Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.

Indicate the number of shares outstanding of each of the issuer's classes of common stock as of MayAugust 1, 2010:

Index to Exhibits located on page 24.26.

See notes to condensed consolidated financial statements.

See notes to condensed consolidated financial statements.

See notes to condensed consolidated financial statements.

Other investments, if any, are carried at either market value or cost, depending on the nature of the investment.  Short-term investments are carried at cost which approximates their fair values.

Realized gains and losses on disposals of investments are determined by specific identification of cost of investments sold and are included in income.  All fixed maturity and equity securities are considered to be available for sale; the related unrealized net gains or losses (net of applicable tax effect) are reflected directly in shareholders’ equity.

In April 2009, the FASB issued guidance on the recognition and presentation of other-than-temporary impairments, or FASB OTTI guidance.  The FASB OTTI guidance applies to fixed maturity securities only and provides new guidance on the recognition and presentation of other-than-temporary impairments.  In addition, the FASB OTTI guidance requires additional disclosures related to other-than-temporary impairments.   Under this revised guidance, if a fixed maturity security is in an unrealized loss position and the Company has the intent to sell the fixed maturity security, or it is more likely than not that the Company will have to sell the fixed maturity security before recovery of its amortized cost basis, the decline in value is deemed to be other-than-temporary and is recorded to net realized losses on investments in the consolidated statements of operations.   For impaired fixed maturity securities that the Company does not intend to sell or it is more likely than not that the Company will not have to sell such securities,

but the Company expects that it will not fully recover the amortized cost basis, the credit component of the other-than-temporary impairment is recognized in net realized losses on investments in the consolidated statements of operations and the non-credit component of the other-than-temporary impairment is recognized directly in shareholder’sshareholders’ equity (accumulated other comprehensive income).

The credit component of an other-than-temporary impairment is determined by comparing the net present value of projected future cash flows with the amortized cost basis of the fixed maturity security.  The net present value is calculated by discounting the Company’s best estimate of projected future cash flows at the effective interest rate implicit in the fixed maturity security at the date of acquisition.  For mortgage-backed and asset-backed securities, cash flow estimates are based on assumptions regarding the underlying collateral including prepayment speeds, vintage, type of underlying asset, geographic concentrations, default rates, recoveries and changes in value. For all other debt securities, cash flow estimates are driven by assumptions regarding probability of default, including changes in credit rati ngs,ratings, and estimates regarding timing and amount of recoveries associated with a default.  Furthermore, unrealized losses caused by non-credit related factors related to fixed maturity securities for which the Company expects to fully recover the amortized cost basis continue to be recognized in accumulated other comprehensive income.

The unrealized net gains or losses (net of applicable tax effect) related to equity securities are reflected directly in shareholders’ equity, unless a decline in value is determined to be other-than-temporary, in which case the loss is charged to income.  In determining if and when a decline in market value below cost is other-than-temporary, an objective analysis is made of each individual security where current market value is less than cost.   For any equity security where the unrealized loss exceeds 20% of original or adjusted cost, and where that decline has existed for a period of at least six months, the decline is treated as an other-than-temporary impairment, subject to an evaluation as to possible future recovery.  Additionally, the Company takes into account any known subjective informa tioninformation in evaluating for impairment without consideration to the Company’s quantitative criteria defined above.

The following is a summary of investments at March 31,June 30, 2010 and December 31, 2009:

The Company has no other-than-temporarily impaired fixed maturity securities at March 31,June 30, 2010.  Additionally, the Company had no other-than-temporary impairment losses relating to fixed maturity securities recognized in accumulated other comprehensive income during the threesix months ended March 31, 2010.June 30, 2010 and 2009.

The following table summarizes, for fixed maturity and equity security investments in an unrealized loss position at March 31,June 30, 2010 and December 31, 2009, respectively, the aggregate fair value and gross unrealized loss categorized by the duration those securities have been continuously in an unrealized loss position.

The fair value and the cost or amortized cost of fixed maturity investments, at March 31,June 30, 2010, by contractual maturity, are shown below.  Actual maturities may differ from contractual maturities because borrowers have, in some cases, the right to call or prepay obligations with or without call or prepayment penalties. Pre-refunded municipal bonds are classified based on their pre-refunded call dates.

