Until the expiration date (as defined below), Conifer Holdings, Inc. (the “Company,” “Conifer,” “our,” “we” or “us”) is offering, upon the terms and subject to the conditions set forth in this prospectus (the “Prospectus”), to exchange any and all validly tendered, not validly withdrawn and validly accepted outstanding 6.75% Senior Unsecured Notes due 2023 for 9.75% Senior Unsecured Notes due 2028 (the “Exchange Offer”), to be newly issued by the Company. We refer to our 6.75% Senior Unsecured Notes due 2023 as the “Existing Notes” and to our 9.75% Senior Unsecured Notes due 2028 as the “New Notes”.

The New Notes will bear interest at the rate of 9.75% per year, and interest on the New Notes will be payable quarterly in arrears on   ,   ,    and    of each year, beginning on   , 2023. The New Notes will mature on   , 2028. We may redeem the New Notes, in whole or in part at any time or from time to time on or after   , 2025, at the redemption price of 100% aggregate principal amount, plus any accrued and unpaid interest, as discussed under “Description of the New Notes — Optional Redemption” in this Prospectus. The New Notes will be issued in denominations of $25 and any integral multiples of $25.

The New Notes will be unsecured obligations of ours only and will not be obligations of or guaranteed by any of our subsidiaries. The New Notes will rank senior in right of payment to any of the Company’s existing and future indebtedness that is by its terms expressly subordinated or junior in right of payment to the New Notes. The New Notes will rank equally in right of payment to all of our existing and future senior indebtedness, including the Existing Notes, but will be effectively subordinated to any secured indebtedness to the extent of the value of the collateral securing such secured indebtedness. In addition, the New Notes will be structurally subordinated to the indebtedness and other obligations of the Company’s subsidiaries. The New Notes will not be subject to repayment at the option of the holder at any time prior to maturity and will not be entitled to any sinking fund.

If you elect to participate in the Exchange Offer, for each $25 principal amount of our Existing Notes you tender, you will receive from us $25 principal amount of our New Notes. The New Notes will be issued in minimum denominations of $25 and any integral multiples of $25 in excess thereof or in units, each representing $25.

You may also give an indication of your interest in participating in the new money offering (the “New Offering”) in which we are offering up to $25,000,000 principal amount of additional New Notes. You are not obligated to tender any of your Existing Notes in exchange for New Notes in order to participate in the New Offering.

The Exchange Offer is open to all holders of our Existing Notes, and will expire at 5:00 p.m., New York City time, on  , 2023, or such later time and date to which we may extend the Exchange Offer (such date and time, including any extension, is referred to as the “expiration date”). Completion of the Exchange Offer is not conditioned on the tender of, or our acceptance of, any minimum aggregate principal amount of Existing Notes. We may withdraw the Exchange Offer at any time prior to the expiration date.

The Existing Notes are listed on the Nasdaq Global Market, under the symbol “CNFRL”, however, following completion of the Exchange Offer, Nasdaq may consider delisting of the Existing Notes if it determines that the extent of the public distribution or aggregate amount of Existing Notes outstanding makes continued listing inadvisable. Conifer has applied to list the New Notes on the Nasdaq Global Market under the symbol “CNFRZ.” No assurance can be given as to the approval of the New Notes for listing or, if listed, the continued listing for the term of the New Notes, or the liquidity or trading market for the New Notes. We are not required to maintain a listing of the New Notes on the Nasdaq Global Market or any other exchange. If the listing is approved, trading of the New Notes on the Nasdaq Global Market is expected to commence within 30 days after the initial delivery of the New Notes. Currently, there is no public market for the New Notes.

Our board of directors has approved the Exchange Offer. However, neither we nor any of our management, our board of directors, or the information agent, the exchange agent, or the dealer managers for the Exchange Offer is making any recommendation as to whether holders of Existing Notes should tender all or part of their Existing Notes in exchange for New Notes in the Exchange Offer. Each holder of Existing Notes must make its own decision as to whether to exchange some or all of its Existing Notes.

The New Notes in the New Offering are being offered to the public on a reasonable best efforts basis. There is no minimum purchase requirement, closing of the New Offering is not conditioned on our receipt of any minimum amount of proceeds, and there is no arrangement to place the proceeds of the New Offering in an escrow, trust or similar account pending the closing of the New Offering.

We have retained Janney Montgomery Scott LLC and American Capital Partners, LLC as the dealer managers for the Exchange Offer and as the placement agents for the New Offering. In their capacity as placement agents for the New Offering, the placement agents will use their reasonable best efforts to solicit offers to purchase New Notes in the New Offering. The placement agents have no obligation to buy any of the New Notes from us or to arrange for the purchase or sale of any specific number or dollar amount of the New Notes. See “Plan of Distribution” for more information regarding these arrangements.

NONE OF THE COMPANY, THE DEALER MANAGERS, THE INFORMATION AGENT, THE EXCHANGE AGENT (DEFINED BELOW), THE EXISTING NOTES TRUSTEE (DEFINED BELOW), OR THE NEW NOTES TRUSTEE (DEFINED BELOW) MAKES ANY RECOMMENDATION AS TO WHETHER OR NOT HOLDERS SHOULD TENDER THEIR EXISTING NOTES OR PARTICIPATE IN THE NEW OFFERING. FURTHER, NONE OF THE DEALER MANAGERS, THE EXCHANGE AGENT, THE EXISTING NOTES TRUSTEE, OR THE NEW NOTES TRUSTEE ARE RESPONSIBLE OR LIABLE FOR THE CONTENTS OF THIS PROSPECTUS.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this Prospectus. Any representation to the contrary is a criminal offense.

See “Risk Factors” beginning on page 19 for a discussion of factors you should consider before deciding to participate in the Exchange Offer or purchase New Notes in the New Offering.

We have retained Alliance Advisors, LLC as an information agent in connection with the Exchange Offer.

The dealer managers for the Exchange Offer and the Placement Agents for the New Offering are:

We have not, and the dealer managers, information agent, exchange agent and placement agents have not, authorized any person to give any information or to make any representations in connection with the Exchange Offer or the New Offering other than those contained or incorporated or deemed to be incorporated by reference in this Prospectus and any free writing prospectus, and if given or made, such information or representations must not be relied upon as having been so authorized. This Prospectus does not constitute an Exchange Offer or an offer to sell or a solicitation of an offer to buy New Notes by anyone in any jurisdiction in which such offer or solicitation is not authorized, or in which the person is not qualified to do so or to any person to whom it is unlawful to make such offer or solicitation. We are not aware of any U.S. state or jurisdiction where the making of the Exchange Offer is not in compliance with applicable law. If we become aware of any U.S. state or jurisdiction where the making of the Exchange Offer or the acceptance of the Existing Notes or issuance of New Notes pursuant to the Exchange Offer is not in compliance with applicable law, we will make a good faith effort to comply with the applicable law. If, after such good faith effort, we cannot comply with the applicable law, the Exchange Offer will not be made to, nor will tenders be accepted from or on behalf of, holders of Existing Notes who reside in U.S. states or jurisdictions where an offer, solicitation or sale would be unlawful.

Neither the delivery of this Prospectus nor any sale hereunder shall, under any circumstances, create any implication that there has been no change in our affairs since the date hereof or thereof, that the information contained herein or therein is correct as of any time subsequent to its date, or that any information incorporated or deemed to be incorporated by reference herein or therein is correct as of any time subsequent to its date.

This Prospectus incorporates important business and financial information about Conifer and its subsidiaries that is not included in or delivered with this Prospectus. This information is available without charge upon request. See “Where You Can Find More Information” in this Prospectus.

Unless otherwise indicated, information contained in this Prospectus concerning our industry and the markets in which we operate, including our general expectations and market position, market opportunity and market share, is based on information from our own management estimates and research, as well as from industry and general publications and research, surveys and studies conducted by third parties. Management estimates are derived from publicly available information, our knowledge of our industry and assumptions based on such information and knowledge, which we believe to be reasonable. Assumptions and estimates of our and our industry’s future performance are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described in “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022. These and other factors could cause our future performance to differ materially from our assumptions and estimates. See “Special Note Regarding Forward-Looking Statements and Industry Data” in this Prospectus.

“Conifer Insurance Company,” “White Pine Insurance Company” and our green Conifer logo are the subject to a trademark in the United States. Other brands, names and trademarks contained in this Prospectus are the property of their respective owners. Solely for convenience, trademarks and tradenames referred to in this Prospectus appear without the ^® and ™ symbols, but those references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or that the applicable owner will not assert its rights, to these trademarks and tradenames.

This Prospectus, including the sections titled “Prospectus Summary” and “Risk Factors” contain forward-looking statements. Forward-looking statements convey our current expectations or forecasts of future events. You can identify forward-looking statements by terminology such as “anticipates,” “believes,” “can,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “predicts,” “potential,” “seeks,” “should,” “will,” or “would,” or the negative of these terms, or similar expressions.

Unless otherwise indicated, information contained in this Prospectus concerning our industry and the markets in which we operate, including our general expectations and market position, market opportunity, and market share, is based on information from various sources (including industry publications, surveys and forecasts, and our internal research), on assumptions that we have made, which we believe are reasonable, based on those data and other similar sources and on our knowledge of the markets for our services. While we believe the market position, market opportunity, and market share information included in this Prospectus is generally reliable, such information is inherently imprecise. In addition, projections, assumptions, and estimates of our future performance and the future performance of the industry in which we operate are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described in “Risk Factors” and elsewhere in this Prospectus. These and other factors could cause results to differ materially from those expressed in the estimates included in this Prospectus.

There are a number of important factors that could cause our actual results to differ materially from the results anticipated by these forward-looking statements. These important factors include, but are not limited to:

You should read these factors and the other cautionary statements made in this Prospectus as being applicable to all related forward-looking statements wherever they appear in this Prospectus. If one or more of these factors materialize, or if any underlying assumptions prove incorrect, our actual results, performance or achievements may vary materially from any future results, performance or achievements expressed or implied by these forward-looking statements. We undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Any forward-looking statement made by us speaks only as of the date on which we make it, and is expressly qualified in its entirety by the foregoing cautionary statements.

We have filed registration statements on Forms S-1 and S-4 with the Securities and Exchange Commission, or SEC, for the Exchange Offer and the New Offering. This Prospectus does not include all of the information contained in the registration statements. You should refer to the registration statements and their exhibits for additional information. Although we have disclosed the material terms of any contracts, agreements, or other documents that are referenced in this Prospectus, you should refer to the exhibits attached to the registration statements for copies of the actual contracts, agreements, or other documents.

We maintain a website at www.cnfrh.com. On our website, we make available free of charge our most recent Annual Report on Form 10-K, including our audited consolidated financial statements, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports as soon as reasonably practicable after we electronically file or furnish such materials to the SEC. The content of our website is not incorporated by reference into our registration statement on Form S-4 and Form S-1 or in any other report or document we file with the SEC, and any references to our website are intended to be inactive textual references only.

We file annual, quarterly and current reports and other information with the SEC. You may read and copy any document we file at the SEC’s public reference room in Washington, D.C. Please call the SEC at 1-800-SEC-0330 for further information on the public reference rooms. Our SEC filings are also available to the public from the SEC’s website at www.sec.gov.

If you would like additional copies of this Prospectus, or if you have questions about the Exchange Offer, you should contact:

To ensure timely delivery of any requested information, holders of Existing Notes must make any request no later than   , 2023, which is five business days before the expiration date of the Exchange Offer, or, if we decide to extend the expiration date of the exchange offer, no later than five business days before such extended expiration date.

You should read the following risk factors carefully, along with the forward-looking information and other information contained in this Prospectus before you decide to exchange your Existing Notes for New Notes in the Exchange Offer or purchase New Notes for cash in the New Offering. Any of the following risks could materially and adversely affect our business, operating results, financial condition and the actual outcome of matters as to which forward-looking statements are made in this Prospectus. While we believe we have identified and discussed below the key risk factors affecting our business, there may be additional risks and uncertainties that are not presently known or that are not currently believed to be significant that may adversely affect our business, operating results or financial condition in the future. The occurrence of any of these risks might cause you to lose all or part of your investment.

Our business is subject to numerous risks and uncertainties. We have listed below the material risk factors applicable to us. These material risks include, but are not limited to, the following:

Insurance companies’ financial condition and results of operations depend upon their ability to accurately assess the potential losses and loss adjustment expenses under the terms of the insurance policies they underwrite. Reserves do not represent an exact calculation of liability. Rather, reserves represent an estimate of what the expected ultimate settlement and administration of claims will cost, and the ultimate liability may be greater or less than the current estimate. In the insurance industry, there is always the risk that reserves may prove inadequate as it is possible for insurance companies to underestimate the cost of claims. There has been considerable adverse development reported by the Company in recent years.

We base our estimates on our assessment of known facts and circumstances, as well as estimates of future trends in claim severity, claim frequency, judicial theories of liability and other factors. These variables are affected by both internal and external events that could increase our exposure to losses, including changes in actuarial projections, claims handling procedures, inflation, severe weather, climate change, economic and judicial trends, and legislative changes. We continually monitor reserves using new information on reported claims and a variety of statistical techniques to update our current estimate. Our estimates could prove to be inadequate, and this underestimation could have a material adverse effect on our financial strength.

The uncertainties we encounter in establishing our loss reserves include:

If any of our insurance reserves should prove to be inadequate for the reasons discussed above, or for any other reason, we will be required to increase reserves, resulting in a reduction in our net income and shareholders’ equity in the period in which the deficiency is identified. Such adverse development can result in the unplanned need for additional capital, which may need to be obtained through the sale of assets or additional issuance of common stock which could dilute current shareholder value.

In general, the premiums for our insurance policies are established at the time a policy is issued and, therefore, before all of our underlying costs are known. Like other insurance companies, we rely on estimates and assumptions in setting our premium rates. Establishing adequate premium rates is necessary, together with investment income, to generate sufficient revenue to offset losses, LAE and other underwriting costs and to earn a profit. If we do not accurately assess the risks that we underwrite, we may not charge adequate premiums to cover our losses and expenses, which would adversely affect our results of operations and our profitability. Alternatively, we could set our premiums too high, which could reduce our competitiveness and lead to lower revenues. Pricing involves the acquisition and analysis of historical loss data and the projection of future trends, loss costs and expenses, and inflation trends, among other factors, for each of our products in multiple risk tiers and many different markets. In order to accurately price our policies, we must:

We seek to implement our pricing accurately in accordance with our assumptions. Our ability to undertake these efforts successfully and, as a result, accurately price our policies, is subject to a number of risks and uncertainties, including:

In addition, as a result of current industry non-weather factors, such as the increase in litigation surrounding the Assignment of Benefits claims and lawsuits in Florida, in particular, we may experience additional losses that could adversely affect our financial position and results of operations.

We intend to continue to grow our business, which could require additional capital, systems development and skilled personnel. In the ordinary course of business, we review potential acquisitions, divestitures and other strategic transactions to grow the business. We cannot assure you that we will be able to locate profitable business

opportunities, meet our capital needs, expand our systems and our internal controls effectively, allocate our human resources optimally, identify qualified employees or agents or incorporate effectively the components of any businesses we may acquire in our effort to achieve growth. The failure to manage our growth effectively and maintain underwriting discipline could have a material adverse effect on our business, financial condition and results of operations.

We compete with a large number of other companies in our selected lines of business. Many of our competitors are substantially larger and may enjoy better name recognition, substantially greater financial resources, higher financial strength ratings by rating agencies, broader and more diversified product lines and more widespread agency relationships than we do. Insurers in our markets generally compete on the basis of price, consumer recognition, coverages offered, claims handling, financial stability, customer service and geographic coverage. Although pricing is influenced to some degree by that of our competitors, it is not in our best interests to compete solely on price, and we may from time-to-time experience a loss of market share during periods of intense price competition. A number of new, proposed or potential legislative or industry developments could further increase competition in our industry including, but not limited to:

There is no assurance that we will be able to continue to compete successfully in the insurance markets in which we participate. Increased competition in our market could result in a change in the supply and/or demand for insurance, affect our ability to price our products at risk-adequate rates and retain existing business, or underwrite new business on favorable terms. If this increased competition so limits our ability to transact business, our operating results could be adversely affected.

Our business is dependent upon the uninterrupted functioning of our information technology and telecommunication systems. We rely upon our systems, as well as the systems of our vendors, to underwrite and process our business; make claim payments; provide customer service; provide policy administration services, such as endorsements, cancellations and premium collections; comply with insurance regulatory requirements; and perform actuarial and other analytical functions necessary for pricing and product development.

Our systems may be damaged, disrupted, or shut down due to unauthorized access, malicious software, undetected intrusion, hardware failures, or other events, and in these circumstances our disaster recovery planning may be ineffective or inadequate. Information technology security threats from user error to cybersecurity attacks are increasing in frequency and sophistication. These threats pose a risk to the security of our systems and networks and the confidentiality, availability and integrity of our data. The potential consequences of a material cybersecurity attack include reputational damage, litigation with third parties, and increased cybersecurity protection and remediation costs. A sustained business interruption or system failure could adversely impact our ability to process our business, provide customer service, pay claims in a timely manner or perform other necessary business functions. We could also be subject to fines and penalties related to a security breach. The cost to remedy a severe breach could be substantial.

Our property insurance business is exposed to the risk of severe weather conditions and other catastrophes. Catastrophes can be caused by various events, including natural events such as hurricanes, winter weather, tornadoes, windstorms, earthquakes, hailstorms, severe thunderstorms, fires and other non-natural events such as explosions or riots.

The incidence and severity of catastrophes and severe weather conditions are inherently unpredictable. The extent of losses from a catastrophe is a function of both the total amount of insured exposure in the area affected by the event and the severity of the event. Severe weather conditions and catastrophes can cause greater losses in our property lines and cause our liquidity and financial condition to deteriorate. In addition, our inability to obtain reinsurance coverage at reasonable rates and in amounts adequate to mitigate the risks associated with severe weather conditions and other catastrophes could have a material adverse effect on our business and results of operations.

Our distribution model depends almost entirely on the agencies that distribute our products. In 2022, six independent agencies accounted for approximately 42% of our gross written premiums in our commercial lines, and four independent agencies, accounted for approximately 45% of our gross written premiums in our personal lines. We cannot assure you that these relationships, or our relationships with any of our agencies will continue. Even if the relationships do continue, they may not be on terms that are profitable for us. The termination of a relationship with one or more significant agents could result in lower premium revenue and could have a material adverse effect on our results of operations or business prospects.

Certain premiums from policyholders, where the business is produced by agents, are collected directly by the agents and forwarded to our Insurance Company Subsidiaries. In certain jurisdictions, when the insured pays its policy premium to these agents for payment on behalf of our Insurance Company Subsidiaries, the premiums might be considered to have been paid under applicable insurance laws and regulations. Accordingly, the insured would no longer be liable to us for those amounts, whether or not we have actually received the premiums from that agent. Consequently, we assume a degree of credit risk associated with agents. There may be instances where agents collect premiums but do not remit them to us and we may be required to provide the coverage set forth in the policy despite the absence of premiums. If we are unable to collect premiums from agents, underwriting profits may decline and our financial condition and results of operations could be materially and adversely affected.

