before income taxes and non-controlling interests
Payment Protection	3,013			3,320
BPO	(353		)	302
Brokerage	2,005			1,697
Corporate	—			—
Total income before income taxes and non-controlling interests	4,665			5,319
Income taxes	1,354			1,887

	For the Three Months Ended
	March 31, 2013		March 31, 2012
Segment Net Revenue
Less: net income attributable to non-controlling interests	818		18
Net income	$	2,493	$	3,414

The following table reconciles segment information to the Company's Consolidated Statements of Income and provides a summary of other key financial information for each segment:

Reconciliation of Segment Net Revenue to Total Revenue and EBITDA to Net Income	For the Three Months Ended
	March 31, 2013		March 31, 2012
Segment Net Revenue
Payment Protection	$	20,637	$	13,094
BPO	4,214		4,205
Brokerage	10,175		10,023
Segment net revenues	35,026		27,322
Net losses and loss adjustment expenses	10,535		11,266
Member benefit claims	8,978		1,303
Commissions	35,362		31,988
Total segment revenue	89,901		71,879
Operating Expenses
Payment Protection	14,892		7,913
BPO	3,556		3,133
Brokerage	7,203		7,085
Corporate	—		—
Total operating expenses	25,651		18,131
Net losses and loss adjustment expenses	10,535		11,266
Member benefit claims	8,978		1,303
Commissions	35,362		31,988
Total operating expenses before depreciation, amortization and interest expense	80,526		62,688
EBITDA
Payment Protection	5,745		5,181
BPO	658		1,072
Brokerage	2,972		2,938
Corporate	—		—
Total EBITDA	9,375		9,191
Depreciation and amortization
Payment Protection	1,775		849
BPO	834		503
Brokerage	657		868
Total depreciation and amortization	3,266		2,220
Interest Expense
Payment Protection	957		1,012
BPO	177		267
Brokerage	310		373

Reconciliation of Segment Net Revenue to Total Revenue and EBITDA to Net Income	For the Three Months Ended
	March 31, 2013			March 31, 2012
Segment Net Revenue
Total interest expense	1,444			1,652
Income (loss) before income taxes and non-controlling interests
Payment Protection	3,013			3,320
BPO	(353		)	302
Brokerage	2,005			1,697
Corporate	—			—
Total income before income taxes and non-controlling interests	4,665			5,319
Income taxes	1,354			1,887
Less: net income attributable to non-controlling interests	818			18
Net income	$	2,493		$	3,414

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Stock-Based Compensation Weighted Average Assumptions (Details)	3 Months Ended
	Mar. 31, 2013
Stock-Based Comp [Abstract]
Expected term (years)	8 years 9 months 29 days
Expected volatility	31.87%
Expected dividends	0.00%
Risk-free rate	1.54%

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Reinsurance Receivables (Tables)

3 Months Ended

Mar. 31, 2013

Reinsurance Disclosures [Abstract]

Premiums Written and Earned [Table Text Block]

The effects of reinsurance on premiums written and earned and on losses and loss adjustment expenses ("LAE") incurred are presented in the tables below:

Premiums	For the Three Months Ended
	March 31, 2013						March 31, 2012
	Written			Earned			Written			Earned
Direct and assumed	$	81,510		$	92,122		$	79,189		$	86,058
Ceded	(50,676		)	(58,980		)	(46,231		)	(54,086		)
Net	$	30,834		$	33,142		$	32,958		$	31,972

Schedule of Liability for Unpaid Claims and Claims Adjustment Expense [Table Text Block]

Losses and LAE incurred	For the Three Months Ended
	March 31, 2013			March 31, 2012
Direct and assumed	$	21,040		$	23,071
Ceded	(10,505		)	(11,805		)
Net losses and LAE incurred	$	10,535		$	11,266

Components of Reinsurance Receivable [Table Text Block]

The following table reflects the components of the reinsurance receivables:	At
	March 31, 2013		December 31, 2012
Prepaid reinsurance premiums (1):
Life	$	51,152	$	53,117
Accident and health	32,588		34,266
Property	80,893		85,805
Total	164,633		173,188
Ceded claim reserves:
Life	1,406		1,786
Accident and health	8,747		9,263
Property	9,083		8,663
Total ceded claim reserves recoverable	19,236		19,712
Other reinsurance settlements recoverable	13,038		11,088
Reinsurance receivables	$	196,907	$	203,988
(1)  Including policyholder account balances ceded.

