Case CSS Doc 252 Filed 01/26/16 Page 1 of 15

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1 Case CSS Doc 252 Filed 01/26/16 Page 1 of 15 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE ) Chapter 11 In re: ) ) Case No (CSS) AFFIRMATIVE INSURANCE ) HOLDINGS, INC., et al., 1 ) (Jointly Administered) ) Debtors. ) Objection Deadline: February 17, 2016 at 4:00 p.m. (ET) ) Hearing Date: Only if an objection is filed THIRD MONTHLY FEE APPLICATION OF BDO USA, LLP FOR COMPENSATION AND REIMBURSEMENT OF EXPENSES AS FINANCIAL ADVISOR FOR THE DEBTORS FOR THE PERIOD FROM DECEMBER 1, 2015 THROUGH DECEMBER 31, 2015 Name of Applicant: BDO USA, LLP Authorized To Provide Professional Services to: Debtors Date of Retention: nunc pro tunc to October 14, 2015 Period for which Compensation and Reimbursement is Sought: December 1, 2015 December 31, 2015 Amount of Compensation Sought as actual, reasonable and necessary: $52, Amount of Expense Reimbursement sought as actual, reasonable and necessary: $68.45 This is a: X monthly interim final application 1 The Debtors, together with the last four digits of each Debtor s federal tax identification number, are: Affirmative Insurance Holdings, Inc. (0432); Affirmative Management Services, Inc. (7252); Affirmative Services, Inc. (7255); Affirmative Underwriting Services, Inc. (7250); Affirmative Insurance Services, Inc. (8823); Affirmative General Agency, Inc. (2345); Affirmative Insurance Group, Inc. (7246); and Affirmative, L.L.C. (2347). The location of the Debtors corporate headquarters and the service address for all Debtors is 150 Harvester Drive, Suite 250, Burr Ridge, Illinois

2 Case CSS Doc 252 Filed 01/26/16 Page 2 of 15 If this is not the first application filed, disclose the following for each prior application: Requested Paid # Date Filed Period Covered Fees Expenses Fees Expense 1 11/25/15 10/14/15 10/31/15 $18, $0.00 $0.00 $ /21/15 11/01/15 11/30/15 38, , TOTAL: $57, $1, $0.00 $0.00 COMPENSATION BY PROFESSIONAL WITH BLENDED RATE Professional Position Hours Hourly billing rate (average) 2 Amount DAVID E BERLINER PARTNER , CHRIS CREGER MANAGER , ALEXIS D'AVERSA STAFF , ALEX HSU STAFF , TOTAL: $52, Blended Rate: $ COMPENSATION BY PROJECT CATEGORY Project Category Total Hours Amount TAX ISSUES MEETINGS - DEBTOR , MONTHLY OPERATING REPORT BUSINESS ANALYSIS SOFA/SOAL ANALYSIS , COUNSEL DISCUSSIONS & COURT HEARINGS 8.2 3, FEE APPLICATIONS / MONTHLY STATEMENTS 2.9 1, TOTAL: $52, These rates are BDO s standard hourly rates for accounting and consulting services. All hourly rates are adjusted by BDO on a periodic basis. Non-working travel time is billed at ½ of the standard hourly billing rate and is reflected in the total fees billed -2-

3 Case CSS Doc 252 Filed 01/26/16 Page 3 of 15 EXPENSE SUMMARY Expense Category Total Expenses Internet Connection $9.21 Out-of-Town Travel $59.24 Local Meals Local Travel TOTAL $