Historically, insurers have experienced significant fluctuations in operating results due to competition, frequency and severity of catastrophic events, levels of capacity, adverse litigation trends, regulatory constraints, general economic conditions and other factors. The supply of insurance is related to prevailing prices, the level of insured losses and the level of capital available to the industry that, in turn, may fluctuate in response to changes in rates of return on investments being earned in the insurance industry. As a result, the insurance business historically has been a cyclical industry characterized by periods of intense price competition due to excessive underwriting capacity as well as periods when shortages of capacity increased premium levels. Demand for insurance depends on numerous factors, including the frequency and severity of catastrophic events, levels of capacity, the introduction of new capital providers, and general economic conditions. All of these factors fluctuate and may contribute to price declines generally in the insurance industry.

We cannot predict with certainty whether market conditions will improve, remain constant or deteriorate. Negative market conditions may impair our ability to underwrite insurance at rates we consider appropriate and commensurate relative to the risk assumed. If we cannot underwrite insurance at appropriate rates, our ability to transact business will be materially and adversely affected. Any of these factors could lead to an adverse effect on our business, financial condition and results of operations.

Factors, such as business revenue, economic conditions, the volatility and strength of the capital markets and inflation can all affect the business and economic environment in which we operate. These same factors affect our ability to generate revenue and profits. In an economic downturn that is characterized by higher unemployment, declining spending and reduced corporate revenues, the demand for insurance products is adversely affected, which directly affects our premium levels and profitability. Negative economic factors may also affect our ability to receive the appropriate rate for the risk we insure with our policyholders and may adversely affect the number of policies we can write, including with respect to our opportunities to underwrite profitable business. In an economic downturn, our customers may have less need for insurance coverage, cancel existing insurance policies, modify their coverage or not renew with us. Existing policyholders may exaggerate or even falsify claims to obtain higher claims payments. These outcomes would reduce our underwriting profit to the extent these factors are not reflected in the rates we charge.

Our policies include provisions to limit our exposure to known risks. In addition, we design our policy terms to manage our exposure to expanding theories of legal liability like those which have given rise to claims for lead paint, asbestos, mold, construction defects and environmental matters. Many of the policies we issue also include conditions requiring the prompt reporting of claims to us and entitle us to decline coverage in the event of a violation of that condition. Also, many of our policies limit the period during which a policyholder may bring a claim under the policy, which in many cases is shorter than the statutory period under which such claims can be brought against our policyholders.

As industry practices and legal, judicial, social and other conditions change, unexpected and unintended issues related to claims and coverage may emerge. These issues may adversely affect our business by either extending coverage beyond the underwriting intent or by increasing the size or number of claims.

It is possible that a court or regulatory authority could nullify or void any number of the provisions we put in place to limit our exposure. Regulatory authorities or courts may not interpret the limitations or exclusions that we included in the policies in the manner we intended. Or legislation could be enacted modifying or barring the use of such endorsements and limitations. These types of governmental actions could result in higher than anticipated losses and loss adjustment expenses, which could have a material adverse effect on our financial condition or results of operations. In some instances, these changes may not become apparent until sometime after we have issued insurance policies that are affected by the changes. As a result, the full extent of liability under our insurance contracts may not be known for many years after a contract is issued.

We believe that our future success depends, in large part, on our ability to retain our experienced management team and key employees, particularly our chairman and co-chief executive officer, James G. Petcoff. There can be no assurance that we can attract and retain the necessary employees to conduct our business activities on a timely basis or at all. Our competitors may offer more favorable compensation arrangements to our key management or employees to incentivize them to leave our Company. Furthermore, our competitors may make it more difficult for us to hire their personnel by offering excessive compensation arrangements to certain employees to induce them not to leave their current employment and bringing litigation against employees who do leave (and possibly us as well) to join us. The loss of any of our executive officers or other key personnel, or our inability to recruit and retain additional qualified personnel as we grow, could materially and adversely affect our business and results of operations, and could prevent us from fully implementing our growth strategies.

We are exposed to many types of operational risk, including the risk of fraud by employees and outsiders, clerical and recordkeeping errors and computer or telecommunications systems malfunctions. Our business depends on our ability to process a large number of increasingly complex transactions. If any of our operational, accounting,

or other data processing systems fail or have other significant shortcomings, we could be materially adversely affected. Similarly, we depend on our employees. We could be materially adversely affected if one or more of our employees cause a significant operational breakdown or failure, either as a result of human error or intentional sabotage or fraudulent manipulation of our operations or systems.

Third parties with whom we do business, including vendors that provide services or security solutions for our operations, could also be sources of operational and information security risk to us, including from breakdowns, failures, or capacity constraints of their own systems or employees. Any of these occurrences could diminish our ability to operate our business, or cause financial loss, potential liability to insureds, inability to secure insurance, reputational damage or regulatory intervention, which could materially adversely affect us.

As an insurance holding company, our Subsidiaries are named as defendants in various legal actions in the ordinary course of business. We believe that the outcome of presently pending matters, individually and in the aggregate, will not have a material adverse effect on our consolidated financial position, operating results or liquidity. However, the outcomes of lawsuits cannot be predicted and, if determined adversely, could require us to pay significant damage amounts or to change aspects of our operations, which could have a material adverse effect on our financial results.

Our revenues and profitability are subject to the prevailing regulatory, legal, economic, political, demographic, competitive, weather and other conditions in the principal states in which we do business. Changes in any of these conditions could make it less attractive for us to do business in such states and would have a more pronounced effect on us compared to companies that are more geographically diversified. In addition, our exposure to severe losses from localized perils, such as earthquakes, hurricanes, tropical storms, tornadoes, wind, ice storms, hail, fires, terrorism, riots and explosions, is increased in those areas where we have written significant numbers of insurance policies.

Although reinsurance makes the assuming reinsurer liable to us to the extent of the risk ceded, we are not relieved of our primary liability to our insureds as the direct insurer. We cannot be sure that our reinsurers will pay all reinsurance claims on a timely basis or at all. For example, reinsurers may default in their financial obligations to us as the result of insolvency, lack of liquidity, operational failure, fraud, asserted defenses based on agreement wordings or the principle of utmost good faith, asserted deficiencies in the documentation of agreements or other reasons. The failure of a reinsurer to pay us does not lessen our contractual obligations to insureds. If a reinsurer fails to pay the expected portion of a claim or claims, our net losses might increase substantially and adversely affect our financial condition. Any disputes with reinsurers regarding coverage under reinsurance contracts could be time-consuming, costly and uncertain of success.

Downgrades to the credit ratings of our reinsurance counterparties may result in the reduction of rating agency capital credit provided by those reinsurance contracts and could, therefore, result in a downgrade of our own credit ratings. We evaluate each reinsurance claim based on the facts of the case, historical experience with the reinsurer on similar claims and existing case law and include any amounts deemed uncollectible from the reinsurer in our reserve for uncollectible reinsurance.

Our reputation is one of our key assets. Our ability to attract and retain policyholders is highly dependent upon the external perceptions of our level of service, trustworthiness, business practices, financial condition and other subjective qualities. Negative perceptions or publicity regarding these or other matters, including from actual or alleged conduct by us or our employees, could damage our reputation. Any resulting erosion of trust and confidence among existing and potential policyholders, regulators and other parties important to the success of our business could make it difficult for us to attract new policyholders and maintain existing ones, which could have a material adverse effect on our business, financial condition and results of operations.

Our results of operations depend, in part, on the performance of our investment portfolio. We seek to hold a diversified portfolio of investments that is managed by professional investment advisory management firms in accordance with our investment policy and routinely reviewed by our Investment Committee. However, our investments are subject to general economic conditions and market risks as well as risks inherent to particular securities.

The value of our investment portfolio is subject to the risk that certain investments may default or become impaired due to deterioration in the financial condition of one or more issuers of the securities held, or due to deterioration in the financial condition of an entity that guarantees an issuer’s payments of such investments. Such defaults and impairments could reduce our net investment income and result in realized investment losses.

A severe economic downturn could cause us to incur substantial realized and unrealized investment losses in future periods, which would have an adverse impact on our financial condition, results of operations, debt and financial strength ratings, Insurance Company Subsidiaries’ capital liquidity and ability to access capital markets. In addition, losses in our investment portfolio may occur at the same time as underwriting losses and, therefore, exacerbate the adverse effect of the losses on us.

Interest rates are highly sensitive to many factors beyond our control including general economic conditions, governmental monetary policy, and political conditions.

As of December 31, 2022, we had $24.4 million of senior unsecured notes (the “Existing Notes”) outstanding and $10.5 million of subordinated notes (the “Subordinated Notes”) outstanding. The Company's line of credit matured on December 1, 2022, and was not renewed. See Note 9 ~ Debt for additional details. We are subject to risks typically associated with debt financing, such as insufficient cash flow to meet required debt service payment obligations and the inability to refinance existing indebtedness. The Existing Notes are due on September 30, 2023.

Our ability to make payments on our indebtedness is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. If we are unable to generate sufficient cash flow to service our debt and meet our other commitments, we may need to restructure or refinance all or a portion of our debt, sell material assets or operations or raise additional debt or equity capital. We may not be able to effect any of these actions on a timely basis, on commercially reasonable terms or at all, and these actions may not be sufficient to meet our capital requirements. In addition, the terms of our existing or future debt arrangements may restrict us from effecting any of these alternatives. In addition, the Subordinated Notes contain various restrictive covenants that relate to the Company’s tangible net worth, fixed-charge coverage ratios, dividend paying capacity, reinsurance retentions, and risk-based capital ratios. If we are unable to meet debt covenant requirements or to obtain future waivers regarding such failures, we could be in breach of our credit agreement. Any such breach could cause significant disruption to our operations, including a requirement to immediately repay our indebtedness, and would have severe adverse effects on our liquidity and financial flexibility.

We are a holding company that transacts the majority of our business through our Insurance Company Subsidiaries and, as a result, our principal sources of funds are payments from our Insurance Company Subsidiaries,

including intercompany service fees and dividends. Our ability to meet our obligations on our outstanding debt and pay our expenses, depends on continuing to receive sufficient funds from our Insurance Company Subsidiaries. We have met our outstanding cash flow obligations at the holding company level primarily through intercompany service fees we receive as well as direct expense reimbursements. We may also use dividends from our Insurance Company Subsidiaries, however, insurance regulations limit such dividend payments. At this time any dividend payment from our Insurance Company Subsidiaries would need prior regulatory approval. Any significant reduction in the intercompany service fees we receive, and any regulatory or other limitations on the payment of dividends to us from our Insurance Company Subsidiaries, may adversely affect our ability to meet our debt obligations and pay our expenses.

As a holding company which owns insurance companies domiciled in the United States, we and our admitted Insurance Company Subsidiaries are subject to extensive regulation, primarily by Michigan (the domiciliary state for CIC and WPIC) and to a lesser degree, the other jurisdictions in which we operate. Most insurance regulations are designed to protect the interests of insurance policyholders, as opposed to the interests of shareholders. These regulations generally are administered by a department of insurance in each state and relate to, among other things, authorizations to write certain lines of business, capital and surplus requirements, reserve requirements, rate and form approvals, investment and underwriting limitations, affiliate transactions, dividend limitations, cancellation and non-renewal of policies, changes in control, solvency and a variety of other financial and non-financial aspects of our business. These laws and regulations are regularly re-examined and any changes in these laws and regulations or new laws may be more restrictive, could make it more expensive to conduct business or otherwise adversely affect our operations. State insurance departments also conduct periodic examinations of the affairs of insurance companies and require the filing of annual and other reports relating to financial condition, holding company issues and other matters. These regulatory requirements may impose timing and expense or other constraints that could adversely affect our ability to achieve some or all of our business objectives.

In addition, regulatory authorities have broad discretion to deny or revoke licenses for various reasons, including the violation of regulations. In some instances, where there is uncertainty as to applicability, we follow practices based on our interpretations of regulations or practices that we believe are generally followed by the industry. These practices may turn out to be different from the interpretations of regulatory authorities. If we do not have the requisite licenses and approvals or do not comply with applicable regulatory requirements, insurance regulatory authorities could preclude or temporarily suspend us from carrying on some or all of our activities or otherwise penalize us. This could adversely affect our ability to operate our business.

The admitted market is subject to more state regulation than the E&S market, particularly with regard to rate and form filing requirements, restrictions on the ability to exit lines of business, premium tax payments and membership in various state associations, such as guaranty associations. Some states have deregulated their commercial insurance markets. We cannot predict the effect that further deregulation would have on our business, financial condition or results of operations.

The State of Michigan has adopted the NAIC’s calculation to measure the adequacy of statutory capital of U.S.-based insurers, known as RBC. The RBC calculation establishes the minimum amount of capital necessary for a company to support its overall business operations. Insurers falling below a calculated threshold may be subject to varying degrees of regulatory action, including supervision, rehabilitation or liquidation. Failure to maintain adequate RBC at the required levels could adversely affect the ability of our Insurance Company Subsidiaries to maintain regulatory authority to conduct their business.

The State of Michigan has adopted the NAIC’s holding company act and regulations. This act requires, among other things, that:

The State of Michigan also adopted the NAIC’s Risk Management and Own Risk and Solvency Assessment Model Act (the “ORSA Model Act”). The ORSA Model Act requires that an insurance holding company system’s Chief Risk Officer to submit annually to its domiciliary regulator an Own Risk and Solvency Assessment Summary Report (“ORSA”). The ORSA is a confidential internal assessment conducted by that insurer of the material and relevant risks identified by the insurer associated with the insurer’s current business plan and the sufficiency of capital resources to support those risks. The Company is currently exempt from providing an ORSA summary report as it does not meet the minimum premium requirements. We may be required to comply with this requirement in the future if our gross written premium exceeds $500 million annually.

We cannot predict the impact these requirements or any other regulatory requirements may have on our business, financial condition or results of operations.

Our Insurance Company Subsidiaries are subject to minimum capital and surplus requirements imposed under the laws of their respective states of domicile and each state in which they issue policies. As of December 31, 2022, our Insurance Company Subsidiaries were in compliance with all such reserves. Any failure by one of our Insurance Company Subsidiaries to meet minimum capital and surplus requirements will subject it to corrective action. This may include requiring the adoption of a comprehensive financial plan, revocation of its license to sell insurance products or placing the subsidiary under state regulatory control. It may also result in our Insurance Company Subsidiaries being limited in their ability to make a dividend to us and could be a factor in causing rating agencies to downgrade our ratings. Any new minimum capital and surplus requirements adopted in the future may require us to increase the capital and surplus of our Insurance Company Subsidiaries, which we may not be able to do.

Market disruptions like those experienced during the credit-driven financial market collapse in 2008, as well as the dramatic increase in the capital allocated to alternative asset management during recent years, have led to increased governmental as well as self-regulatory scrutiny of the insurance industry in general. In addition, certain legislation proposing greater regulation of the industry is periodically considered by governing bodies of some jurisdictions.

Our business could be adversely affected by changes in state laws, including those relating to asset and reserve valuation requirements, surplus requirements, limitations on investments and dividends, enterprise risk and RBC requirements and, at the federal level, by laws and regulations that may affect certain aspects of the insurance industry, including proposals for preemptive federal regulation. The U.S. federal government generally has not directly regulated the insurance industry except for certain areas of the market, such as insurance for flood, nuclear and terrorism risks. However, the federal government has undertaken initiatives or considered legislation in several areas that may affect the insurance industry, including tort reform and corporate governance. The Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) also established the Federal Insurance Office, which is authorized to study, monitor and report to Congress on the insurance industry and to recommend that the Financial Stability Oversight Council (the “FSOC”) designate an insurer as an entity posing risks to U.S. financial stability in the event of the insurer’s material financial distress or failure. In December 2013, the Federal Insurance Office issued a report on alternatives to modernize and improve the system of insurance regulation in the United States, including increasing national uniformity through either a federal charter or effective action by the states. Any additional regulations established as a result of the Dodd-Frank Act or actions in response to the Federal Insurance Office Report could increase our costs of compliance or lead to disciplinary action. In addition, legislation has been introduced from time to time that, if enacted, could result in the federal government assuming a more direct role in the regulation of the insurance industry, including federal licensing in addition to or in lieu of state licensing and reinsurance for natural catastrophes. We are unable to predict whether any legislation will be enacted or any regulations will be adopted, or the effect any such developments could have on our business, financial condition or results of operations.

It is impossible to predict what, if any, changes in the regulations applicable to us, the markets in which we operate, trade and invest or the counterparties with which we do business may be instituted in the future. Any such regulation could have a material adverse impact on our business.

As industry practices and legal, judicial, social and other environmental conditions change, unexpected and unintended issues related to claims and coverage may emerge. These issues may adversely affect our business by either broadening coverage beyond our underwriting intent or by increasing the number or size of claims. In some instances, these changes may not become apparent until sometime after we have issued insurance contracts that are affected by the changes. As a result, the full extent of liability under our insurance contracts may not be known for many years after a contract is issued.

Participants in the insurance industry use ratings from independent ratings agencies, such as A.M. Best Company, Inc. (“A.M. Best”) and Kroll Bond Rating Agency (“Kroll”) as an important means of assessing the financial strength and quality of insurers. In setting their ratings, A.M. Best and Kroll utilize a quantitative and qualitative analysis of a company’s balance sheet strength, operating performance and business profile. These analyses include comparisons to peers and industry standards as well as assessments of operating plans, philosophy and management. For A.M. Best, the ratings range from A++, or superior, to F for in liquidation. Kroll's ratings range from AAA (extremely strong) to R (under regulatory supervision). As of May 18, 2023, A.M. Best has assigned financial strength ratings of B+ with a stable outlook for CIC and WPIC. A rating of B+ means A.M. Best considers both companies to have a “good” ability to meet ongoing financial obligations. Kroll has given CIC and WPIC an insurance financial strength rating of BBB+ with a stable outlook as of August 1, 2022. A BBB+ rating indicates that the insurer's financial condition is good.

A.M. Best and Kroll assign ratings that are intended to provide an independent opinion of an insurance company’s ability to meet its financial obligations to policyholders and such ratings are not evaluations directed to investors. A.M. Best and Kroll periodically review our ratings and may revise ratings downward or revoke them at their sole discretion based primarily on their analyses of our balance sheet strength (including capital adequacy and loss and loss adjustment expense reserve adequacy), operating performance and business profile. Factors that could affect such analyses include but are not limited to:

In addition, with a heightened level of scrutiny placed on many financial institutions (including insurance companies) in recent years, rating agencies may increase the capital and other requirements to maintain certain ratings levels. These and other factors could result in a downgrade of our rating. A downgrade of our rating could cause our current and future agents, retail brokers and insureds to choose other, more highly-rated competitors. A downgrade of this rating could also increase the cost or reduce the availability of reinsurance to us. A downgrade or withdrawal of any rating could severely limit or prevent us from writing new and renewal insurance contracts and would have a material adverse effect on our financial condition and results of operations.