Following is a summary of the components of net gains (losses) on investments for the periods presented in the accompanying statements of operations.income.

Gain and loss activity for fixed maturity and equity security investments, as shown in the previous table, include adjustments for other-than-temporary impairment as summarized below:

The net incomeloss from limited partnerships for the quarter and year-to-date ending March 31,June 30, 2010 includesinclude an estimated $2,740$6,447 and $7,243, respectively, of unrealized gainslosses reported to the Company as part of the operations of the various limited partnerships.  Shareholders’ equity at March 31,June 30, 2010 includes approximately $25,372,$23,115, net of deferred federal income taxes, of earnings undistributed by limited partnerships.

The following table summarizes the Company’s transactions with reinsurers for the 2010 and 2009 comparative periods.

Net comprehensive incomeloss for the quarter ended March 31,June 30, 2010 was $4,622$5,234 and compares to net comprehensive income of $154$23,888 for the quarter ended March 31,June 30, 2009.  For the first six months ended June 30, 2010, net comprehensive loss was $612 and compares to net comprehensive income of $24,042 for the six months ended June 30, 2009.

The Company has two reportable business segments in its operations:  Property and Casualty Insurance and Reinsurance.

The Property and Casualty Insurance segment provides multiple line insurance coverage primarily to fleet transportation companies as well as to independent contractors who contract with fleet transportation companies.  In addition, the Company provides private passenger automobile products to individuals, and writes commercial multi-peril and professional liability products on a limited basis.

The Reinsurance segment accepts property and casualty cessions from other insurance companies as well as retrocessions from selected reinsurance companies, principally reinsuring against catastrophes.   Beginning in 2010, the Reinsurance segment accepts selected professional liability cessions from other insurance companies.

The following table provides certain revenue and profit and loss information for each reportable segment.  All amounts presented are computed based upon U.S. generally accepted accounting principles.  Segment profit for Property and Casualty Insurance includes the direct marketing agency operations conducted by the parent company for this segment and is computed after elimination of inter-company commissions.

The following table reconciles reportable segment profit to the Company’s consolidated income before federal income taxes, respectively.

Segment profit includes both net premiums earned and fees and other income.

Management does not identify or allocate assets to reportable segments when evaluating segment performance and depreciation expense is not material for any of the reportable segments.

From 2000 through 2002, the Company provided loans to certain employees for the sole purpose of purchasing the Company’s Class B common stock in the open market.  Principal and interest totaling $1,938$1,854 relating to such loans remains outstanding at March 31,June 30, 2010 and carry interest rates of between 4.75% and 6%, payable annually on the loan anniversary date.  The underlying securities serve as collateral for these loans, which must be repaid no later than 10 years from the date of issue. No additional loans will be made under this program.

The Company has $10,000 outstanding as of both March 31,June 30, 2010 and December 31, 2009, under the Company’s revolving line of credit at variable interest rates detailed below.  The Company has $10,000 remaining unused under the revolving line of credit.  The $10,000 of borrowings was used principally for treasury stock repurchases.

As of March 31,June 30, 2010, the Company’s 2005 and subsequent tax years remain subject to examination by the IRS.  The effective rate differs from the normal statutory rate primarily as a result of tax-exempt investment income.

Assets and liabilities recorded at fair value in the consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair value. The following tables summarize fair value measurements by level for assets measured at fair value on a recurring basis:

Level inputs, as defined by FASB Fair Value Measurements, are as follows:

The Level 3 assets consist of an investment portfolio of insurance-linked securities.  The insurance-linked securities are valued using the average of estimated market value from multiple insurance-linked securities brokers.  The broker quotes include Level 3 inputs which are significant to the valuation of the insurance-linked securities. A reconciliation of the beginning and ending balances of assets measured at fair value on a recurring basis using Level 3 inputs is as follows:

We attempt to obtain quoted market prices for these disclosures whenever possible.  Where quoted market prices are not available, fair values are estimated using present value or other valuation techniques.  These techniques are significantly affected by our assumptions, including discount rates and estimates of future cash flows.  Potential taxes and other transaction costs have not been considered in estimating fair values.