The following table shows the amount included in reinsurance receivable that is recoverable from three unrelated insurers:

	At
	March 31, 2013		December 31, 2012
Total recoverable from three unrelated reinsurers	$	125,707	$	126,633

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Notes Payable

3 Months Ended

Mar. 31, 2013

Payables and Accruals [Abstract]

Debt Disclosure [Text Block]

Note Payable

The Company's Notes Payable consisted of the following:	At
	March 31, 2013			December 31, 2012
Wells Fargo Bank, N.A., credit facility, maturing August 2017	$	91,750		$	89,438
Maximum balance allowed on Wells Fargo Bank, N.A credit facility	$	125,000		$	125,000
Interest rate at the end of the respective period:	2.71		%	2.76		%

Aggregate maturities for the Company's note payable at March 31, 2013 are as follows:

Remainder of 2013	$	3,750
2014	5,000
2015	5,000
2016	5,000
2017	73,000
Thereafter	—
Total	$	91,750

$125.0 million Secured Credit Agreement - Wells Fargo Bank, N.A.

At March 31, 2013, the Company had a $125.0 million secured credit agreement (the "Credit Agreement"), entered into on August 2, 2012, with a syndicate of lenders, among them Wells Fargo Bank, N.A., who also serves as administrative agent ("Wells Fargo" or the "Administrative Agent"). The Credit Agreement has a five year term and provides for a $50.0 million term loan facility (the "Term Loan Facility"), as well as a $75.0 million revolving credit facility (the "Revolving Facility" and collectively with the Term Loan Facility, the "Facilities") with a sub-limit of $10.0 million for swingline loans and $10.0 million for letters of credit. Subject to earlier termination, the Credit Agreement terminates on August 2, 2017. The Credit Agreement includes a provision pursuant to which, from time to time, the Company may request that the lenders in their discretion increase the maximum amount of commitments under the Facilities by an amount not to exceed $50.0 million. 

At the Company's election, borrowings under the Revolving Facility will bear interest either at the base rate plus an applicable interest margin or the adjusted LIBO rate plus an applicable interest margin; provided, however, that all swingline loans will be base rate loans. The base rate is a fluctuating interest rate equal to the highest of: (i) Wells Fargo's publicly announced prime lending rate; (ii) the federal funds rate plus0.50%; and (iii) the adjusted LIBO rate, determined on a daily basis for an interest period of one month, plus1.0%. The adjusted LIBO rate is the rate per annum obtained by dividing (i) the London interbank offered rate ("LIBOR") for such interest period by (ii) a percentage equal to 1.00 minusthe Eurodollar Reserve Percentage (as defined in the Credit Agreement). The interest margin over the adjusted LIBO rate, initially set at 2.75%, may increase (to a maximum amount of 3.0%) or decrease (to a minimum amount of 2.0%) based on changes in our leverage ratio. The interest margin over the base rate, initially set at 1.75%, may increase (to a maximum amount of 2.0%) or decrease (to a minimum amount of 1.0%) based on changes in our leverage ratio.

In addition to interest payable on the principal amount of indebtedness outstanding from time to time under the Credit Agreement, the Company is required to pay a commitment fee, initially equal to 0.40% per annum of the unused amount of the Revolving Facility. The percentage rate of such fee may increase (to a maximum amount of 0.45%) or decrease (to a minimum amount of 0.25%) based on changes in the Borrowers' leverage ratio. The amount of outstanding swingline loans is not considered usage of the Revolving Facility for the purpose of calculating the commitment fee. The Company is also required to pay letter of credit participation fees on the undrawn amount of all outstanding letters of credit. The Company paid fees of approximately $1.7 million to Wells Fargo in connection with the execution of the Credit Agreement, which have been capitalized and are being amortized using a straight line method over the life of the Credit Agreement.