Our Insurance Company Subsidiaries are subject to assessments in most states where we are licensed for the provision of funds necessary for the settlement of covered claims under certain policies provided by impaired, insolvent or failed insurance companies. These assessments are levied by guaranty associations within the state in

proportion to the premiums written by member insures in the lines of business in which the impaired, insolvent or failed insurer was engaged. Maximum contributions required by law in any one year vary by state, and have historically been less than one percent of annual premiums written. We cannot predict with certainty the amount of future assessments because they depend on factors outside our control, such as insolvencies of other insurance companies. Significant assessments could have a material adverse effect on our financial condition and results of operations.

In addition to our currently outstanding indebtedness and other liabilities and any New Notes issued pursuant to this offering, the New Indenture does not restrict us or our subsidiaries from incurring additional debt or other liabilities, including additional senior debt or secured debt under our secured credit facilities. If we incur additional debt or liabilities, our ability to pay the obligations on the New Notes could be adversely affected.

Our indebtedness, including the indebtedness we or our subsidiaries may incur in the future, could have important consequences for the holders of the New Notes, including:

In addition, we are not restricted under the New Indenture from granting security interests in our assets, except to the extent described under “Description of the New Notes — Merger, Consolidation, Sale, Lease or Conveyance” and “— Certain Covenants” in this Prospectus, or from paying dividends or issuing or repurchasing securities.

Moreover, the New Indenture does not require us to maintain any financial ratios or specific levels of net worth, revenues, income, cash flow or liquidity and, accordingly, does not protect holders of the Notes in the event that we experience material adverse changes in our financial condition or results of operations. Holders of the New Notes are also not protected under the New Indenture in the event of a highly leveraged transaction, reorganization, default under our existing indebtedness, restructuring, merger or similar transaction, except to the extent described under “Description of the New Notes — Merger, Consolidation, Sale, Lease or Conveyance” and “— Certain Covenants” in this Prospectus.

For these reasons, you should not consider the covenants in the New Indenture a significant factor in evaluating whether to invest in the New Notes.

The New Notes are obligations exclusively of Conifer Holdings, Inc. and not of any of our subsidiaries. None of our subsidiaries is a guarantor of the New Notes and the New Notes are not required to be guaranteed by any subsidiary we may acquire or create in the future. Any assets of our subsidiaries will not be directly available to satisfy the claims of our creditors, including holders of the New Notes. Except to the extent we are a creditor with recognized claims against our subsidiaries, all claims of creditors of our subsidiaries will have priority over our equity interests in such subsidiaries (and therefore the claims of our creditors, including holders of the New Notes) with respect to the assets of such subsidiaries. Even if we are recognized as a creditor of one or more of our subsidiaries, our claims would still be effectively subordinated to any security interests in the assets of any such subsidiary and to any indebtedness or other liabilities of any such subsidiary senior to our claims. Consequently, the New Notes will be structurally subordinated to all indebtedness and other liabilities of any of our subsidiaries and any subsidiaries that we may in the future acquire or establish. Our subsidiaries may incur substantial indebtedness in the future, all of which would be structurally senior to the New Notes.

Our ability to make payments on our indebtedness (including the New Notes and the Existing Notes) will depend on our ability to generate cash in the future. To a certain extent, this is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. If we are unable to generate sufficient cash flow to service our debt and meet our other commitments, we may need to restructure or refinance all or a portion of our debt, sell material assets or operations or raise additional debt or equity capital. We may not be able to effect any of these actions on a timely basis, on commercially reasonable terms or at all, and these actions may not be sufficient to meet our capital requirements. In addition, the terms of our existing or future debt arrangements may restrict us from effecting any of these alternatives.

Conifer may be able to incur substantial indebtedness in the future and such debt may be secured debt or debt of its subsidiaries. The terms of the New Indenture will not prohibit Conifer or its subsidiaries from incurring unsecured debt and the limitation on incurring secured debt is subject to important limitations, qualifications and exceptions. If Conifer incurs any secured debt (including additional senior debt or secured debt under our secured credit facilities ) or any of its subsidiaries incur any debt, all such debt will be effectively senior to the New Notes either to the extent of the value of the collateral securing such debt or structurally, and if Conifer incurs any additional indebtedness that ranks equally with the New Notes, the holders of that debt will be entitled to share ratably with the holders of the New Notes in any proceeds distributed in connection with any insolvency, liquidation, reorganization, dissolution or other winding up of Conifer. If new debt is added to Conifer’s current debt levels, or Conifer’s subsidiaries incur additional debt, the related risks Conifer faces will increase.

The New Notes are a new issue of securities with no established trading market. We have applied for listing of the New Notes on the Nasdaq Global Market, but no assurance can be given as to the approval of the New Notes for listing or, if listed, the continued listing for the term of the New Notes, or the liquidity or trading market for the New Notes. There can be no assurance that a secondary market for the New Notes will develop. We are not required to maintain a listing on the Nasdaq Global Market or any other exchange. Even if the listing of the New Notes on the Nasdaq Global Market is approved, we cannot assure you that a market will develop, or continue, or that you will be able to sell your New Notes easily.

The liquidity of any market for the New Notes will depend upon various factors, including:

Accordingly, we cannot assure you that an active trading market will develop, or continue, for the New Notes. If the New Notes are traded after their initial issuance, they may trade at a discount from their initial offering price, depending upon prevailing interest rates and other factors, including those listed herein.

The stock market in recent years has experienced significant price and volume fluctuations that have often been unrelated to the operating performance of companies. In addition, the market price of our common stock historically has been volatile. The market price of our common stock could fluctuate significantly for many reasons, including in response to the risks described in this section or in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, or our subsequently filed quarterly reports on Form 10-Q or elsewhere in this Prospectus for reasons unrelated to our operations, such as reports by industry analysts, investor perceptions or negative announcements by our customers, competitors or suppliers regarding their own performance, as well as industry

conditions and general financial, economic and political instability. A decrease in the market price of our common stock would likely adversely impact the trading price of the New Notes. The market price of our common stock could also be affected by possible sales of our common stock by investors who view the New Notes as a more attractive means of equity participation in us and by hedging or arbitrage trading activity that may develop involving our common stock. This trading activity could, in turn, affect the trading price of the New Notes. This volatility in the market price of our common stock may affect the price at which you could sell the shares of our common stock you receive upon conversion of your New Notes, if any, and the sale of substantial amounts of our common stock could adversely affect the price of our common stock and the value of your New Notes.

Any default under the agreements governing our indebtedness, including Existing Notes that are not exchanged for New Notes in the Exchange Offer and including other indebtedness to which we may be a party that is not waived by the required lenders, and the remedies sought by the holders of such indebtedness could make us unable to pay principal, premium, if any, and interest on the New Notes and substantially decrease the market value of the New Notes. If we are unable to generate sufficient cash flow and are otherwise unable to obtain funds necessary to meet required payments of principal, premium, if any, and interest on our indebtedness, or if we otherwise fail to comply with the various covenants, including financial and operating covenants, in the instruments governing our indebtedness, we could be in default under the terms of the agreements governing such indebtedness. In the event of such default, the holders of such indebtedness could elect to declare all the funds borrowed thereunder to be due and payable, together with accrued and unpaid interest, the lenders under any other debt we may incur in the future could elect to terminate their commitments, cease making further loans and institute foreclosure proceedings against our assets, and we could be forced into bankruptcy or liquidation. If our operating performance declines, we may in the future need to seek to obtain waivers from the required lenders under other debt that we may incur in the future to avoid being in default. If we breach our covenants under other debt and seek a waiver, we may not be able to obtain a waiver from the required lenders. If this occurs, we would be in default under other debt, the lenders could exercise their rights as described above, and we could be forced into bankruptcy or liquidation. If we are unable to repay debt, lenders having secured obligations could proceed against the collateral securing the debt. See “Description of the New Notes” in this Prospectus.

We believe that the value of the New Notes in any secondary market will be affected by the supply and demand of the New Notes, the interest rate, their ranking and a number of other factors. The following factors, among others, may have an impact on the market value of the New Notes:

Some of these factors are interrelated in complex ways. As a result, the effect of any one factor, such as an increase in United States interest rates, may be offset or magnified by the effect of one or more other factors.

We may redeem all or a portion of the New Notes as described under “Description of the New Notes — Optional Redemption.” If redemption does occur, holders of the redeemed New Notes may be unable to reinvest the money received in the redemption at a rate that is equal to or higher than the rate of return on the New Notes.

To the extent any Existing Notes are tendered and accepted in the Exchange Offer, the trading market, if any, for the Existing Notes that remain outstanding after the Exchange Offer would be adversely affected because the market will be less liquid. In the event the Exchange Offer is accepted, the Existing Notes that remain outstanding after the Exchange Offer may be delisted from the Nasdaq Global Market and the trading market for the remaining Existing Notes will be significantly less liquid.

At maturity, the entire outstanding principal amount of the New Notes will become due and payable. We may not have sufficient funds or may be unable to arrange for additional financing to pay the repurchase price of the New Notes or the principal amount due at maturity. Any future borrowing arrangements or debt agreements to which we become a party may contain restrictions on or prohibitions against our redemption or repurchase of the new notes. If we are prohibited from redeeming or repurchasing the New Notes, we could try to obtain the consent of lenders under those arrangements, or we could attempt to refinance the borrowings that contain the restrictions. If we do not obtain the necessary consents or refinance the borrowings, we will be unable to repurchase the new notes. Such a failure would constitute an event of default under the New Indenture which could, in turn, constitute a default under the terms of our other indebtedness.

Our management will have significant discretion in the allocation of the majority of the net proceeds we will receive from the New Offering. You will not have the opportunity, as part of your investment decision, to assess whether proceeds are being used appropriately. You must rely on the judgments of our management regarding the application of these net proceeds. These net proceeds may be used for corporate purposes that do not improve our profitability or increase the price of our common stock. The net proceeds from the New Offering may be placed in investments that do not produce income or that lose value.

The trading price of our common stock may be highly volatile and could be subject to wide fluctuations in response to various factors, some of which are beyond our control and may not be related to our operating performance. These fluctuations could be significant and could cause a loss in the amount invested in our shares of common stock.

In addition, the stock market in general, and the market for insurance companies in particular, has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of those companies. At times, securities class action litigation has been instituted against companies following periods of volatility in the overall market and in the market price of a company’s securities. This litigation, if instituted against us, could result in substantial costs, divert our management’s attention and resources, and harm our business, operating results, and financial condition.

As a result of these factors, investors in our common stock may not be able to resell their shares at or above their purchase price or may not be able to resell them at all. These market and industry factors may materially reduce the market price of our common stock, regardless of our operating performance. In addition, price volatility may be greater if the public float and the trading volume of our common stock remain low.

Our future capital requirements depend on many factors, including our ability to grow premium volume and underwrite the business profitably. The Existing Notes mature on September 30, 2023, and to the extent that our existing capital is insufficient, we may need to raise additional capital in the future through offerings of debt or equity securities or otherwise to:

Any equity or debt financing, if available at all, may be on terms that are unfavorable to us. Additional capital raised through the issuance of debt may result in creditors having rights, preferences and privileges senior or otherwise superior to those of the holders of our shares and may limit our flexibility in operating our business and make it more difficult to obtain capital in the future. Disruptions, uncertainty, or volatility in the capital and credit markets may also limit our access to capital required to operate our business. If we are not able to obtain adequate capital, our business, financial condition and results of operations could be materially adversely affected.

As of May 16, 2023, our executive officers, directors, 5% shareholders and their affiliates owned approximately 71.7% of our voting stock. Therefore, these shareholders have the ability to influence us through their ownership position. These shareholders may be able to significantly influence all matters requiring shareholder approval. For example, these shareholders may be able to significantly influence elections of directors, amendments of our organizational documents, or approval of any merger, sale of assets, or other major corporate transaction. This may prevent or discourage unsolicited acquisition proposals or offers for our common stock that you may feel are in your best interest as one of our shareholders.

As a public company, we incur significant legal, accounting and other expenses that we did not incur as a private company. In addition, we are subject to the reporting requirements of the Exchange Act, which require, among other things, that we file with the SEC, annual, quarterly and current reports with respect to our business and financial condition. We are also subject to other reporting and corporate governance requirements, including certain requirements of Nasdaq and provisions of the Sarbanes-Oxley Act and the regulations promulgated thereunder, which imposes significant compliance obligations upon us.

The Sarbanes-Oxley Act and the Dodd-Frank Act, as well as rules subsequently implemented by the SEC and Nasdaq, have increased regulation of, and imposed enhanced disclosure and corporate governance requirements on, public companies. Our efforts to comply with these laws, regulations and standards have increased our operating costs and may divert management’s time and attention from revenue-generating activities.

Other expenses associated with being a public company include increases in auditing, accounting and legal fees and expenses, investor relations expenses, increased directors’ fees and director and officer liability insurance costs, registrar and transfer agent fees and listing fees, as well as other expenses.

Our amended and restated articles of incorporation and bylaws contain provisions that may make the acquisition of our Company more difficult without the approval of our board of directors (our “Board”). These include provisions that, among other things:

These provisions may frustrate or prevent any attempts by our shareholders to replace or remove our current management by making it more difficult for shareholders to replace members of the Board, which is responsible for appointing members of our management.

In addition, our 2015 Omnibus Incentive Plan permits the Board or a committee thereof to accelerate, vest or cause the restrictions to lapse with respect to outstanding equity awards, in the event of, or immediately prior to, a change in control. Such vesting or acceleration could discourage the acquisition of our Company.

We could also become subject to certain anti-takeover provisions under Michigan law which may discourage, delay or prevent someone from acquiring us or merging with us, whether or not an acquisition or merger is desired by or beneficial to our shareholders. If a corporation’s board of directors chooses to “opt in” to certain provisions of Michigan Law, such corporation may not, in general, engage in a business combination with any beneficial owner, directly or indirectly, of 10% of the corporation’s outstanding voting shares unless the holder has held the shares for five years or more or, among other things, the board of directors has approved the business combination. Our Board has not elected to be subject to this provision, but could do so in the future. Any provision of our amended and restated articles of incorporation or bylaws or Michigan law that has the effect of delaying or deterring a change in control could limit the opportunity for our shareholders to receive a premium for their shares, and could also affect the price that some investors are willing to pay for our common stock otherwise.

We are a holding company that transacts the majority of our business through our Insurance Company Subsidiaries and, as a result, our principal sources of funds are payments from our Insurance Company Subsidiaries, including intercompany service fees and dividends. Our ability to meet our obligations on our outstanding debt obligations, including making principal and interest payments on the New Notes or Existing Notes, depends on continuing to receive sufficient funds from our Insurance Company Subsidiaries. We have met our outstanding debt obligations primarily through intercompany service fees we receive. We may also use dividends from our Insurance Company Subsidiaries, however, insurance regulations limit such dividend payments. Dividend payments may be further constrained by rating agency capital requirements or other business considerations. As a result, our ability to use dividends as a source of funds to meet our debt obligations may be significantly limited. Any significant reduction in the intercompany service fees we receive, and any regulatory and other limitations on the payment of dividends to us by our Insurance Company Subsidiaries, may adversely affect our ability to pay interest on the New Notes or Existing Notes as it comes due and the principal of the New Notes or Existing Notes at their maturity.

We will issue New Notes in exchange for Existing Notes only if you properly tender the Existing Notes before expiration of the Exchange Offer. Neither we nor the exchange agent, the information agent, or the dealer managers are required to tell you of any defects or irregularities with respect to your tender of Existing Notes. If you are the beneficial holder of Existing Notes that are held through your broker, dealer, commercial bank, trust company or other nominee, and you wish to tender such Existing Notes in the Exchange Offer, you should promptly contact the person through whom your Existing Notes are held and instruct that person to tender on your behalf in accordance with the procedures described in this Prospectus.

The placement agents have agreed to use their reasonable best efforts to solicit offers to purchase the New Notes in the New Offering. The placement agents have no obligation to buy any of the securities from us or to arrange for the purchase or sale of any specific number or dollar amount of the New Notes. There is no required minimum principal amount of New Notes that must be sold as a condition to completion of the New Offering. Because there is no minimum offering amount required as a condition to the closing of the New Offering, the actual offering amount, placement agent fees and proceeds to us are not presently determinable and may be substantially less than the maximum amounts set forth herein. We may sell fewer than all of the New Notes offered hereby, which may significantly reduce the amount of proceeds received by us, and investors in this offering will not receive a refund in the event that we do not sell an amount of securities sufficient to support our continued operations. As a result, we may not raise the amount of capital we believe is required for our current and planned operations and may need to raise additional funds. Such additional funds may not be available on terms acceptable to us or at all.

We will not receive any cash proceeds from the exchange of the Existing Notes for the New Notes pursuant to the Exchange Offer. We intend to cancel all Existing Notes received in exchange for New Notes in the Exchange Offer. We are offering up to $25,000,000 aggregate principal amount of New Notes for cash. If the Exchange Offer is not fully subscribed, we intend to use any proceeds from the New Offering to redeem all or a portion of the Existing Notes. Any remaining net proceeds from this offering will be used to pay other debt obligations, and for general corporate purposes. The New Offering is being offered to the public on a best efforts basis and, as a result, we are not guaranteed any minimum level of proceeds and completion of the New Offering is not conditioned on receipt of any minimum level of proceeds. There is no arrangement to place the proceeds from the New Offering in an escrow, trust or similar account, pending closing of the New Offering. Pending such use, we intend to invest the net proceeds in short-term, investment-grade, interest-bearing securities.

The following table sets forth capitalization as of March 31, 2023:

If all outstanding Existing Notes are validly tendered and accepted in the Exchange Offer, the Company does not intend to issue all potential $25 million of New Notes in the New Offering, and may in its sole discretion issue a lower amount of New Notes even if indications of interest for all $25 million are received. We have no plans to materially increase our indebtedness as a result of these offerings. However, to the extent that the Exchange Offer is not fully subscribed, the Company intends to use any proceeds from the New Offering to redeem all or a portion of the Existing Notes, to pay other debt obligations, and for general corporate purposes. The information set forth in the following table should be read in conjunction with and is qualified in its entirety by the Company’s consolidated financial statements and notes thereto included in this Prospectus.

Existing Notes. We are offering to exchange your Existing Notes for New Notes as follows: $25 principal amount of new notes for each $25 principal amount of Existing Notes for up to 100% of the aggregate outstanding principal amount of Existing Notes. The New Notes will be issued in minimum denominations of $25 and any integral multiple of $25 in excess thereof or in units, each representing $25. Based on the principal amount of Existing Notes outstanding as of the date of this Prospectus, we are offering to acquire up to $25 million aggregate principal amount of Existing Notes that are validly tendered on the terms and subject to the conditions set forth in this Prospectus.