4 Case CSS Doc 252 Filed 01/26/16 Page 4 of 15 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE ) Chapter 11 In re: ) ) Case No (CSS) AFFIRMATIVE INSURANCE ) HOLDINGS, INC., et al., 1 ) (Jointly Administered) ) Debtors. ) Objection Deadline: ) Hearing Date: Only if an objection is filed THIRD MONTHLY FEE APPLICATION OF BDO USA, LLP FOR COMPENSATION AND REIMBURSEMENT OF EXPENSES AS FINANCIAL ADVISOR FOR THE DEBTORS FOR THE PERIOD FROM DECEMBER 1, 2015 THROUGH DECEMBER 31, 2015 BDO USA, LLP (together with its wholly owned subsidiaries, agents, independent contractors and employees, BDO ) hereby submits it s Third Monthly Application for Compensation and Reimbursement of Expenses as Financial Advisor for the debtors and debtors in possession (the Debtors ) in the above captioned chapter 11 cases for the period from December 1, 2015 through December 31, 2015 (the Application ). BDO respectfully represents: I. INTRODUCTORY STATEMENT 1. BDO s Business Restructuring Services practice ( BRS ) is a national team of responsive professionals, experienced in all aspects of loan workouts, restructuring and bankruptcy. BRS has extensive experience representing trustees, debtors and virtually all classes of creditors and equity holders in both out-of-court and in-court workouts and restructurings. 1 The Debtors, together with the last four digits of each Debtor s federal tax identification number, are: Affirmative Insurance Holdings, Inc. (0432); Affirmative Management Services, Inc. (7252); Affirmative Services, Inc. (7255); Affirmative Underwriting Services, Inc. (7250); Affirmative Insurance Services, Inc. (8823); Affirmative General Agency, Inc. (2345); Affirmative Insurance Group, Inc. (7246); and Affirmative, L.L.C. (2347). The location of the Debtors corporate headquarters and the service address for all Debtors is 150 Harvester Drive, Suite 250, Burr Ridge, Illinois

5 Case CSS Doc 252 Filed 01/26/16 Page 5 of 15 BRS has developed the methodologies, resources and expertise required for operational and financial restructuring, due diligence and financial analysis, pre-and post-bankruptcy planning and case administration, settlement and portfolio valuations, and investigative accounting. 2. On October 14, 2015 (the Petition Date ), each of the Debtors filed a voluntary petition for relief under chapter 11 of the Bankruptcy Code. 3. The Debtors continue to operate their businesses and manage their properties as debtors in possession pursuant to Bankruptcy Code sections 1107(a) and No trustee or examiner has been appointed in these chapter 11 cases. 4. On October 30, 2015, the Office of the United States Trustee (the U.S. Trustee ) appointed a five (5) member Official Committee of Unsecured Creditors (the Committee ) pursuant to Section 1102(a)(1) of the Bankruptcy Code [Docket No. 78]. The members of the Committee are: (i) Alesco Preferred Funding X, Ltd.; (ii) Alesco Preferred Funding VI, Ltd.; (iii) Trapeza CDO IX, Ltd.; (iv) Trapeza Edge CDO, Ltd.; and (v) The Bank of New York Mellon Trust Co., NA. 5. On October 26, 2015, the Debtors filed an Application for an Order Authorizing the Debtors to Retain BDO USA, LLP as Financial Advisor Nunc Pro Tunc to the Petition Date (the Retention Application ) [Docket No. 68] in accordance with the terms and conditions set forth in the engagement letter dated October 6, 2015, between BDO and the Debtors (the Engagement Letter ). On November 18, 2015, the Court entered an order authorizing the retention of BDO nunc pro tunc to the Petition Date (the Retention Order ) [Docket No. 114]. 6. This is BDO s Third Monthly Application for Compensation for professional services rendered and for reimbursement of actual and necessary costs and expenses incurred on behalf of the Debtors. BDO makes this Application pursuant to sections 328(a), 330 and 1103(a) -2-