The Company, at its option, may prepay any borrowing, in whole or in part, at any time and from time to time without premium or penalty. However, after the end of our fiscal year (commencing with the fiscal year ending December 31, 2015), the Company is required to make mandatory principal prepayments of loans under the Facilities in an amount determined under the Credit Agreement based upon a percentage of the Company's Excess Cash Flow (as defined in the Credit Agreement) minus certain offset amounts relating to permitted acquisitions.

The Credit Agreement contains certain customary representations, warranties and covenants applicable to us for the benefit of the Administrative Agent and the lenders. The Company may not assign, sell, transfer or dispose of any collateral or effect certain changes to the Company's capital structure and the capital structure of our subsidiaries without the Administrative Agent's prior consent. The Company's obligations under the Facilities may be accelerated or the commitments terminated upon the occurrence of an event of default under the Credit Agreement, including payment defaults, defaults in the performance of affirmative and negative covenants, the inaccuracy of representations or warranties, bankruptcy and insolvency related defaults, cross defaults to other material indebtedness, defaults arising in connection with changes in control and other customary events of default.

The Credit Agreement also contains financial covenants which the Company must maintain. See the section below, "Financial Covenants" for a presentation of the Company's more significant covenants associated with the Credit Agreement.

Financial Covenants

At March 31, 2013 and December 31, 2012, respectively, the Company was required to comply with various financial covenants set forth in the Credit Agreement. The following describes the Credit Agreement's more significant financial covenants in effect at March 31, 2013 and the calculations used to arrive at each ratio:

Total Leverage Ratio - the ratio of (i) Consolidated Total Debt as of such date to (ii) Consolidated Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("Adjusted EBITDA")for the Measurement Period ending on or immediately prior to such date.

Fixed Charge Coverage Ratio - the ratio of (a) Consolidated Adjusted EBITDA less the actual amount paid by the Borrowers and their Subsidiaries in cash on account of Capital Expenditures less cash taxes paid by the Borrowers and their Subsidiaries to (b) Consolidated Fixed Charges, in each case for the Measurement Period ending on or immediately prior to such date.

Reinsurance Ratio - the ratio (expressed as a percentage) of (a) the aggregate amounts recoverable by the Borrowers and its Subsidiaries from reinsurers divided by (b) the sum of (i) policy and claim liabilities plus (ii) unearned premiums, in each case of the Borrowers and their Subsidiaries determined in accordance with GAAP.

RBC Ratio - the ratio (expressed as a percentage) of NAIC RBC (as defined in the NAIC standards) for any Regulated Insurance Company on an individual basis, calculated at the end of any Fiscal Year, to the "authorized control level" (as defined in the NAIC standards).

The following is a summary of the Credit Agreement's more significant financial covenants calculated at March 31, 2013, except for the RBC Ratios, which under the Credit Agreement reflect the ratios calculated as of the most recent fiscal year end, in this case December 31, 2012:

		Actual At
Covenant	Covenant Requirement	March 31, 2013
Total leverage ratio	not more than 3.50	3.13
Fixed charge coverage ratio	not less than 2.00	2.75
Reinsurance ratio	not less than 50%	69.0%
		Actual At
RBC Ratios:		December 31, 2012
RBC Ratio - Bankers Life of Louisiana	not less than 250%	469.0%
RBC Ratio - Southern Financial Life Insurance Company	not less than 250%	2,155.0%
RBC Ratio - Insurance Company of the South	not less than 250%	378.0%
RBC Ratio - Lyndon Southern Insurance Company	not less than 250%	255.0%
RBC Ratio - Life of the South Insurance Company	not less than 250%	386.0%