You may tender all, some or none of your Existing Notes, subject to the terms and conditions of the Exchange Offer. Holders of Existing Notes must tender their Existing Notes in a minimum $25 principal amount and multiples thereof.

The Exchange Offer is not being made to, and we will not accept tenders for exchange from, holders of Existing Notes in any jurisdiction in which the Exchange Offer or the acceptance of such offers would not be in compliance with the securities or blue sky laws of that jurisdiction.

Our board of directors has approved the Exchange Offer. However, neither we nor any of our management, our board of directors, or the information agent, the exchange agent, or the dealer managers for the Exchange Offer is making any recommendation as to whether holders of Existing Notes should tender all or part of their Existing Notes in exchange for New Notes in the Exchange Offer. In addition, we have not authorized anyone to make any recommendation. You must make your own decision whether to tender your Existing Notes in connection with the Exchange Offer and, if so, the amount of Existing Notes to tender.

The expiration date for the Exchange Offer is 5:00 p.m., New York City time, on  , 2023. We may extend this expiration date for any reason. The last date on which tenders will be accepted, whether on  , 2023 or any later date to which the Exchange Offer may be extended, is referred to herein as the “expiration date”.

We expressly reserve the right, in our discretion, for any reason to:

If we consider an amendment to the Exchange Offer to be material, or if we waive a material condition of the Exchange Offer, we will promptly disclose the amendment or waiver in a prospectus supplement, and if required by law, we will extend the Exchange Offer for a period required by applicable law.

We will promptly give oral or written notice of any (1) extension, (2) amendment, (3) non-acceptance or (4) termination of the offers to the holders of the Existing Notes. In the case of any extension, we will issue a press release or other public announcement no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration date. In the case of an amendment, we will issue a press release or other public announcement.

Your tender to us of Existing Notes and our acceptance of your tender will constitute a binding agreement between you and us upon the terms and subject to the conditions set forth in this Prospectus. For the procedures regarding the New Offering, see “The New Offering.”

Tender of Existing Notes Held Through a Custodian. If you are a beneficial holder of the Existing Notes that are held of record by a custodian bank, depository institution, broker, dealer, trust company or other nominee, you must instruct the custodian, or such other record holder, to tender the Existing Notes on your behalf. Your custodian will provide you with its instruction letter, which you must use to give these instructions.

Tender of Existing Notes Held Through DTC. Any beneficial owner of Existing Notes held of record by The Depository Trust Company, or DTC, or its nominee, through authority granted by DTC, may direct the DTC participant through which the beneficial owner’s Existing Notes are held in DTC, to tender on such beneficial owner’s behalf. To effectively tender Existing Notes that are held through DTC, DTC participants should transmit their acceptance through the Automated Tender Offer Program, or ATOP, for which the transaction will be eligible, and DTC will then edit and verify the acceptance and send an agent’s message to the exchange agent for its acceptance. Delivery of tendered Existing Notes must be made to the exchange agent pursuant to the book-entry delivery procedures set forth below or the tendering DTC participant must comply with the guaranteed delivery procedures set forth below. No letters of transmittal will be required to tender Existing Notes through ATOP.

We will determine in our sole discretion, all questions as to the validity, form, eligibility and acceptance of Existing Notes tendered for exchange. Our determination will be final and binding. We reserve the absolute right to reject any and all tenders of any particular existing notes not properly tendered or to not accept any particular existing notes which acceptance might, in our reasonable judgment or our counsel’s judgment, be unlawful. We also reserve the absolute right to waive any defects or irregularities in the tender of Existing Notes. Unless waived, any defects or irregularities in connection with tenders of Existing Notes for exchange must be cured within such reasonable period of time as we shall determine. Neither we, the exchange agent nor any other person shall be under any duty to give notification of any defect or irregularity with respect to any tender of existing notes for exchange, nor shall any of them incur any liability for failure to give such notification.

Once all of the conditions to the Exchange Offer are satisfied or waived, we will accept, promptly after the expiration date, all Existing Notes properly tendered, and will issue the New Notes promptly after acceptance of the Existing Notes. The discussion under the heading “—Conditions for Completion of the Exchange Offer” provides further information regarding the conditions to the Exchange Offer. For purposes of the Exchange Offer, we shall be deemed to have accepted properly tendered Existing Notes for exchange when, as and if we have given oral or written notice to the exchange agent, with written confirmation of any oral notice to be given promptly after giving such notice.

The New Notes will be issued in minimum denominations of $25 and any integral multiples of $25 in excess thereof or in units, each representing $25. Any fractional New Notes will be settled in cash. The New Notes will bear interest from the date of issuance of the New Notes. Existing Notes accepted for exchange will accrue interest up to but excluding the closing date of the Exchange Offer.

In all cases, issuance of New Notes for Existing Notes that are accepted for exchange in the Exchange Offer will be made only after timely receipt by the exchange agent of:

If we do not accept any tendered Existing Notes for any reason set forth in the terms and conditions of the Exchange Offer, the unaccepted or non-exchanged Existing Notes will be returned to you. Existing Notes tendered by book-entry

transfer into the exchange agent’s account at the book-entry transfer facility will be returned in accordance with the book-entry procedures described above, and the Existing Notes that are not to be exchanged will be credited to an account maintained with DTC, as promptly as practicable after the expiration or termination of the Exchange Offer.

You may withdraw your tender of Existing Notes at any time prior to 5:00 p.m., New York City time, on the expiration date. In addition, if we have not accepted your tendered existing notes for exchange, you may withdraw your existing notes after  , 2023.

For a withdrawal to be effective, the exchange agent must receive a written notice of withdrawal at the address or, in the case of eligible institutions, at the facsimile number, set forth below under the heading “—Exchange Agent” prior to 5:00 p.m., New York City time, on the expiration date. Any notice of withdrawal must:

Any Existing Notes that have been tendered for exchange, but which are not exchanged for any reason, will be returned to you or credited to an account maintained with the book-entry transfer facility for the Existing Notes, as soon as practicable after withdrawal, rejection of tender or termination of the Exchange Offer. Properly withdrawn Existing Notes may be retendered by following the procedures described under the heading “—Procedures for Tendering Existing Notes” above, at any time on or prior to 5:00 p.m., New York City time, on the expiration date.

Notwithstanding any other provisions of the Exchange Offer, we will not be required to, and shall not, accept for exchange Existing Notes validly tendered pursuant to the Exchange Offer, and may terminate, amend or extend the Exchange Offer, subject in each case to the terms of this Prospectus, or delay or refrain from accepting, or exchanging, such Existing Notes or issuing New Notes in exchange for validly tendered and accepted Existing Notes, if at any time prior to the consummation of the Exchange Offer we determine (in each case, subject to applicable law), that any of the following conditions shall not have been satisfied or waived by us:

In addition, we will not accept for exchange any Existing Notes tendered, and no New Notes will be issued in exchange for those Existing Notes, if at any time any stop order is threatened or issued by the SEC with respect to the registration statement for the Exchange Offer and the issuance of the New Notes or the qualification of the New Indenture under the Trust Indenture Act of 1939. In any such event, we must use our commercially reasonable efforts to obtain the withdrawal of any stop order as soon as practicable.

These conditions are solely for our benefit and may be asserted by us or may be waived by us at any time and from time to time, subject to applicable law, the terms set forth in this Prospectus and the terms of our agreement with the dealer managers and the placement agents. Further, subject to applicable law and the terms set forth in this Prospectus, we reserve the right to waive any and all conditions to the Exchange Offer, in whole or in part.

We have not made a decision as to what circumstances would lead us to waive any such condition, and any such waiver would depend on circumstances prevailing at the time of such waiver. Although we have no present plans or arrangements to do so, we reserve the right to amend, at any time, the terms of the Exchange Offer, subject to the terms of this Prospectus, applicable law and the terms of our agreement with the dealer managers and the placement agents.

Janney Montgomery Scott LLC and American Capital Partners, LLC are acting as dealer managers in connection with the Exchange Offer. The dealer managers will receive a fee in connection with their services as dealer managers. $250,000 will be payable regardless of how many Existing Notes are tendered, and an additional fee will be based on the principal amount of the Existing Notes tendered and will be paid in cash. The dealer managers’ fees in connection with the Exchange Offer will be paid when the Exchange Offer is completed.

Additionally, if the Exchange Offer is consummated, we have agreed to pay a soliciting broker fee equal to $0.50 for each $25 in principal amount of Existing Notes validly tendered and accepted for exchange pursuant to the Exchange Offer to soliciting brokers that are appropriately designated by their clients to receive this fee. See “—Soliciting Broker Fee” below.

The dealer managers will also be reimbursed for their reasonable out-of-pocket expenses, subject to a specified limit, incurred in connection with the Exchange Offer (including reasonable fees and disbursements of counsel).

Wilmington Trust, National Association has been appointed as the exchange agent for the Exchange Offer Wilmington Trust, National Association, also acts as trustee under the indenture governing the Existing Notes and the New Notes. Questions about the tender of Existing Notes and requests for assistance may be directed to the exchange agent addressed as follows:

If you need additional copies of this Prospectus, please contact the information agent at the address or telephone number set forth on the back cover of this Prospectus.

We have retained Janney Montgomery Scott LLC and American Capital Partners, LLC to act as dealer managers in connection with the Exchange Offer and will pay the dealer managers a customary fee as compensation for their services. The obligations of the dealer managers to perform this function are subject to certain conditions. We have agreed to indemnify the dealer managers against certain liabilities, including liabilities under the federal securities laws. Questions about the terms of the Exchange Offer may be directed to the dealer managers at their contact information set forth on the back cover page of this Prospectus.

The dealer managers and their affiliates are full service financial institutions engaged in various activities, which may include sales and trading, commercial and investment banking, advisory, investment management, investment research, principal investment, hedging, market making, brokerage and other financial and non-financial activities and services. The dealer managers and their affiliates have provided, and may in the future provide, a variety of these services to us and to persons and entities with relationships with us, for which they have received or will receive customary fees and expenses.

In the ordinary course of their various business activities, the dealer managers and their affiliates, officers, directors and employees may purchase, sell or hold a broad array of investments and actively traded securities, derivatives, loans, commodities, currencies, credit default swaps and other financial instruments for their own account and for the accounts of their customers, and such investment and trading activities may involve or relate to assets, securities and/or instruments of us (directly, as collateral securing other obligations or otherwise) and/or persons and entities with relationships with us. The dealer managers and their affiliates may also communicate independent investment recommendations, market color or trading ideas and/or publish or express independent research views in respect of such assets, securities or instruments and may at any time hold, or recommend to clients that they should acquire, long and/or short positions in such assets, securities and instruments.

In the ordinary course of their business, the dealer managers or their affiliates may at any time hold long or short positions, and may trade for their own accounts or the accounts of customers, in securities of the Company, and, to the extent that the dealer managers or their affiliates own Existing Notes during the Exchange Offer, they may tender such Existing Notes pursuant to the terms of the Exchange Offer.

If the Exchange Offer is consummated, we have agreed to pay a soliciting broker fee equal to $0.50 for each $25 in principal amount of Existing Notes validly tendered by and accepted for exchange pursuant to the Exchange Offer to soliciting brokers that are appropriately designated by their clients to receive this fee. No soliciting broker fees will be paid if the Exchange Offer is not consummated for any reason. If the Exchange Offer is consummated, we will pay soliciting broker fees to eligible brokers upon the request of those brokers who present such supporting documentation as we may reasonably request, including a soliciting broker form, a copy of which may be obtained from the Exchange Agent. We retain sole and absolute discretion to determine whether a broker has satisfied the criteria for being eligible to receive a soliciting broker fee.

A soliciting broker is a broker or dealer in securities which is a member of any national securities exchange or of the Financial Industry Regulatory Authority, or a bank or trust company. Each soliciting broker will confirm that each client it solicits has received a copy of this Prospectus, or concurrently with such solicitation provides its client with a copy of this Prospectus. No soliciting broker is required to make any recommendation to its client holding the Existing Notes as to whether to tender any of its Existing Notes or refrain from tendering its Existing Notes in the Exchange Offer. No assumption is made, in making payments to any soliciting broker, that its activities in connection with the Exchange Offer included any activities other than those described in this paragraph. For all purposes noted in materials relating to the Exchange Offer, the term “solicit” shall be deemed to mean no more than “processing tenders” or “forwarding to customers material regarding the Exchange Offer.”

Soliciting brokers are not eligible to receive a soliciting broker fee with respect to Existing Notes beneficially owned by such soliciting broker or with respect to any Existing Notes that are registered in the name of a soliciting broker unless such Existing Notes are held by such soliciting broker as nominee and such Existing Notes are tendered on behalf of the beneficial owner of such Existing Notes.

Soliciting brokers should take care to ensure that proper records are kept to document their eligibility to receive any soliciting broker fee. We reserve the right to require additional information in our discretion in connection with any request for a soliciting broker fee.

We have retained Alliance Advisors, LLC to act as information agent in connection with the Exchange Offer. The information agent may contact holders of Existing Notes by mail, telephone, facsimile transmission and personal interviews and may request brokers, dealers and other nominee Existing Note holders to forward materials relating to the Exchange Offer to beneficial owners. The information agent will receive an aggregate of approximately $13,000, in compensation for its services, will be reimbursed for reasonable out-of-pocket expenses and will be indemnified against liabilities in connection with its services. The fees the information agent receives will not be based on the principal amount of Existing Notes tendered under the Exchange Offer.

We are offering up to $25 million aggregate principal amount of New Notes for cash in the New Offering. The New Offering is being offered to the public on a best efforts basis and, as a result, we are not guaranteed any minimum level of proceeds. The placement agents are not required to buy or sell any specific number or dollar amount of the New Notes offered in the New Offering, but will use their reasonable best efforts to solicit offers to purchase the New Notes. Closing of the New Offering is not conditioned on receipt of any minimum level of proceeds. There is no arrangement to place the proceeds from the New Offering in an escrow, trust or similar account.

Neither we nor Janney Montgomery Scott LLC or American Capital Partners, LLC, the placement agents, will consider whether or not you are a holder of the Existing Notes or participate in the Exchange Offer as a relevant factor when determining the allocation of the New Notes in the New Offering. The New Notes that we are offering in the New Offering are identical in all respects to the New Notes provided in the Exchange Offer as described in this document under the heading “Description of New Notes.”

Indications of interest in purchasing new notes must be in minimum denominations of principal amount of $25 and any integral multiple of $25 in excess thereof or in units, each representing $25.

You may indicate your interest for New Notes in the New Offering by giving your indication of interest to Janney Montgomery Scott LLC at prospectus@janney.com.

The New Notes will be general unsecured senior obligations of Conifer, and will be issued in an initial aggregate principal amount of $  and will mature on   2028 (referred to herein as the “maturity date”), unless redeemed earlier as described below. The New Notes will be issued only in fully registered book-entry form without coupons and in minimum denominations of $25 and integral multiples of $25 in excess thereof or in units, each representing $25. The New Notes will be issued pursuant to the Indenture, dated as of September 24, 2018, as amended and supplemented by a supplemental indenture (as supplemented, the “New Indenture”), to be entered into between Conifer and Wilmington Trust, National Association, as trustee (the “New Notes Trustee”), and will not be guaranteed by any of Conifer’s subsidiaries.

We may, without the consent of any of the holders of the New Notes, create and issue additional senior unsecured debt securities so that those additional senior unsecured debt securities would form a single series with the New Notes (referred to herein as “same-series debt securities”) or that would form a new series of senior unsecured debt securities. Such same-series debt securities would have the same terms as the New Notes in all respects, except for the issue date, the issue price and the initial interest payment date. The New Notes offered by this Prospectus and any same-series debt securities would rank equally and ratably and would be treated as a single series of senior unsecured debt securities for all purposes under the New Indenture.

The New Notes will bear interest at the rate of 9.75% per year, accruing from  , 2023. Interest on the New Notes will be payable quarterly in arrears on   of each year (each referred to herein as an “interest payment date”), commencing  , to the persons in whose names the New Notes are registered at the close of business on the preceding  , respectively. Interest on the New Notes will be computed on the basis of a 360-day year of twelve 30-day months.

If any interest payment date, redemption date or the maturity date of the New Notes is not a business day, then payment of the principal and interest may be made on the next business day. In that case, no interest will accrue on the amount payable for the period from and after the applicable interest payment date, redemption date or maturity date, as the case may be.

The registered holder of a New Note will be treated as the owner of the New Note for all purposes. Only registered holders have rights under the New Indenture. Payment of the principal of, and interest on, the New Notes represented by a global note registered in the name of or held by DTC or its nominee will be made in immediately available funds to DTC or its nominee, as the case may be, as the registered owner and holder of such global note. See “Book-Entry, Delivery and Form of Notes” below for more information.

The New Indenture contains no covenants or restrictions restricting the incurrence of debt by the Company or its subsidiaries except to the extent describe under the heading “— Certain Covenants” below. The New Indenture contains no financial covenants and does not restrict Conifer from paying dividends or issuing or repurchasing other securities, and does not contain any provision that would provide protection to the holders of the New Notes against a sudden and dramatic decline in credit quality resulting from a merger, takeover, recapitalization or similar restructuring or any other event involving the Company or its subsidiaries that may adversely affect our credit quality, except to the extent described under the headings “— Merger, Consolidation, Sale, Lease or Conveyance” and “— Certain Covenants” below.

The New Notes will not be subject to, or entitled to the benefits of, a sinking fund or repurchase by Conifer at the option of the holders. In addition, the New Notes will not be convertible into, or exchangeable for, any other securities. We may from time to time purchase the New Notes in the open market or otherwise.

Interest on the New Notes will accrue at the rate of 9.75% per annum, accruing from  , 2023. Interest on the New Notes will be payable quarterly in arrears on   of each year, commencing  , 2023, to the persons in whose names the New Notes are registered at the close of business on the preceding  , respectively. Interest on the New Notes will be computed on the basis of a 360-day year of twelve 30-day months.

If an interest payment date, redemption date or the maturity date falls on a day that is not a business day, the related payment of interest and principal will be made on the next day that is a business day, and no interest on the New Notes or such payment will accrue for the period from and after such interest payment date, redemption date

or maturity date, as the case may be, to the date payment is made. A “business day” means any day other than a Saturday, a Sunday or a day on which is a federal holiday or any day on which banking institutions or trust companies in any place for payment are authorized or obligated by law, regulation or executive order to remain closed.

The New Notes will be payable as to principal and interest at the office or agency of the paying agent (which may be Conifer) or, at our option, payment of interest may be made by check mailed to the holders of the New Notes at their addresses set forth in the register of holders; provided, however, that with respect to all payments of principal and interest with respect to a Note owned by a person who owns at least $5,000,000 aggregate principal amount of Notes, the Company will provide at least 10 business days prior written notice of any payment by wire transfer to such Person.

Beginning on   , 2025 and prior to the maturity date, we may, at our option, redeem the New Notes in whole at any time or in part from time to time, on not less than 30 days and not more than 60 days prior notice delivered to the holders of the New Notes. The New Notes will be redeemable at a redemption price equal to 100% of the principal amount of the New Notes to be redeemed plus accrued and unpaid interest to, but not including, the date of redemption.