Non-financial instruments such as real estate, property and equipment, other assets, deferred income taxes and intangible assets, and certain financial instruments such as policy reserve liabilities are excluded from the fair value disclosures.  Therefore, the fair value amounts cannot be aggregated to determine the underlying economic value to the Company.

The carrying amounts reported in the consolidated balance sheets for cash, accounts receivables, reinsurance recoverable, notes receivable, accounts payable and accrued expenses, income taxes payable, short term borrowings and unearned income approximate fair value because of the short term nature of these items.

There were no significant transfers of assets between level 1 and level 2 during the first quarter 2010.

Effective June 11, 2009, the Company issued 20,900 shares of class B restricted stock to the Company’s outside directors.  The restricted shares will bebecame fully vested on May 5, 2010 and were paid solely in an equal number of shares of the Company’s class B stock.  The restricted shares represent the annual retainer compensation for the outside directors and will vest on May 5,for the period July 1, 2009 through June 30, 2010.  Vesting will be accelerated only on the condition of death, disability, or change in control of the Company.  Each restricted share iswas valued at $21.05 per share representing a total value of $440.  Compensation expense related to the above stock grant is to bewas recognized over the period in which the directors renderrendered the services which will also coincide with the vesting period.   The new directors’ stock plan will be presented to shareholders for approval at the May 2010 annual shareholders meeting.services.

The Company generally experiences positive cash flow from operations resulting from the fact that premiums are collected on insurance policies in advance of the disbursement of funds in payment of claims.  Operating costs of the property/casualty insurance subsidiaries, other than loss and loss expense payments and commissions paid to related agency companies, generally average less than 30% of premiums earned and the remaining amount is available for investment for varying periods of time pending the settlement of claims relating to the insurance coverage provided. The Company’s cash flow relating to premiums is significantly affected by reinsurance programs in effect from time-to-time whereby the Company cedes both premium and risk to other insurance and reinsurance companies.  These programs vary significantly among products. For the first threesix months of 2010, the Company experienced positive cash flow from operations totaling $11.7$24.8 million which compares to negative cash flow from operations of $1.2$5.5 million generated during the first threesix months of 2009.  The $12.9$30.3 million improvement in cash flow from the 2009 period is primarily due to higher net premiums received and lower gross loss payments, along with lower operating expenses and the timing of tax payments.  These increases were partially offset by a decline in investment income.income received.

For several years, the Company's investment philosophy has emphasized the purchase of relatively short-term instruments with maximum quality and liquidity.  The average life of the Company's fixed income (bond and short-term investment) portfolio was 3.7 years at March 31,June 30, 2010, which is substantially shorter than the Company’s liability duration.

Financing activity for the first threesix months of 2010 included regular and extra dividend payments of $7.4$11.1 million ($.50.75 per share).

The Company’s assets at March 31,June 30, 2010 included $40.9$46.6 million in investments classified as cash equivalents that were readily convertible to cash without significant market penalty.  An additional $154.4$181.3 million of fixed maturity investments will mature within the twelve-month period following March 31,June 30, 2010.   The Company believes that these liquid investments are more than sufficient to provide for projected claim payments and operating cost demands.

Consolidated shareholders’ equity is composed largely of GAAP shareholders’ equity of the insurance subsidiaries.  As such, there are statutory restrictions on the transfer of portions of this equity to the parent holding company. At March 31,June 30, 2010, $50.9$47.1 million may be transferred by dividend or loan to the parent company during the remainder of 2010 without approval by, or prior notification to, regulatory authorities.  An additional $233.8$229.5 million of shareholder’s equity of the insurance subsidiaries could, theoretically, be advanced or loaned to the parent holding company with prior notification to, and approval from, regulatory authorities, although it is unlikely that transfers of this size would be practical.  The Company believes that these restrictions pose no material liquidity con cernsconcerns to the Company.  The Company also believes that the financial strength and stability of the subsidiaries would permit ready access by the parent