6 Case CSS Doc 252 Filed 01/26/16 Page 6 of 15 of title 11 of the United States Code (the Bankruptcy Code ), Rules 2014(a) and 2016 (b) of the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules ), and Rule of the Local Rules of the United States Bankruptcy Court for the District of Delaware (the Local Rules ) and the Order Establishing Procedures for Interim Compensation and Reimbursement of Expenses of Professionals entered November 18, 2015 (the Interim Compensation Procedures ) [Docket No. 115], and any additional orders entered by the Court. 7. Detailed statements itemizing services rendered and expenses incurred by BDO are annexed hereto as Exhibits A through C and incorporated herein by reference. II. SUMMARY OF SERVICES RENDERED 8. By this Application, BDO seeks interim allowance for (a) compensation for services rendered from December 1, 2015 through December 31, 2015 (the Application Period ) in the total amount of $52, and (b) reimbursement for certain expenses incurred during the same period in the amount of $68.45, all as more fully set forth in the Application. Pursuant to the Interim Compensation Procedures, if no objections are filed to this Application within the period required, the Debtors are authorized to pay BDO 80% of requested fees and 100% of requested expenses after a Certificate of No Objection is filed with the Court. The Debtors paid BDO a prepetition retainer in the amount of $50, (the Retainer ) 2. This Application complies with the Bankruptcy Code, the Bankruptcy Rules, the Local Rules and the Interim Compensation Procedures. 9. BDO customarily bills their professionals at standard hourly rates commensurate with the experience of the person performing such services. 2 Unapplied Retainer balance will be held and applied for payment of any additional amounts owed to BDO during these chapter 11 cases. -3-

7 Case CSS Doc 252 Filed 01/26/16 Page 7 of During the period from December 1, 2015 through December 31, 2015, BDO provided services of a general nature to the Debtors, as set forth below: HOURS AMOUNT A. TAX ISSUES Analysis of potential priority tax claims B. MEETINGS - DEBTOR , Meetings with Debtor management to discuss planning and preparation of SOFAs/SOALs, Monthly Operating Reports and other case issues. C. MONTHLY OPERATING REPORT Worked with Debtor management and counsel to begin preparation of the monthly operating report. D. BUSINESS ANALYSIS Calls and s with UCC Financial Advisor regarding questions or information needed. E. SOFA/SOAL ANALYSIS , Preparation of SOFA / SOAL documents, schedules and exhibits, including preparation of supporting schedules. F. COUNSEL DISCUSSIONS & COURT HEARINGS 8.2 3, Telephone calls and meetings with counsel regarding preparation of SOFA/SOALs, Monthly Operating Reports or other case issues. G. FEE APPLICATIONS / MONTHLY STATEMENTS 2.9 1, Preparation and review of monthly data for first monthly fee application. TOTAL: $52,

8 Case CSS Doc 252 Filed 01/26/16 Page 8 of 15 III. COMPENSATION STANDARDS 11. Section 330(a)(3) of the Bankruptcy Code identifies factors that should be considered when determining the amount of reasonable compensation. These factors are: A. the time spent on such services; B. the rates charged for such services; C. whether the services were necessary to the administration of, or beneficial at the time at which the service was rendered toward the completion of, a case under this title; D. whether the services were performed within a reasonable amount of time commensurate with the complexity, importance, and nature of the problem, issue, or task addressed; E. with respect to a professional person, whether the person is board certified or otherwise has demonstrated skill and experience in the bankruptcy field; and F. whether the compensation is reasonable based on customary compensation charged by comparably skilled practitioner in cases other than cases under this title. A. Time Spent 12. The size and complexity of the Debtors cases as well as the numerous and complex issues required substantial broad-based accounting and financial advisory expertise to resolve the issues. As a consequence, the demands of this case have been such that BDO s highly skilled insolvency professionals have devoted substantial time and effort to perform properly and expeditiously the required accounting and advisory work. 13. In the period covered by the Application, BDO professionals spent hours performing services for the Debtors or for the benefit of the Debtors and their estates. 14. BDO s time records are recorded contemporaneously with the rendition of professional services. Exhibit B attached hereto contains a full and complete description of the services rendered by each partner, managing director, director, senior manager, manager, senior, and staff on a daily basis for the Application Period. BDO s time records are maintained in onetenth of an hour (0.10) increments. -5-