On and after any redemption date, interest will cease to accrue on the New Notes called for redemption. On or prior to 11:00 a.m. New York City time on any redemption date, we are required to deposit with the paying agent money sufficient to pay the redemption price of and accrued interest on the New Notes to be redeemed on such date.

If less than all of the New Notes are to be redeemed at any time, the New Notes will be redeemed according to DTC’s applicable procedures or, in the case of definitive notes, by lot, pro rata or by such other method as the New Notes Trustee will deem fair and appropriate. New Notes and portions of New Notes selected shall be in minimum amounts of $25 or whole multiples of $25 in excess thereof or in units, each representing $25, except that, if all of the New Notes of a holder are to be redeemed, the entire outstanding amount of New Notes held by such holder, shall be redeemed.

Notice of redemption will be given to each holder of New Notes to be redeemed at least 30 days and not more than 60 days before the applicable redemption date.

If any New Note is to be redeemed in part only, the notice of redemption that relates to that New Note will state the portion of the principal amount of that New Note that is to be redeemed. A New Note in principal amount equal to the unredeemed portion of the original New Note will be issued in the name of the holder of any New Note being redeemed in part upon surrender for cancellation of the original New Note. New Notes called for redemption become due and payable on the date fixed for redemption.

An “event of default,” when used in the New Indenture, means any of the following:

If an event of default occurs and continues, the New Notes Trustee by notice to Conifer, or the holders of at least 25% in aggregate principal amount of the outstanding New Notes by notice to Conifer (with a copy to the New Notes Trustee), may declare the entire principal of and all accrued but unpaid interest on all the New Notes to be due and payable immediately. Subject to certain conditions, but before a judgment or decree for payment of the money due has been obtained, such declaration and its consequences may be rescinded and annulled by the holders of a majority in principal amount of the outstanding New Notes. The New Indenture also provides that the holders of a majority in principal amount of the New Notes may waive any existing default with respect to the New Notes and its consequences, except a default in the payment of the principal of and interest on the New Notes.

The holders of a majority in principal amount of the New Notes may direct the time, method and place of conducting any proceeding for exercising any remedy available to the New Notes Trustee or exercising any trust or power conferred on the New Notes Trustee. However, the New Notes Trustee may decline to follow any such direction if the New Notes Trustee determines upon advice of counsel that the action or proceeding so directed may not lawfully be taken or if the New Notes Trustee in good faith determines that the action or proceeding so directed would involve the New Notes Trustee in personal liability or if the New Notes Trustee in good faith determines that the actions or forbearances specified in or pursuant to such direction would be unduly prejudicial to the interests of holders of the New Notes not joining in the giving of such directions. In addition, the New Notes Trustee may take any other action deemed proper by the New Notes Trustee not inconsistent with such direction received from the holders of the New Notes. The New Notes Trustee shall not be obligated to take any action at the direction of holders unless such holders have offered (and if requested, provided) to the New Notes Trustee security or indemnity satisfactory to the New Notes Trustee.

In case an event of default occurs and is continuing, the New Notes Trustee will be under no obligation to exercise any of the rights or powers under the New Indenture at the request or direction of any holders of New Notes

unless such holders have offered (and if requested, provided) to the New Notes Trustee security indemnification satisfactory to the New Notes Trustee in its sole and absolute discretion. Except to enforce the right to receive payment of principal, premium, if any, or interest, when due, no holder of a New Note may pursue any remedy with respect to the New Indenture or such New Note unless:

Except in the case of a default or event of default in payment of principal of and interest on any New Note, the New Notes Trustee will be protected in withholding notice of a default or event of default if and so long as the New Notes Trustee in good faith determines that withholding the notice is in the interests of the holders of the New Notes. Conifer is required to deliver to the New Notes Trustee annually a statement from its applicable officers regarding whether or not they have knowledge of any default or event of default. For purposes of this paragraph, “default” means any event which is, or after notice or lapse of time or both would become, an event of default under the New Indenture with respect to the New Notes.

The New Notes will be senior unsecured indebtedness of Conifer Holdings, Inc. only and will not be obligations of or guaranteed by any of its subsidiaries. As such, the New Notes will:

The terms of the New Indenture and the New Notes do not prevent any consolidation or merger of Conifer with or into any other person, or successive consolidations or mergers in which Conifer or its successor or successors is a party or parties, or prevent any sale, conveyance or lease of all or substantially all of the property of Conifer to any other person authorized to acquire and operate the same. However, the terms of the New Indenture and the New Notes require that any such consolidation, merger, sale, conveyance or lease be upon the condition that:

Upon any such consolidation or merger, sale, lease or conveyance, the successor corporation formed, or into which Conifer is merged or to which such sale, conveyance or transfer is made, shall succeed to, and be substituted for, Conifer under the New Indenture with the same effect as if it had been an original party to the New Indenture. As a result, Conifer will be released from all its liabilities and obligations under the New Indenture and under the New Notes.

Although there is a limited body of case law interpreting the phrase “substantially all” and similar phrases, there is no precisely established definition of the phrase under applicable law. Accordingly, in certain circumstances there may be a degree of uncertainty as to whether a particular transaction would involve “substantially all” the property or assets of a person.

Subject to certain exceptions, the New Indenture:

Furthermore, under the New Indenture, Conifer may not permit a Material Subsidiary to:

A Material Subsidiary means a direct or indirect subsidiary of Conifer that is an insurance company with statutory surplus of at least $10 million for the most recently completed fiscal quarter.

However, Conifer may agree to any such merger or consolidation or sale, lease, assignment, pledge or transfer of securities, properties or assets if: (i) required by law and such lease, sale, assignment or transfer of securities is made to any person for the purpose of the qualification of such person to serve as a director; (ii) such lease, sale, assignment or transfer of securities is made by Conifer or any of its subsidiaries acting in a fiduciary capacity for any person other than Conifer or any of its subsidiaries; (iii) made in connection with the consolidation of Conifer with or the sale, lease or conveyance of all or substantially all of the assets of Conifer to, or merger of Conifer with or into, any other person (as to which the covenant described above under the heading “— Merger, Consolidation, Sale, Lease or Conveyance” shall apply); or (iv) it is required as a condition imposed by any law or any rule, regulation or order of any governmental agency or authority to the acquisition by Conifer of another entity; provided that in the case of (iv) only, after giving effect to such acquisition, (y) at least 90% of the issued and outstanding voting stock of such entity will be owned, directly or indirectly, by Conifer and (z) Conifer’s consolidated assets will be at least equal to 70% of its consolidated assets prior to the acquisition. These covenants will not prohibit Conifer or a Material Subsidiary from pledging any assets to secure borrowings incurred in the ordinary course of business.

Furthermore, for so long as the New Notes are outstanding, Conifer may not under the New Indenture, nor may it permit any of its subsidiaries to, incur debt for borrowed money, commitments for the extension of debt for

borrowed money or other obligations in excess of the greater of (i) $10 million and (ii) 10% of shareholders’ equity as reported in the most recent consolidated financial statements filed with the Securities and Exchange Commission, in each case in the aggregate, which is secured by any shares of voting stock of a Material Subsidiary (or securities convertible into, or options, warrants or rights to subscribe for or purchase shares of that voting stock) without making effective provision for securing the New Notes equally and ratably with that secured debt. However, this covenant will not apply (A) to any of the indebtedness described in the section “Description of Other Indebtedness”; or (B) to the extent that Conifer continues to own, directly or indirectly, at least 90% of the issued and outstanding voting stock of each Material Subsidiary (treating that encumbrance as a transfer of those shares to the secured party). The foregoing restriction does not apply to any:

The New Indenture will be discharged and will cease to be of further effect as to all New Notes (except for certain surviving rights of the New Notes Trustee and Conifer’s obligations with respect thereto), when:

Conifer will be deemed to have paid and will be discharged from any and all obligations in respect of the New Notes on the 91st day after it has made the deposit referred to below, and the provisions of the New Indenture will cease to be applicable with respect to the New Notes (except for, among other matters, certain obligations to register the transfer of or exchange of the New Notes, to replace stolen, lost or mutilated New Notes, to maintain paying agencies and to hold funds for payment in trust) if:

Conifer will not need to comply with certain restrictive covenants, and the provisions of the New Indenture will cease to be applicable with respect to an event of default under the New Notes other than an event of default due to its failure to pay the principal of or interest on the New Notes when due, upon the satisfaction of the conditions described in clauses 1, 2, 3, 4 and 5 of the preceding paragraph.

If Conifer exercises its option to omit compliance with certain provisions of the New Indenture as described in the immediately preceding paragraph and the New Notes are declared due and payable because of the occurrence of an event of default that remains applicable, the amount of money and/or non-callable government securities on deposit with the New Notes Trustee may not be sufficient to pay amounts due on the New Notes at the time of acceleration resulting from such event of default. In such event, Conifer will remain liable for such payments.

With the consent of the holders of greater than 50% in aggregate principal amount of the New Notes then outstanding, waivers, modifications and alterations of the terms of the New Indenture may be made which affect the rights of such holders of the New Notes. However, no modification or alteration may, without the consent of all holders of the New Notes then outstanding affected thereby:

In addition, as described in “— Events of Default; Waiver” set forth above, holders of greater than 50% in aggregate principal amount of the New Notes then outstanding may waive past events of default with respect to the New Notes in specified circumstances and may direct the trustee in enforcement of remedies.

Conifer and the New Notes Trustee may, without the consent of any holders, modify and supplement the New Indenture:

Notes outstanding at any time are the New Notes authenticated by the New Notes Trustee except for those cancelled by it, those mutilated, destroyed, lost or stolen that have been replaced by the New Notes Trustee, those delivered to the New Notes Trustee for cancellation and those described below as not outstanding. A New Note does not cease to be outstanding because Conifer or an affiliate of Conifer holds the New Note; provided, that in determining whether the holders of the requisite principal amount of New Notes have given or concurred in any request, demand, authorization, direction, notice, consent, amendment or waiver, New Notes owned by Conifer or an affiliate of Conifer will be disregarded and deemed not to be outstanding; provided further, that for purposes of determining whether the New Notes Trustee shall be protected in relying on such request, demand, authorization, notice, consent, amendment or waiver, only New Notes which a responsible officer of the New Notes Trustee actually knows are so owned shall be disregarded. If the paying agent holds on a redemption date money or securities sufficient to pay New Notes payable on that date, then immediately after such redemption date such New Notes will cease to be outstanding.

The New Notes Trustee may make reasonable rules for action by or a meeting of holders of the New Notes. The registrar or paying agent may make reasonable rules and set reasonable requirements for its functions.

No director, officer, employee, incorporator or shareholder of Conifer, as such, will have any liability for any obligations of Conifer under the New Notes or the New Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each holder of a New Note, by accepting a New Note waives and releases such liability. The waiver and release are part of the consideration for the issuance of the New Notes. Such waiver may not be effective to waive liabilities under the federal securities laws.

Wilmington Trust, National Association will act as trustee for the New Notes under the New Indenture, as permitted by the terms thereof. At all times, the New Notes Trustee must be organized and doing business under the laws of the United States or any state thereof, and must comply with the applicable requirements under the TIA. The New Notes Trustee may resign at any time by giving Conifer written notice and may be removed as New Notes Trustee with respect to the New Notes:

If the New Notes Trustee resigns or is removed, or if a vacancy exists in the office of the New Notes Trustee for any reason, Conifer will promptly appoint a new trustee. A resignation or removal of the New Notes Trustee will

become effective only upon the successor New Notes Trustee’s acceptance of appointment in writing. The successor New Notes Trustee will deliver a notice of its succession to holders of the New Notes.

If the New Notes Trustee acquires any conflicting interest, as defined in the TIA, with respect to the New Notes, within 90 days after the New Notes Trustee has acquired a conflicting interest which has not been cured or waived, the New Notes Trustee would generally be required by the TIA to eliminate that conflicting interest or resign as New Notes Trustee with respect to the New Notes issued under the New Indenture. If the New Notes Trustee resigns, Conifer is required to promptly appoint a successor trustee with respect to the New Indenture and the New Notes.

The New Notes Trustee will be under no obligation to exercise any of the rights or powers vested in it by the New Indenture at the request or direction of any of the holders pursuant to the New Indenture, unless such holders shall have offered to the New Notes Trustee security or indemnity satisfactory to the New Notes Trustee against the costs, expenses, losses and liabilities which might be incurred by it in compliance with such request or direction.

The New Notes Trustee and/or certain of its affiliates may provide banking, investment and other services to us. A trustee under the New Indenture may act as trustee under any of our other indentures.

Any notices required to be given to the holders of the New Notes will be given to DTC, and DTC will communicate these notices to DTC participants in accordance with its standard procedures.

The New Indenture and the New Notes are governed by, and will be construed in accordance with, the laws of the State of New York. The New Indenture will be subject to the provisions of the TIA that are required to be part of the New Indenture and shall, to the extent applicable, be governed by such provisions.

The New Notes will be issued in registered, global form in minimum denominations of $25 and integral multiples of $25 in excess thereof or in units, each representing $25. The New Notes will be issued on the issue date therefor only against payment in immediately available funds.

The New Notes initially will be represented by one or more permanent global certificates (which may be subdivided) in definitive fully registered form without interest coupons (referred to herein as “global notes”). The global notes will be deposited with, or on behalf of, DTC and will be registered in the name of DTC or its nominee. Investors may hold their beneficial interests in a global note directly through DTC or indirectly through organizations which are participants in the DTC system.

Except as set forth in this Prospectus, the global notes may be transferred, in whole and not in part, only to another nominee of DTC or to a successor of DTC or its nominee. Beneficial interests in the global notes may not be exchanged for New Notes in certificated form except in the limited circumstances described below under “—Exchange of Book Entry Notes for Certificated Notes.” Transfer of beneficial interests in the global notes will be subject to the applicable rules and procedures of DTC and its direct and indirect participants, which may change from time to time.

The following description of the operations and procedures of DTC are provided solely as a matter of convenience. These operations and procedures are solely within the control of the respective settlement systems and are subject to changes by them. Neither Conifer nor the New Notes Trustee takes any responsibility for these operations and procedures and urges investors to contact the systems or their participants to directly discuss these matters.

DTC has advised us that it is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the Uniform Commercial Code and a “clearing agency” registered pursuant to the provisions of Section 17A of the Exchange Act. DTC was created to hold securities for its participating organizations (referred to herein as “participants”), and to facilitate the clearance and settlement of

transactions in those securities between participants through electronic, computerized book-entry changes in accounts of its participants, thereby eliminating the need for physical movement of certificates. Participants include both U.S. and non-U.S. securities brokers and dealers (including the underwriters), banks, trust companies, clearing corporations and certain other organizations. Indirect access to DTC’s system is also available to banks, securities brokers, dealers, trust companies and clearing corporations that clear through or maintain a custodial relationship with a participant, either directly or indirectly (referred to herein as “indirect participants”). Persons who are not participants may beneficially own securities held by or on behalf of DTC only through participants or indirect participants. The ownership interest and transfer of ownership interest of each actual purchaser of each security held by or on behalf of DTC are recorded on the records of participants and indirect participants.

DTC has advised us that, pursuant to procedures established by it:

Upon issuance, a holder may hold its interests in the global notes directly through DTC if it is a participant, or indirectly through organizations that are participants or indirect participants. The depositaries, in turn, will hold interests in the New Notes in customers’ securities accounts in the depositaries’ names on the books of DTC.

All interests in a global note will be subject to the procedures and requirements of DTC. The laws of some jurisdictions require that certain persons take physical delivery in certificated form of securities that they own. Consequently, the ability to transfer beneficial interests in a global note to those persons will be limited to that extent. Because DTC can act only on behalf of participants, which in turn act on behalf of indirect participants and certain banks, the ability of a person having beneficial interests in a global note to pledge its interests to persons or entities that do not participate in the DTC system, or otherwise take actions in respect of its interests, may be affected by the lack of a physical certificate evidencing its interests. For certain other restrictions on the transferability of the New Notes, see “— Exchange of Book Entry Notes for Certificated Notes.”

Except as described below, owners of interests in the global notes will not have New Notes registered in their name, will not receive physical delivery of New Notes in certificated form and will not be considered the registered owners or holders thereof under the New Indenture for any purpose.

Payments on the global notes registered in the name of DTC, or its nominee, will be payable in immediately available funds by the New Notes Trustee (or the paying agent if other than the New Notes Trustee) to DTC or its nominee in its capacity as the registered holder under the New Indenture. Conifer and the New Notes Trustee, as applicable, will treat the persons in whose names the New Notes, including the global notes, are registered as the owners thereof for the purpose of receiving such payments and for any and all other purposes whatsoever. Neither the New Notes Trustee nor any agent thereof has or will have any responsibility or liability for:

DTC has advised Conifer that its current practice, upon receipt of any payment in respect of securities such as the New Notes (including principal and interest), is to credit the accounts of the relevant participants with the payment on the payment date, in amounts proportionate to their respective holdings in the principal amount of the relevant security as shown on the records of DTC, unless DTC has reason to believe it will not receive payment on such payment date. Payments by participants and indirect participants to the beneficial owners of New Notes will be governed by standing instructions and customary practices and will be the responsibility of participants or indirect participants and will not be the responsibility of DTC, the New Notes Trustee, as applicable, or Conifer.

Neither Conifer nor the New Notes Trustee will be liable for any delay by DTC or any of its participants or indirect participants in identifying the beneficial owners of the New Notes, and Conifer and the New Notes Trustee may conclusively rely on and will be protected in relying on instructions from DTC or its nominee for all purposes.

Redemption notices shall be sent to DTC or its nominee.

Initial settlement for the New Notes will be made in immediately available funds. Any secondary market trading activity in interests in the global notes will settle in immediately available funds, subject in all cases to the rules and procedures of DTC and its participants. Transfers between participants in DTC will be effected in accordance with DTC’s procedures, and will settle in same-day funds.

DTC has advised us that it will take any action permitted to be taken by a holder of New Notes only at the direction of one or more participants who have an interest in DTC’s global notes in respect of the portion of the principal amount of the New Notes as to which the participant or participants has or have given direction. However, if an event of default exists under the New Indenture, DTC reserves the right to exchange the global notes for New Notes in certificated form and to distribute the certificated New Notes to its participants.

Conifer believes that the information in this section concerning DTC and its book-entry system has been obtained from reliable sources, but Conifer does not take responsibility for the accuracy of this information. Although DTC will agree to the procedures described in this section to facilitate transfers of interests in the global notes among participants in DTC, DTC is not obligated to perform or to continue to perform these procedures, and these procedures may be discontinued at any time by giving reasonable notice. Neither Conifer nor the New Notes Trustee will have any responsibility or liability for any aspect of the performance by DTC or its participants or indirect participants of any of their respective obligations under the rules and procedures governing their operations or for maintaining, supervising or reviewing any records relating to the global notes that are maintained by DTC or any of its participants or indirect participants.

A global note is exchangeable for certificated New Notes in definitive, fully registered form without interest coupons if:

In addition, beneficial interests in a global note may be exchanged by or on behalf of DTC for certificated New Notes upon request by DTC, but only upon at least 20 days’ prior written notice given to the New Notes Trustee in accordance with DTC’s customary procedures. In all cases, certificated New Notes delivered in exchange for any global note or beneficial interests therein will be registered in the names, and issued in any approved denominations, requested by or on behalf of the depository in accordance with its customary procedures.

Conifer issued the 6.75% Senior Unsecured Notes due 2023 under an indenture, dated as of September 24, 2018 (the “Indenture”), as amended and supplemented by a supplemental indenture, dated as of September 24, 2018, and as amended by an amendment to the supplemental indenture, dated as of October 12, 2018 (as amended and supplemented, the “Existing Indenture”) between Conifer and Wilmington Trust, National Association, as trustee (the “Existing Notes Trustee”). The terms of the Existing Notes include those provisions contained in the Existing Indenture and those made part of the Existing Indenture by reference to the Trust Indenture Act of 1939, as amended (the “TIA”). Wherever we refer to particular sections or defined terms of the Existing Indenture, it is our intent that those sections or defined terms will be incorporated by reference in this Prospectus. We urge you to read these documents because they, and not this description, define your rights as a holder of the Existing Notes.

The Existing Notes are general unsecured senior obligations of Conifer, and will mature on September 30, 2023 (referred to herein as the “maturity date”), unless redeemed earlier as described below. The Existing Notes are not guaranteed by any of Conifer’s subsidiaries.

The Existing Notes bear interest at the rate of 6.75% per year, accruing from September 24, 2018. Interest on the Existing Notes is payable quarterly in arrears on March 31, June 30, September 30 and December 31 of each year, commencing December 31, 2018, to the persons in whose names the Existing Notes are registered at the close of business on the preceding March 15, June 15, September 15 and December 15, respectively. Interest on the Existing Notes is computed on the basis of a 360-day year of twelve 30-day months.

The registered holder of an Existing Note is treated as the owner of the Existing Note for all purposes. Only registered holders have rights under the Existing Indenture. Payment of the principal of, and interest on, the Existing Notes represented by a global note registered in the name of or held by DTC or its nominee will be made in immediately available funds to DTC or its nominee, as the case may be, as the registered owner and holder of such global note. See “Book-Entry, Delivery and Form of Notes” below for more information.

The Existing Indenture contains no covenants or restrictions restricting the incurrence of debt by the Company or its subsidiaries except to the extent describe under the heading “— Certain Covenants” below. The Existing Indenture contains no financial covenants and does not restrict Conifer from paying dividends or issuing or repurchasing other securities, and does not contain any provision that would provide protection to the holders of the Existing Notes against a sudden and dramatic decline in credit quality resulting from a merger, takeover, recapitalization or similar restructuring or any other event involving the Company or its subsidiaries that may adversely affect our credit quality, except to the extent described under the headings “— Merger, Consolidation, Sale, Lease or Conveyance” and “— Certain Covenants” below.

The Existing Notes are not subject to, or entitled to the benefits of, a sinking fund or repurchase by Conifer at the option of the holders. In addition, the Existing Notes are not convertible into, or exchangeable for, any other securities. We may from time to time purchase the Existing Notes in the open market or otherwise.

Interest on the Existing Notes accrues at the rate of 6.75% per annum, accruing from September 24, 2018. Interest on the Existing Notes is payable quarterly in arrears on March 31, June 30, September 30 and December 31 of each year, commencing December 31, 2018, to the persons in whose names the Existing Notes are registered at the close of business on the preceding March 15, June 15, September 15 and December 15, respectively. Interest on the Existing Notes is computed on the basis of a 360-day year of twelve 30-day months.

If an interest payment date, redemption date or the maturity date falls on a day that is not a business day, the related payment of interest and principal will be made on the next day that is a business day, and no interest on the Existing Notes or such payment will accrue for the period from and after such interest payment date, redemption date or maturity date, as the case may be, to the date payment is made. A “business day” means when used with respect to any place of payment or any other particular location, any day other than a Saturday, a Sunday that is not a day on which banking institutions or trust companies in that Place of Payment or other location are authorized by law, regulation or executive order to close.

Prior to the maturity date, we may, at our option, redeem the Existing Notes in whole at any time or in part from time to time, on not less than 30 days and not more than 60 days’ prior notice delivered to the holders of the Existing Notes. The Existing Notes will be redeemable at a redemption price equal to 100% of the principal amount of the Existing Notes to be redeemed plus accrued and unpaid interest to, but not including, the date of redemption.

On and after any redemption date, interest will cease to accrue on the Existing Notes called for redemption. On or prior to 11:00 a.m. New York City time on any redemption date, we are required to deposit with the paying agent money sufficient to pay the redemption price of and accrued interest on the Existing Notes to be redeemed on such date.

If less than all of the Existing Notes are to be redeemed at any time, the Existing Notes will be redeemed according to DTC’s applicable procedures or, in the case of definitive notes, by lot, pro rata or by such other method as the Existing Notes Trustee will deem fair and appropriate. Existing Notes and portions of Existing Notes selected shall be in minimum denominations of $25 and any integral multiple of $25 in excess thereof, except that, if all of the Existing Notes of a holder are to be redeemed, the entire outstanding amount of Existing Notes held by such holder, shall be redeemed.

Notice of redemption will be given to each holder of Existing Notes to be redeemed at least 30 days and not more than 60 days before the applicable redemption date.

If any Existing Note is to be redeemed in part only, the notice of redemption that relates to that Existing Note will state the portion of the principal amount of that Existing Note that is to be redeemed. A new Existing Note in principal amount equal to the unredeemed portion of the original Existing Note will be issued in the name of the holder of any Existing Note being redeemed in part upon surrender for cancellation of the original Existing Note. Existing Notes called for redemption become due and payable on the date fixed for redemption.

The Existing Notes are listed on the Nasdaq Global Market.

An “event of default,” when used in the Existing Indenture, means any of the following:

If an event of default occurs and continues, the Existing Notes Trustee by notice to Conifer, or the holders of at least 25% in aggregate principal amount of the outstanding Existing Notes by notice to Conifer (with a copy to the Existing Notes Trustee), may declare the entire principal of and all accrued but unpaid interest on all the Existing Notes to be due and payable immediately. Subject to certain conditions, but before a judgment or decree for payment of the money due has been obtained, such declaration and its consequences may be rescinded and annulled by the holders of a majority in principal amount of the outstanding Existing Notes. The Existing Indenture also provides that the holders of a majority in principal amount of the Existing Notes may waive any existing default with respect to the Existing Notes and its consequences, except a default in the payment of the principal of and interest on the Existing Notes.

The holders of a majority in principal amount of the Existing Notes may direct the time, method and place of conducting any proceeding for exercising any remedy available to the Existing Notes Trustee or exercising any trust or power conferred on the Existing Notes Trustee. However, the Existing Notes Trustee may decline to follow any such direction if the Existing Notes Trustee determines upon advice of counsel that the action or proceeding so directed may not lawfully be taken or if the Existing Notes Trustee in good faith determines that the action or proceeding so directed would involve the Existing Notes Trustee in personal liability or if the Existing Notes Trustee in good faith determines that the actions or forbearances specified in or pursuant to such direction would be unduly prejudicial to the interests of holders of the Existing Notes not joining in the giving of such directions. In addition, the Existing Notes Trustee may take any other action deemed proper by the Existing Notes Trustee not inconsistent with such direction received from the holders of the Existing Notes. The Existing Notes Trustee shall not be obligated to take any action at the direction of holders unless such holders have offered (and if requested, provided) to the Existing Notes Trustee security or indemnity satisfactory to the Existing Notes Trustee.

In case an event of default occurs and is continuing, the Existing Notes Trustee will be under no obligation to exercise any of the rights or powers under the Existing Indenture at the request or direction of any holders of Existing Notes unless such holders have offered (and if requested, provided) to the Existing Notes Trustee indemnification satisfactory to the Existing Notes Trustee. Except to enforce the right to receive payment of principal, premium, if any, or interest, when due, no holder of an Existing Note may pursue any remedy with respect to the Existing Indenture or such Existing Note unless:

Except in the case of a default or event of default in payment of principal of and interest on any Existing Note, the Existing Notes Trustee will be protected in withholding notice of a default or event of default if and so long as the Existing Notes Trustee in good faith determines that withholding the notice is in the interests of the holders of the Existing Notes. Conifer is required to deliver to the Existing Notes Trustee annually a statement from its applicable officers regarding whether or not they have knowledge of any default or event of default. For purposes of this paragraph, “default” means any event which is, or after notice or lapse of time or both would become, an event of default under the Existing Indenture with respect to the Existing Notes.

The Existing Notes are senior unsecured indebtedness of Conifer Holdings, Inc. only and are not obligations of or guaranteed by any of its subsidiaries. As such, the Existing Notes:

The terms of the Existing Indenture and the Existing Notes do not prevent any consolidation or merger of Conifer with or into any other person, or successive consolidations or mergers in which Conifer or its successor or successors is a party or parties, or prevent any sale, conveyance or lease of all or substantially all of the property of Conifer to any other person authorized to acquire and operate the same. However, the terms of the Existing Indenture and the Existing Notes require that any such consolidation, merger, sale, conveyance or lease be upon the condition that:

Upon any such consolidation or merger, sale, lease or conveyance, the successor corporation formed, or into which Conifer is merged or to which such sale, conveyance or transfer is made, shall succeed to, and be substituted for, Conifer under the Existing Indenture with the same effect as if it had been an original party to the Existing Indenture. As a result, Conifer will be released from all its liabilities and obligations under the Existing Indenture and under the Existing Notes.

Although there is a limited body of case law interpreting the phrase “substantially all” and similar phrases, there is no precisely established definition of the phrase under applicable law. Accordingly, in certain circumstances there may be a degree of uncertainty as to whether a particular transaction would involve “substantially all” the property or assets of a person.

Subject to certain exceptions, the Existing Indenture:

Furthermore, under the Existing Indenture, Conifer may not permit a Material Subsidiary to:

A Material Subsidiary means a direct or indirect subsidiary of Conifer that is an insurance company with statutory surplus of at least $10 million for the most recently completed fiscal quarter.

However, Conifer may agree to any such merger or consolidation or sale, lease, assignment, pledge or transfer of securities, properties or assets if: (i) required by law and such lease, sale, assignment or transfer of securities is made to any person for the purpose of the qualification of such person to serve as a director; (ii) such lease, sale, assignment or transfer of securities is made by Conifer or any of its subsidiaries acting in a fiduciary capacity for any person other than Conifer or any of its subsidiaries; (iii) made in connection with the consolidation of Conifer with or the sale, lease or conveyance of all or substantially all of the assets of Conifer to, or merger of Conifer with or into, any other person (as to which the covenant described above under the heading “— Merger, Consolidation, Sale, Lease or Conveyance” shall apply); or (iv) it is required as a condition imposed by any law or any rule, regulation or order of any governmental agency or authority to the acquisition by Conifer of another entity; provided that in the case of (iv) only, after giving effect to such acquisition, (y) at least 90% of the issued and outstanding voting stock of such entity will be owned, directly or indirectly, by Conifer and (z) Conifer’s consolidated assets will be at least equal to 70% of its consolidated assets prior to the acquisition. These covenants will not prohibit Conifer or a Material Subsidiary from pledging any assets to secure borrowings incurred in the ordinary course of business.

Furthermore, for so long as the Existing Notes are outstanding, Conifer may not under the Existing Indenture, nor may it permit any of its subsidiaries to, incur debt for borrowed money, commitments for the extension of debt for borrowed money or other obligations in excess of the greater of (i) $10 million and (ii) 10% of shareholders’ equity as reported in the most recent consolidated financial statements filed with the Securities and Exchange Commission, in each case in the aggregate, which is secured by any shares of voting stock of a Material Subsidiary (or securities convertible into, or options, warrants or rights to subscribe for or purchase shares of that voting stock) without making effective provision for securing the Existing Notes equally and ratably with that secured debt. However, this covenant will not apply (A) to any of the indebtedness described in the section “Description of Other Indebtedness”; or (B) to the extent that Conifer continues to own, directly or indirectly, at least 90% of the issued and outstanding voting stock of each Material Subsidiary (treating that encumbrance as a transfer of those shares to the secured party). The foregoing restriction does not apply to any:

The Existing Indenture will be discharged and will cease to be of further effect as to all Existing Notes (except for certain surviving rights of the Existing Notes Trustee and Conifer’s obligations with respect thereto), when:

Conifer will be deemed to have paid and will be discharged from any and all obligations in respect of the Existing Notes on the 91st day after it has made the deposit referred to below, and the provisions of the Existing Indenture will cease to be applicable with respect to the Existing Notes (except for, among other matters, certain obligations to register the transfer of or exchange of the Existing Notes, to replace stolen, lost or mutilated Existing Notes, to maintain paying agencies and to hold funds for payment in trust) if:

Conifer will not need to comply with certain restrictive covenants, and the provisions of the Existing Indenture will cease to be applicable with respect to an event of default under the Existing Notes other than an event of default due to its failure to pay the principal of or interest on the Existing Notes when due, upon the satisfaction of the conditions described in clauses 1, 2, 3, 4 and 5 of the preceding paragraph.

If Conifer exercises its option to omit compliance with certain provisions of the Existing Indenture as described in the immediately preceding paragraph and the Existing Notes are declared due and payable because of the occurrence of an event of default that remains applicable, the amount of money and/or non-callable government securities on deposit with the Existing Notes Trustee may not be sufficient to pay amounts due on the Existing Notes at the time of acceleration resulting from such event of default. In such event, Conifer will remain liable for such payments.

With the consent of the holders of greater than 50% in aggregate principal amount of the Existing Notes then outstanding, waivers, modifications and alterations of the terms of the Existing Indenture may be made which affect the rights of such holders of the Existing Notes. However, no modification or alteration may, without the consent of all holders of the Existing Notes then outstanding affected thereby:

In addition, as described in “— Events of Default; Waiver” set forth above, holders of greater than 50% in aggregate principal amount of the Existing Notes then outstanding may waive past events of default with respect to the Existing Notes in specified circumstances and may direct the trustee in enforcement of remedies.

Conifer and the Existing Notes Trustee may, without the consent of any holders, modify and supplement the Existing Indenture:

Existing Notes outstanding at any time are the Existing Notes authenticated by the Existing Notes Trustee except for those cancelled by it, those mutilated, destroyed, lost or stolen that have been replaced by the Existing Notes Trustee, those delivered to the Existing Notes Trustee for cancellation and those described below as not outstanding. An Existing Note does not cease to be outstanding because Conifer or an affiliate of Conifer holds the Existing Note; provided, that in determining whether the holders of the requisite principal amount of Existing Notes have given or concurred in any request, demand, authorization, direction, notice, consent, amendment or waiver, Existing Notes owned by Conifer or an affiliate of Conifer will be disregarded and deemed not to be outstanding; provided further, that for purposes of determining whether the Existing Notes Trustee shall be protected in relying on such request, demand, authorization, notice, consent, amendment or waiver, only Existing Notes which a responsible officer of the Existing Notes Trustee actually knows are so owned shall be disregarded. If the paying agent holds on a redemption date money or securities sufficient to pay Existing Notes payable on that date, then immediately after such redemption date such Existing Notes will cease to be outstanding.

The Existing Notes Trustee may make reasonable rules for action by or a meeting of holders of the Existing Notes. The registrar or paying agent may make reasonable rules and set reasonable requirements for its functions.

No director, officer, employee, incorporator or shareholder of Conifer, as such, will have any liability for any obligations of Conifer under the Existing Notes or the Existing Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each holder of an Existing Note, by accepting an Existing Note waives and releases such liability. The waiver and release are part of the consideration for the issuance of the Existing Notes. Such waiver may not be effective to waive liabilities under the federal securities laws.

Wilmington Trust, National Association is trustee for the Existing Notes under the Existing Indenture, as permitted by the terms thereof. At all times, the Existing Notes Trustee must be organized and doing business under the laws of the United States or any state thereof, and must comply with the applicable requirements under the TIA. The Existing Notes Trustee may resign at any time by giving Conifer written notice and may be removed as Existing Notes Trustee with respect to the Existing Notes:

If the Existing Notes Trustee resigns or is removed, or if a vacancy exists in the office of the Existing Notes Trustee for any reason, Conifer will promptly appoint a new Existing Notes Trustee. A resignation or removal of the

Existing Notes Trustee will become effective only upon the successor Existing Notes Trustee’s acceptance of appointment in writing. The successor Existing Notes Trustee will deliver a notice of its succession to holders of the Existing Notes.

If the Existing Notes Trustee acquires any conflicting interest, as defined in the TIA, with respect to the Existing Notes, within 90 days after the Existing Notes Trustee has acquired a conflicting interest which has not been cured or waived, the Existing Notes Trustee would generally be required by the TIA to eliminate that conflicting interest or resign as Existing Notes Trustee with respect to the Existing Notes issued under the Existing Indenture. If the Existing Notes Trustee resigns, Conifer is required to promptly appoint a successor trustee with respect to the Existing Indenture and the Existing Notes.

The Existing Notes Trustee will be under no obligation to exercise any of the rights or powers vested in it by the Existing Indenture at the request or direction of any of the holders pursuant to the Existing Indenture, unless such holders shall have offered to the Existing Notes Trustee security or indemnity satisfactory to the Existing Notes Trustee against the costs, expenses, losses and liabilities which might be incurred by it in compliance with such request or direction.

The Existing Notes Trustee and/or certain of its affiliates may provide banking, investment and other services to us. A trustee under the Existing Indenture may act as trustee under any of our other indentures.

Any notices required to be given to the holders of the Existing Notes will be given to DTC, and DTC will communicate these notices to DTC participants in accordance with its standard procedures.

The Existing Indenture and the Existing Notes are governed by, and will be construed in accordance with, the laws of the State of New York. The Existing Indenture is subject to the provisions of the TIA that are required to be part of the Existing Indenture and shall, to the extent applicable, be governed by such provisions.

The following description of the operations and procedures of DTC are provided solely as a matter of convenience. These operations and procedures are solely within the control of the respective settlement systems and are subject to changes by them. Neither Conifer nor the Existing Notes Trustee takes any responsibility for these operations and procedures and urges investors to contact the systems or their participants to directly discuss these matters.

DTC has advised us that it is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the Uniform Commercial Code and a “clearing agency” registered pursuant to the provisions of Section 17A of the Exchange Act. DTC was created to hold securities for its participating organizations (referred to herein as “participants”), and to facilitate the clearance and settlement of transactions in those securities between participants through electronic, computerized book-entry changes in accounts of its participants, thereby eliminating the need for physical movement of certificates. Participants include both U.S. and non-U.S. securities brokers and dealers (including the underwriters), banks, trust companies, clearing corporations and certain other organizations. Indirect access to DTC’s system is also available to banks, securities brokers, dealers, trust companies and clearing corporations that clear through or maintain a custodial relationship with a participant, either directly or indirectly (referred to herein as “indirect participants”). Persons who are not participants may beneficially own securities held by or on behalf of DTC only through participants or indirect participants. The ownership interest and transfer of ownership interest of each actual purchaser of each security held by or on behalf of DTC are recorded on the records of participants and indirect participants.

DTC has advised us that, pursuant to procedures established by it:

Upon issuance, a holder may hold its interests in the global notes directly through DTC if it is a participant, or indirectly through organizations that are participants or indirect participants. The depositaries, in turn, will hold interests in the Existing Notes in customers’ securities accounts in the depositaries’ names on the books of DTC.

All interests in a global note will be subject to the procedures and requirements of DTC. The laws of some jurisdictions require that certain persons take physical delivery in certificated form of securities that they own. Consequently, the ability to transfer beneficial interests in a global note to those persons will be limited to that extent. Because DTC can act only on behalf of participants, which in turn act on behalf of indirect participants and certain banks, the ability of a person having beneficial interests in a global note to pledge its interests to persons or entities that do not participate in the DTC system, or otherwise take actions in respect of its interests, may be affected by the lack of a physical certificate evidencing its interests. For certain other restrictions on the transferability of the Existing Notes, see “— Exchange of Book Entry Notes for Certificated Notes.”

Except as described below, owners of interests in the global notes will not have Existing Notes registered in their name, will not receive physical delivery of Existing Notes in certificated form and will not be considered the registered owners or holders thereof under the Existing Indenture for any purpose.

Payments on the global notes registered in the name of DTC, or its nominee, will be payable in immediately available funds by the Existing Notes Trustee (or the paying agent if other than the Existing Notes Trustee) to DTC or its nominee in its capacity as the registered holder under the Existing Indenture. Conifer and the Existing Notes Trustee, as applicable, will treat the persons in whose names the Existing Notes, including the global notes, are registered as the owners thereof for the purpose of receiving such payments and for any and all other purposes whatsoever. Neither the Existing Notes Trustee nor any agent thereof has or will have any responsibility or liability for:

DTC has advised Conifer that its current practice, upon receipt of any payment in respect of securities such as the Existing Notes (including principal and interest), is to credit the accounts of the relevant participants with the payment on the payment date, in amounts proportionate to their respective holdings in the principal amount of the relevant security as shown on the records of DTC, unless DTC has reason to believe it will not receive payment on such payment date. Payments by participants and indirect participants to the beneficial owners of Existing Notes will be governed by standing instructions and customary practices and will be the responsibility of participants or indirect participants and will not be the responsibility of DTC, the Existing Notes Trustee, as applicable, or Conifer.

Neither Conifer nor the Existing Notes Trustee will be liable for any delay by DTC or any of its participants or indirect participants in identifying the beneficial owners of the Existing Notes, and Conifer and the Existing Notes Trustee may conclusively rely on and will be protected in relying on instructions from DTC or its nominee for all purposes.

Redemption notices shall be sent to DTC or its nominee.

Initial settlement for the Existing Notes was made in immediately available funds. Any secondary market trading activity in interests in the global notes will settle in immediately available funds, subject in all cases to the rules and procedures of DTC and its participants. Transfers between participants in DTC will be effected in accordance with DTC’s procedures, and will settle in same-day funds.

DTC has advised us that it will take any action permitted to be taken by a holder of Existing Notes only at the direction of one or more participants who have an interest in DTC’s global notes in respect of the portion of the

principal amount of the Existing Notes as to which the participant or participants has or have given direction. However, if an event of default exists under the Indenture, DTC reserves the right to exchange the global notes for Existing Notes in certificated form and to distribute the certificated Existing Notes to its participants.

Conifer believes that the information in this section concerning DTC and its book-entry system has been obtained from reliable sources, but Conifer does not take responsibility for the accuracy of this information. Although DTC will agree to the procedures described in this section to facilitate transfers of interests in the global notes among participants in DTC, DTC is not obligated to perform or to continue to perform these procedures, and these procedures may be discontinued at any time by giving reasonable notice. Neither Conifer nor the Existing Notes Trustee will have any responsibility or liability for any aspect of the performance by DTC or its participants or indirect participants of any of their respective obligations under the rules and procedures governing their operations or for maintaining, supervising or reviewing any records relating to the global notes that are maintained by DTC or any of its participants or indirect participants.

A global note is exchangeable for certificated Existing Notes in definitive, fully registered form without interest coupons if:

In addition, beneficial interests in a global note may be exchanged by or on behalf of DTC for certificated Existing Notes upon request by DTC, but only upon at least 20 days’ prior written notice given to the Existing Notes Trustee in accordance with DTC’s customary procedures. In all cases, certificated Existing Notes delivered in exchange for any global note or beneficial interests therein will be registered in the names, and issued in any approved denominations, requested by or on behalf of the depository in accordance with its customary procedures.

The following is a discussion of the material U.S. federal income tax considerations relevant to the purchase of New Notes pursuant to the new money offering, the exchange of Existing Notes for New Notes pursuant to the Exchange Offer and the ownership and disposition of the New Notes. The following discussion is not exhaustive of all possible tax considerations. This summary is based upon the Internal Revenue Code of 1986, as amended (the “Code”), U.S. Treasury Department (the “U.S. Treasury”) regulations (including proposed and temporary regulations), rulings, current administrative interpretations and official pronouncements of the Internal Revenue Service (the “IRS”), and judicial decisions, all as currently in effect and all of which are subject to differing interpretations or to change, possibly with retroactive effect. No rulings have been sought or are expected to be sought from the IRS and no assurance can be given that the IRS would not assert, or that a court would not sustain, a position contrary to any of the tax consequences described below. There can be no assurance that a change in law will not alter significantly the tax considerations described in this summary discussion.

This summary is for general information only, and does not purport to discuss all aspects of U.S. federal income taxation that may be important to a particular beneficial owner (referred to in this summary as a “holder”) in light of its investment or tax circumstances or to holders subject to special tax rules, such as partnerships, subchapter S corporations or other pass-through entities (and, in each case, the owners of such pass-through entities), any government (or instrumentality or agency thereof), banks, financial institutions, tax-exempt entities, retirement plans, insurance companies, regulated investment companies, real estate investment trusts, “controlled foreign corporations” and “passive foreign investment companies” and shareholders of such corporations, trusts and estates, certain former citizens or residents of the United States, part-year non-resident aliens, holders of equity in us, dealers or traders in securities, currencies or notional principal contracts, holders who mark their securities to market for federal income tax purposes, persons holding the Existing Notes or New Notes as part of an integrated investment, including a “straddle,” “hedge,” “constructive sale,” or “conversion transaction,” persons (other than Non-U.S. Holders (as defined below)) whose functional currency for tax purposes is not the U.S. dollar, and persons subject to the alternative minimum tax provisions of the Code. This summary does not include any description of any tax treaty or the tax laws of any state or local governments, or of any foreign government, that may be applicable to a particular holder nor does it discuss any U.S. federal tax consequences other than U.S. federal income tax consequences (such as U.S. federal estate or gift tax consequences). Furthermore, this summary does not address the tax consequences to any shareholder, beneficiary or other owner of an interest in a holder of New Notes.

This discussion deals only with holders that purchase New Notes offered in this Prospectus at the price printed on the front cover of this Prospectus or that exchange their Existing Notes for New Notes pursuant to the Exchange Offer, and that hold Existing Notes and New Notes as “capital assets” (generally, property held for investment).

THIS SUMMARY OF MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS IS FOR GENERAL INFORMATION ONLY AND DOES NOT CONSTITUTE TAX ADVICE. PROSPECTIVE INVESTORS CONSIDERING PURCHASING THE NEW NOTES PURSUANT TO THE NEW MONEY OFFERING OR PARTICIPATING IN THE EXCHANGE OFFER SHOULD CONSULT THEIR TAX ADVISORS REGARDING THE APPLICATION OF THE TAX CONSEQUENCES DISCUSSED BELOW TO THEIR PARTICULAR SITUATIONS, POTENTIAL CHANGES IN APPLICABLE TAX LAWS AND THE APPLICATION OF ANY STATE, LOCAL, FOREIGN OR OTHER TAX LAWS, INCLUDING GIFT AND ESTATE TAX LAWS, AND ANY TAX TREATIES.

As used in this Prospectus, the term “U.S. Holder” means a beneficial owner of Existing Notes or New Notes offered in this Prospectus that is for U.S. federal income tax purposes:

If an entity or arrangement treated as a partnership (or other flow-through entity) for U.S. federal income tax purposes holds Existing Notes or New Notes offered in this Prospectus, the U.S. federal income tax treatment of a partner (or other owner of the entity or arrangement) generally will depend upon the status of the partner (or other owner) and the activities of the partnership, and accordingly, this summary does not apply to partnerships (or other flow-through entities). A partner (or other owner) of a partnership (or other flow-through entity) holding Existing Notes or New Notes offered in this Prospectus should consult its tax advisor regarding the U.S. federal income tax consequences of the purchase of new notes pursuant to the new money offering, the exchange of Existing Notes for New Notes pursuant to the Exchange Offer and the ownership and disposition of the New Notes.

The U.S. federal income tax consequences of exchanging Existing Notes for New Notes pursuant to the Exchange Offer may depend on whether the differences between the New Notes and the Existing Notes constitute a “significant modification.” In general, there will be a significant modification if, based on all the facts and circumstances, and taking into account all modifications collectively, the changes to the legal rights and obligations are “economically significant.” Although not free from doubt, we believe that the changes between the Existing Notes and New Notes should be considered a significant modification, and therefore that the exchange of Existing Notes for New Notes should be considered an exchange for U.S. federal income tax purposes (the “Exchange”). The remainder of this discussion assumes that our position is correct. If, notwithstanding our position, the changes were not considered a significant modification, the exchange of Existing Notes for New Notes would be a non-event for U.S. federal income tax purposes and an exchanging holder’s tax basis and holding period in the New Notes would be the same as its adjusted tax basis and holding period in the Existing Notes exchanged therefor.

The U.S. federal income tax treatment of the Exchange with respect to Existing Notes also will depend on whether the Exchange qualifies as a recapitalization pursuant to Section 368(a)(1)(E) of the Code with respect to Existing Notes, as discussed below. If the Exchange of Existing Notes qualifies as a recapitalization, a U.S. Holder of such notes will not recognize any gain or loss on the Exchange other than to the extent that the aggregate principal amount of the New Notes received by such holder exceeds the aggregate principal amount of the Existing Notes exchanged therefor. A U.S. Holder will take a tax basis in the New Notes equal to its adjusted tax basis in the Existing Notes exchanged therefor immediately prior to the Exchange (increased by the amount of any gain recognized on the Exchange), and such U.S. Holder’s holding period for the New Notes will include its holding period in the Existing Notes exchanged therefor.

In general, the Exchange will qualify as a recapitalization only if both the Existing Notes and the New Notes that are subject to such Exchange constitute “securities” for purposes of Section 368(a)(1)(E) of the Code. The rules for determining whether a debt instrument constitutes a security under the recapitalization provisions of U.S. federal income tax law are unclear. The term “security” is not defined for this purpose in the Code or the Treasury Regulations and has not been clearly defined by judicial decisions. The determination of whether a debt instrument is a security involves an overall evaluation of the nature of the debt instrument, the extent of the investor’s proprietary interest in the issuer compared with the similarity of the debt instrument to a right to receive a cash payment and certain other considerations. One of the most significant factors considered in determining whether a particular debt instrument is a security is its original term. In general, debt instruments with a term of less than five years are not likely to (but may in certain circumstances) be considered securities, debt instruments with a term of ten years or more are likely to be considered securities, while debt instruments with an initial term at issuance of five to ten years are often considered securities, but their status may be unclear. Because the Existing Notes had terms of more than five years, we believe that both the Existing Notes and the New Notes should be considered securities based on the all the relevant facts and circumstances, and the Exchange should qualify as a recapitalization.

This determination is not free from doubt, however, and it is possible that the IRS could take a contrary view. The IRS might assert that either the Existing Notes or the New Notes were not “securities” for U.S. federal income tax purposes, or the Exchange is otherwise not a tax-free recapitalization for U.S. federal income tax purposes. If the Exchange were to fail to qualify for treatment as a tax-free recapitalization, a holder of Existing Notes generally would recognize gain or loss for U.S. federal income tax purposes in an amount equal to the difference between the amount realized by such holder in the Exchange (other than any portion of such amount treated as attributable to accrued interest not previously included in income) and its adjusted tax basis in the Existing Notes exchanged. Holders are urged to consult their own tax advisors as to the amount and character of any gain or loss that might be recognized for U.S. federal income tax purposes if the Exchange were treated as a taxable exchange.

Regardless of whether the Exchange of Existing Notes for New Notes qualifies as a recapitalization, cash payments or New Notes received in respect of accrued and unpaid interest on the Existing Notes will be taxed as ordinary interest income to the extent not previously includible in income.

If a U.S. Holder receives cash in lieu of a fractional New Notes, the amount of such cash may be considered, in whole or in part, taxable gain or, alternatively, such U.S. Holder may be treated as having received such fractional New Notes and having had such note retired for cash. Holders are urged to consult their own tax advisors as to the amount and character of any gain or loss in respect of a fractional New Notes that might be recognized for U.S. federal income tax purposes.

Payment of Interest. Interest on a New Note generally will be included in the income of a U.S. Holder as ordinary interest income at the time it is accrued or is received in accordance with the U.S. Holder’s regular method of accounting for U.S. federal income tax purposes. It is expected, and this discussion assumes, that the New Notes will be issued without original issue discount for U.S. federal income tax purposes.

Treatment of New Notes. A U.S. Holder who acquires the New Notes at a premium (i.e., the excess of the holder’s adjusted tax basis over the note’s stated redemption price at maturity) generally may elect to amortize that premium (“amortizable bond premium”) from the purchase date to the New Notes’s maturity date under a constant yield method that reflects semiannual compounding based on the note’s payment period. Amortizable bond premium is treated as an offset to interest income on the New Notes and not as a separate deduction. The election to amortize bond premium, once made, applies to all debt obligations held or subsequently acquired by the electing U.S. Holder on or after the first day of the first taxable year to which the election applies and may not be revoked without the consent of the IRS. If such an election to amortize bond premium is not made, a U.S. Holder must include all amounts of taxable interest without reduction for such premium, and may receive a tax benefit from the premium only in computing such U.S. Holder’s gain or loss upon a disposition of the New Notes.

Sale, Exchange, or Retirement of the New Notes. Upon the sale, exchange, retirement, or other taxable disposition of the New Notes, a U.S. Holder will recognize gain or loss equal to the difference between the amount realized upon the sale, exchange, retirement, or other taxable disposition (other than amounts attributable to accrued but unpaid interest, which will be taxed as such) and the U.S. Holder’s adjusted tax basis in the New Notes. The amount realized by the holder will equal the amount of any cash and the fair market value of any other property received for the new note. A U.S. Holder’s adjusted tax basis in a New Note generally will be the cost of the New Note to such U.S. Holder. Gain or loss realized on the sale, exchange, retirement, or other taxable disposition of the New Notes generally will be capital gain or loss and will be long-term capital gain or loss if the New Note has been held for more than one year. Long term capital gains of non-corporate U.S. Holders are generally subject to preferential rates of U.S. federal income taxation. The deductibility of capital losses is subject to limitations under the Code. Any amount attributable to accrued but unpaid interest will be treated as a payment of interest and taxed in the manner described above under “— Payment of Interest.”

Additional Medicare Tax on Unearned Income. A tax of 3.8% is imposed on “net investment income” (or “undistributed net investment income”, in the case of estates and trusts) received by certain individuals, trusts and estates with adjusted gross income above certain threshold amounts. “Net investment income” as defined for United States federal Medicare contribution purposes generally includes interest payments on and gain recognized from the sale or other disposition of the New Notes not held in a trade or business, other than a trade or business that consists of certain passive or trading activities, reduced by permitted deductions properly allocable to the income or gain. U.S. Holders should consult their own tax advisors regarding the effect, if any, of this tax on their ownership and disposition of the New Notes.

A “Non-U.S. Holder” means a beneficial holder of Existing Notes or New Notes that is neither a U.S. Holder nor an entity or arrangement treated as a partnership for U.S. federal income tax purposes.

Payments of Interest. Subject to the discussions below concerning backup withholding and FATCA (as defined below), interest payments that are received from us or our agent generally will not be subject to U.S. federal income or withholding tax if:

A Non-U.S. Holder generally will satisfy the certification requirements if either: (1) the Non-U.S. Holder certifies to the applicable withholding agent, under penalties of perjury, that it is a non-United States person and provides its name, address and U.S. taxpayer identification number, if any (which certification may generally be made on an IRS Form W-8BEN or W-8BEN-E, or a successor form), or (2) a securities clearing organization, bank, or other financial institution that holds customer securities in the ordinary course of its trade or business (a “financial institution”) and holds the Notes certifies to the applicable withholding agent under penalties of perjury that it has received the required statement from the Non-U.S. Holder certifying that it is a non-United States person and furnishes the applicable withholding agent with a copy of the statement.

Except as described below under “— Effectively Connected Income,” a Non-U.S. Holder that does not qualify for exemption from withholding as described above generally will be subject to withholding of U.S. federal income tax at a rate of 30% on payments of interest on the Notes. Payments not meeting the requirements for the exemption set forth above and thus subject to withholding of U.S. federal income tax may nevertheless be exempt from withholding (or subject to withholding at a reduced rate) if the Non-U.S. Holder provides us with a properly executed IRS Form W-8BEN or W-8BEN-E (or successor form) claiming an exemption from, or reduction in, withholding under the benefit of a tax treaty and complies with any other applicable procedures. We will not pay any additional amounts to U.S. Holders or Non-U.S. Holders in respect of any amounts withheld under applicable law.

Sale, Exchange, or Retirement of the New Notes. Subject to the discussions below concerning backup withholding and FATCA, a Non- U.S. Holder generally will not be subject to U.S. federal income or withholding tax on any capital gain realized on the sale, exchange, retirement, or other taxable disposition of the New Notes unless (1) the gain is effectively connected with the conduct of a trade or business within the United States, or a permanent establishment maintained in the United States if certain tax treaties apply and (2) in the case of a Non-U.S. Holder that is an individual, the Non-U.S. Holder is present in the United States for 183 days or more in the taxable year of the sale, exchange, or other disposition of the Notes and certain other conditions are met. An individual Non-U.S. Holder who is present in the United States for 183 days or more in the taxable year of sale, exchange, or other disposition of a New Note, if certain other conditions are met, will be subject to U.S. federal income tax at a rate of 30% on the gain realized on the sale, exchange, or other taxable disposition of such New Note, subject to the reduction of such gain by such Non-U.S. Holder’s capital losses from U.S. sources. Any amounts which a Non-U.S. Holder receives on a sale, exchange, retirement or other taxable disposition of a New Note which are attributable to accrued but unpaid interest will be taxable as interest and subject to the rules described above under “— Payments of Interest.”

Effectively Connected Income. If a Non-U.S. Holder of a New Note is engaged in the conduct of a trade or business within the United States and if interest on a New Note, or gain realized on the sale, exchange, or other taxable disposition of the New Note, is effectively connected with the conduct of such trade or business (or, if certain tax treaties apply, is attributable to a permanent establishment maintained by the Non-U.S. Holder in the United States), the Non-U.S. Holder, although exempt from U.S. federal withholding tax (provided that the certification requirements discussed above are satisfied), generally will be subject to regular U.S. federal income tax on such interest or gain on a net income basis in the same manner as if it were a U.S. Holder (unless an applicable treaty provides otherwise). In addition, if any such Non-U.S. Holder is a foreign corporation, it may also be subject to a branch profits tax equal to 30% (or such lower rate provided by an applicable U.S. income tax treaty) of a portion of its earnings and profits for the taxable year that are effectively connected with its conduct of a trade or business in the United States, subject to certain adjustments.

In general, in the case of a U.S. Holder, other than certain exempt holders, we and other payors are required to report to the IRS all payments of principal and interest on the New Notes. In addition, we and other payors generally

are required to report to the IRS any payment of proceeds of the sale or other disposition of a New Note before maturity. Additionally, backup withholding generally will apply to any payments unless a U.S. Holder furnishes a correct taxpayer identification number (which for an individual is generally the individual’s Social Security Number) and certifies on an IRS Form W-9, under penalties of perjury, that the U.S. Holder is not subject to backup withholding and otherwise complies with applicable requirements of the backup withholding rules or such U.S. Holder otherwise establishes an exemption.

The amount of interest we pay to a Non-U.S. Holder on the New Notes generally will be reported to the Non-U.S. Holder and to the IRS annually even if the Non-U.S. Holder is exempt from the 30% withholding tax described above. Copies of the information returns reporting those payments and the amounts withheld may also be made available to the tax authorities in the country where the Non-U.S. Holder is resident under provisions of an applicable income tax treaty or agreement. In the case of a Non-U.S. Holder, backup withholding and certain other information reporting will not apply to payments made if the Non-U.S. Holder provided the required certification that it is not a United States person, or the Non-U.S. Holder otherwise establishes an exemption, provided that the payor or withholding agent does not have actual knowledge or reason to know that the holder is a United States person, or that the conditions of any exemption are not satisfied. Information reporting and, depending on the circumstances, backup withholding generally will apply to the proceeds of a disposition of the New Notes effected within the United States or through certain U.S.-related financial intermediaries by a Non-U.S. Holder, unless the Non-U.S. Holder certifies under penalties of perjury that it is not a United States person (and certain other conditions are met) or otherwise establishes an exemption from such requirements.

Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be allowed as a refund or a credit against a holder’s U.S. federal income tax liability and may entitle the holder to a refund, provided the required information is timely furnished to the IRS. Holders should consult their tax advisors concerning the application of information reporting and backup withholding rules.

Sections 1471 through 1474 of the Code and related Treasury guidance (collectively referred to as “FATCA”) generally impose U.S. federal withholding tax at a rate of 30% on payments to a certain “foreign financial institution” or a “non-financial foreign entity” (each as defined in the Code) of (i) U.S.-source interest (including interest paid on the New Notes) and (ii) the gross proceeds from the sale or other disposition of an obligation that produces U.S.-source interest (including a disposition of the New Notes), in each case, unless (1) the foreign financial institution undertakes certain diligence and reporting obligations, (2) the non-financial foreign entity either certifies it does not have any “substantial United States owners” (as defined in the Code) or furnishes identifying information regarding each substantial United States owner, or (3) the foreign financial institution or non-financial foreign entity otherwise qualifies for an exemption from these rules. If the payee is a foreign financial institution and is subject to the diligence and reporting requirements in (1) above, it must enter into an agreement with the U.S. Department of the Treasury requiring, among other things, that it undertake to identify accounts held by certain “specified United States persons” or “United States owned foreign entities” (each as defined in the Code), annually report certain information about such accounts, and withhold 30% on certain payments to non-compliant foreign financial institutions and certain other account holders. This 30% U.S. federal withholding tax would generally apply in the case of debt obligations held through intermediaries that do not satisfy such information reporting requirements. Accordingly, the entity through which a U.S. Holder or a Non-U.S. Holder holds its New Notes will affect the determination of whether such withholding is required. We will not pay any additional amounts to U.S. Holders or Non-U.S. Holders in respect of any amounts withheld under FATCA. Foreign entities located in jurisdictions that have entered into an intergovernmental agreement with the U.S. governing FATCA may be subject to different rules.

The Treasury Secretary has issued proposed Treasury Regulations, which, if finalized in their present form, would eliminate withholding under FATCA with respect to payment of gross proceeds from a sale or other disposition of our securities. In its preamble to such proposed Treasury Regulations, the U.S. Treasury stated that taxpayers may generally rely on the proposed Treasury Regulations until final regulations are issued. An intergovernmental agreement between the United States and an applicable foreign country may modify the requirements described in this section. Under certain circumstances, a holder may be eligible for refunds or credits of the tax. Holders should consult their own tax advisors regarding the possible implications of FATCA on their investment in the New Notes

THE U.S. FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A HOLDER’S

PARTICULAR SITUATION. YOU SHOULD CONSULT YOUR TAX ADVISORS WITH RESPECT TO THE TAX CONSEQUENCES TO YOU OF THE EXCHANGE OF THE EXISTING NOTES AND ACQUISITION, OWNERSHIP AND DISPOSITION OF THE NEW NOTES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, FOREIGN AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN U.S. FEDERAL OR OTHER TAX LAWS.

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our consolidated financial statements, related notes and other financial information appearing elsewhere in this Prospectus.

Certain statements contained in this Prospectus, which are not statements of historical fact, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, as Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements give current expectations or forecasts of future events or our future financial or operating performance. Words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “seek” and similar terms and phrases, or the negative thereof, may be used to identify forward-looking statements.

The forward-looking statements contained in this Prospectus are based on management’s good-faith belief and reasonable judgment based on current information. The forward-looking statements are qualified by important factors, risks and uncertainties, many of which are beyond our control, that could cause our actual results to differ materially from those in the forward-looking statements, including those described in our Risk Factors appearing elsewhere in this Prospectus. Any forward-looking statement made by us in this Prospectus speaks only as of the date hereof or as of the date specified herein. 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 any applicable laws or regulations.

We are an insurance holding company that markets and services our product offerings through specialty commercial and specialty personal insurance business lines. Our growth has been significant since our founding in 2009. Currently, we are authorized to write insurance as an excess and surplus lines carrier in 45 states, including the District of Columbia. We are licensed to write insurance as an admitted carrier in 42 states, including the District of Columbia, and we offer our insurance products in all 50 states.

Our revenues are primarily derived from premiums earned from our insurance operations. We also generate other revenues through investment income and other income which mainly consists of: installment fees and policy issuance fees generally related to the policies we write.

Our expenses consist primarily of losses and loss adjustment expenses, agents’ commissions, and other underwriting and administrative expenses. We organize our operations in three insurance businesses: commercial insurance lines, personal lines, and agency business. Together, the commercial and personal lines refer to “underwriting” operations that take insurance risk, and the agency business refers to non-risk insurance business.

Through our commercial insurance lines, we offer coverage for both commercial property and commercial liability. We also offer coverage for commercial automobiles and workers’ compensation. Our insurance policies are sold to targeted small and mid-sized businesses on a single or multiple-coverage basis.

Through our personal insurance lines, we offer homeowners insurance and dwelling fire insurance products to individuals in several states. Our specialty homeowners insurance product line is primarily comprised of low-value dwelling insurance tailored for owners of lower valued homes, which we offer in Illinois, Indiana and Texas.

Through our wholesale agency business segment, we offer commercial and personal lines insurance products for our Insurance Company Subsidiaries as well as a small number of third-party insurers. The wholesale agency business segment provides our agents with more insurance product options.

The Company reported $36.2 million of gross written premiums in the first quarter of 2023, representing a 9.9% increase as compared to the same period in 2022. Our commercial lines gross written premiums increased by $389,000, or 1.4%, to $29.0 million in the first quarter of 2023, compared to $28.6 million for the same period in 2022. Personal lines gross written premiums increased by $2.9 million, or 65.3%, to $7.2 million in the first quarter of 2023, compared to $4.4 million for the same period in 2022.

The Company reported net income of $1.0 million, or $0.08 per share, for the three months ended March 31, 2023. The Company reported a net loss of $2.9 million, or $0.30 per share, for the three months ended March 31, 2022.

Adjusted operating income and adjusted operating income per share are non-GAAP measures that represent net income allocable to common shareholders excluding net realized investment gains or losses, other gains or losses, and changes in fair value of equity securities; all net of tax. Adjusted operating income, a non-GAAP measure, was $307,000, or $0.03 per share, for the three months ended March 31, 2023. Adjusted operating loss was $3.1 million, or $0.32 per share, for the three months ended March 31, 2022.

Our underwriting combined ratio was 99.5% for the three months ended March 31, 2023, compared to 112.5% for the same period in 2022. The loss ratio decreased 12.8% to 62.2% for the three months ended March 31, 2023, compared to 75.0% for the same period in 2022.

Premiums are earned ratably over the term of the policy, whereas written premiums are reflected on the effective date of the policy. Almost all commercial lines and homeowners products have annual policies, under which premiums are earned evenly over one year. The resulting net earned premiums are impacted by the gross and ceded written premiums, earned ratably over the terms of the policies.

Our premiums are presented below for the years ended December 31, 2022 and 2021 (dollars in thousands):

Gross written premiums increased by $5.9 million, or 4.5%, to $138.0 million, for the year ended December 31, 2022, compared to $132.1 million for the year ended December 31, 2021. The increase was attributable to an increase in written premium in our small business and low-value dwelling programs, which was offset by a decrease in written premium in our hospitality programs. Increases in the personal lines business was primarily attributable to an increase in policies, but also due to increases in rates.

Commercial lines gross written premiums decreased $207,000, or 0.2%, to $116.9 million, for the year ended December 31, 2022, compared to $117.1 million for the year ended December 31, 2021. Gross written premiums for our small business programs increased by $4.5 million, or 5.3%, to $89.9 million, for the year ended December 31, 2022, compared to $85.4 million for the year ended December 31, 2021. This increase was offset by our hospitality programs gross written premiums, which decreased by $4.7 million, or 14.9%, to $27.0 million, for the year ended December 31, 2022, compared to $31.7 million for the year ended December 31, 2021.

Personal lines gross written premiums increased $6.1 million, or 40.8%, to $21.1 million, for the year ended December 31, 2022, compared to $15.0 million for the year ended December 31, 2021. This increase was largely driven by our low-value dwelling business.

Net written premiums decreased $10.2 million, or 10.1%, to $91.2 million, for the year ended December 31, 2022, compared to $101.4 million for the year ended December 31, 2021. The Company entered into new specific loss reinsurance treaties on December 31, 2021 and January 1, 2022, which included a 40% ceding commission. This increased ceded written premiums by approximately $11.4 million in 2022. There was no ceding commission on excess of loss treaties during 2021. Ceded earned premiums also increased due to the new treaties by $8.9 million. The increase in ceded earned premiums was offset by the same increase in ceding commissions, which reduced acquisition costs.

Other income consists primarily of fees charged to policyholders by the Company for services outside of the premium charge, such as installment billings and policy issuance costs. Other income also includes the interest income from the $6.0 million and $3.0 million promissory notes relating to the transaction on June 30, 2021, by

Sycamore Insurance Agency, Inc. (“Sycamore”) to Venture Agency Holdings, Inc., a related party, of the sale of its customer accounts and other related assets of some of its personal and commercial lines of business (the “Venture Transaction”). The purchase price was $10.0 million of which $1.0 million was paid in cash on June 30, 2021, and $9.0 million was in the form of two promissory notes (one for $6.0 million and one for $3.0 million). The $3.0 million promissory note was paid down by Venture on December 14, 2021, and $5.0 million of the $6.0 million promissory note was paid down by Venture on October 20, 2022. Commission income is also received by the Company’s insurance agency for writing policies for third-party insurance companies. All of the third-party business was sold to Venture at June 30, 2021. Accordingly, other income from that business diminished in 2022 as that business transitioned to Venture.

Other income increased by $97,000, or 3.6%, to $2.8 million for the year ended December 31, 2022, compared to $2.7 million for the year ended December 31, 2021. Other income relating to installment billings and policy issuance costs was lower in 2022 because of the Venture Transaction. This was offset by the interest income received from the $6.0 million promissory note during 2022.

The tables below detail our losses and LAE and loss ratios for the years ended December 31, 2022 and 2021 (dollars in thousands).

Net losses and LAE increased by $11.5 million, or 16.6%, to $81.4 million for the year ended December 31, 2022, compared to $69.9 million for the year ended December 31, 2021. The calendar year loss ratios were 83.9% and 70.5% for the years ended December 31, 2022 and 2021, respectively.

The Company experienced $24.3 million of adverse development for the year ended December 31, 2022. Of the $24.3 million of adverse development, $23.9 million was related to the Company's commercial lines of business, while $406,000 was related to the Company's personal lines of business. Of the $24.3 million of adverse development, $1.8 million was related to the 2021 accident year, $4.0 million was related to the 2020 accident year, $9.6 million was related to the 2019 accident year, $5.2 million was related to the 2018 accident year, and $3.7 million was related to 2017 and prior accident years. The adverse development was mostly related to the Company's commercial liability lines and was driven by multiple factors including significant social inflation generating higher severity than historical experience, and longer tail exposure than anticipated, particularly in certain jurisdictions.

The $19.4 million of adverse development in 2021 consisted of $18.5 million from commercial lines and $957,000 from personal lines and mostly related to the 2019 and prior accident years.

Our expense ratio is a measure of the efficiency and performance of the commercial and personal lines of business (our risk-bearing underwriting operations). It is calculated by dividing the sum of policy acquisition costs and other underwriting expenses by the sum of net earned premiums and other income of the underwriting business. Costs that cannot be readily identifiable as a direct cost of a segment or product line remain in “Corporate” for segment reporting purposes. The expense ratio excludes wholesale agency and “Corporate” expenses.

The table below provides the expense ratio by major component:

Our expense ratio decreased by 4.0% to 38.4% for the year ended December 31, 2022, as compared to the same period in 2021. The decrease was largely due to a reduction in policy acquisition costs attributable to $11.4 million of ceding commission from new excess of loss reinsurance treaties. There were no commissions on excess of loss treaties in 2021.

Policy acquisition costs are costs we incur to issue policies, which include commissions, premium taxes, underwriting reports and underwriter compensation costs. The Company offsets direct commissions with ceded commissions from reinsurers. The percentage of policy acquisition costs to net earned premiums and other income decreased by 6.3%, from 29.3% in 2021, to 23.0% in 2022, mostly due to the new ceding commission mentioned above.

Operating expenses consist primarily of employee compensation, information technology and occupancy costs, such as rent and utilities. Operating expenses as a percent of net earned premiums and other income increased by 2.3%, from 13.1% in 2021, to 15.4% in 2022. The new excess of loss reinsurance treaties with the ceding commission drove net earned premiums lower, resulting in a slightly higher operating expense ratio.

We measure the performance of our consolidated results, in part, based on our underwriting gain or loss. The following table provides the underwriting gain or loss for the years ended December 31, 2022 and 2021 (dollars in thousands):

Net investment income increased by $1.0 million, or 54.6%, to $3.0 million for the year ended December 31, 2022, compared to $2.0 million for the year ended December 31, 2021. This increase was due to an increase in interest income in our debt securities due to higher interest rates in 2022. Average invested assets during 2022 were $160.1 million compared to $183.0 million for the same period in 2021. The investment portfolio was comprised of 81.2% debt securities, 3.5% equity securities, and 15.3% short-term investments as of December 31, 2022. The investment portfolio was comprised of 82.5% debt securities, 7.6% equity securities, and 9.9% short-term investments as of December 31, 2021.

The debt securities portfolio had an average credit quality was AA+ and AA at December 31, 2022 and 2021, respectively. The portfolio produced a tax-equivalent book yield of 2.3% and 1.4% for the years ended December 31, 2022 and 2021, respectively. The option adjusted duration of the debt securities portfolio was 3.5 years and 3.6 years at December 31, 2022 and 2021, respectively.

Net realized investment losses were $1.5 million during 2022, compared to $2.9 million of investment gains in 2021. The $4.4 million decrease was due to the Company repositioning its equity portfolio as well as negative overall market conditions that were experienced during 2022.

Interest expense was $2.9 million for the years ended December 31, 2022 and 2021. We issued $25.3 million of public senior unsecured notes (the “Notes”) in 2018. The Company did not repurchase any of the Notes in 2022 and 2021. Interest expense includes the amortization of debt issuance costs relating to the Notes which is $260,000 per annum over the 5-year life of the Notes. The interest expense relating to the amortization of debt issuance costs for the existing $10.5 million of the Subordinated Notes is $51,000 per annum over the 20-year life of the Subordinated Notes.

The Company had a $10.0 million line of credit during 2022 and 2021, which it drew upon and paid down at various times. This contributed to the interest expense in 2022 and 2021. The Company had no outstanding balance on its line of credit on December 31, 2022, as the line of credit agreement matured on December 1, 2022. The line of credit agreement was not renewed with the Lender after it matured on December 1, 2022.

For the year ended December 31, 2022, the Company reported $6,000 of current federal income tax expense and $39,000 of current state income tax expense. The Company reported a deferred tax benefit of $9.4 million and $0 for the years ended December 31, 2022 and 2021, respectively.

There is a $21.7 million valuation allowance against 100% of the net deferred tax assets at December 31, 2022, which would increase book value by $1.77 per share if reversed in the future. The valuation allowance was $14.6 million as of December 31, 2021. As of December 31, 2022, the Company has net operating loss carryforwards for federal income tax purposes of $65.6 million, of which $50.4 million expire in tax years 2030 through 2042 and $15.2 million never expire. Of this amount, $7.6 million are limited in the amount that can be utilized in any one year and may expire before they are realized under Section 382 of the Internal Revenue Code. The Company has state net operating loss carryforwards of $107.2 million, which expire in tax years 2023 through 2042.

The following table summarizes our operating results for the periods indicated (dollars in thousands):

Premiums are earned ratably over the term of the policy, whereas written premiums are reflected on the effective date of the policy. Almost all commercial lines and homeowners products have annual policies, under which premiums are earned evenly over one year. The resulting net earned premiums are impacted by the gross and ceded written premiums, earned ratably over the terms of the policies.

Our premiums are presented below for the three months ended March 31, 2023 and 2022 (dollars in thousands):