9 Case CSS Doc 252 Filed 01/26/16 Page 9 of 15 B. Rates Charged 15. BDO customarily bills their professionals at rates commensurate with the experience of the person performing such services. The billing rates are the same for bankruptcy engagements as they are for all other accounting and advisory work performed by BDO. A detailed summary of rates by professional and title held is attached hereto as Exhibit A and incorporated herein by reference. The normal hourly rates 3 as of the date of the BDO s Retention Application are as follows, but subject to change in the ordinary course of BDO s business: Partners/Managing Directors $550-$795 per hour Directors/Senior Managers $350-$550 per hour Managers/Seniors $250-$350 per hour Associates 4 $175-$250 per hour 16. Each duty and task performed by BDO has been performed by the professional most qualified to render such services at his or her ordinary hourly charges. 17. BDO s professionals have delegated authority where appropriate to prevent duplication of effort, to ensure that associates were used whenever possible and to utilize the services of professionals who bill at lower hourly rates as much as possible. 18. Where more than one person attended a meeting, such attendance was not a duplication of effort, but was necessary to adequately represent the interests of the Debtors, and to have the appropriate expertise available. 3 In the normal course of business BDO revises its standard hourly rates to reflect changes in responsibilities, increased experience, and increased costs of doing business. BDO will advise the Debtors and the United States Trustee of any increases in its hourly rates over and above the rates disclosed herein. 4 BDO represents that this category does not include secretarial time or secretarial overtime, and BDO will not include in its applications any fees associated with secretarial work or secretarial overtime. -6-

10 Case CSS Doc 252 Filed 01/26/16 Page 10 of 15 C. Beneficial at the Time at Which the Service was Rendered 19. The services BDO performed were the actual and necessary cost of the administration of the Debtors estates and necessary to have enabled the case to proceed. D. Performed in a Reasonable Amount of Time and at Reasonable Cost 20. BDO is a nationally recognized consulting and financial advisory firm and was selected by the Debtors for its ability to provide the required services in a timely fashion and at reasonable cost. In this case, the time frames were often short and required substantial effort by BDO professionals to resolve complex issues in a timely manner. 21. The services in this case were performed in a reasonable amount of time given the complex nature of the issues. E. BDO s Professionals 22. BDO s professionals have a variety of certifications and have demonstrated outstanding abilities in the restructuring and advisory fields. F. Fees Outside of Bankruptcy 23. BDO charges the same rates both within and outside of the bankruptcy context. BDO s rates are commensurate with other firms of comparable skill. G. Other Compensation Issues 24. Further, section 330(a)(6) provides Any compensation awarded for the preparation of a fee application shall be based on the level and skill reasonably required to prepare the application. 25. During the period covered by this Application, BDO incurred 2.9 hours and $1, in fees in the preparation of monthly or interim fee applications and related data. -7-

11 Case CSS Doc 252 Filed 01/26/16 Page 11 of There is no agreement or understanding between BDO and any other person, other than the members, associates and employees of BDO, for the sharing of compensation received for services rendered in connection with these cases. IV. CONCLUSION 27. For all of the reasons set forth in this application, BDO respectfully submits that the services it has rendered and the disbursements it has incurred on behalf of the Debtors during these cases have been reasonably expended in order to adequately represent and protect the interests of the Debtors in these cases. BDO submits further that it has provided such services in an economical and efficient manner. Accordingly, BDO requests that the relief requested in this Application be granted in all respects. [This section left intentionally blank] -8-

12 Case CSS Doc 252 Filed 01/26/16 Page 12 of 15 WHEREFORE, BDO RESPECTFULLY REQUESTS that this Court approve the Application, pursuant to sections 330 and 33I of the Bankruptcy Code, granting BDO monthly compensation for professional services rendered in the amount of$52,163.50, 80% ofwhich is to be paid upon the filing of a certificate of no objection, and the sum of $68.45 for reimbursement of actual and necessary costs expended as financial advisor for the Debtors for the period from December I, 20I5 through December 3I, DATED this ~'~ Day of January 20I6 BDOUSA, LLP By: U ~ DAVID E. BERLINER I 00 Park A venue New York, NY Tel: (212) Fax: (212) Financial Advisor for the Debtors Sworn and syl)scribed to before me this OJ/i~ 1-day of January 20I6 ~tilt, Notary Public -9-

13 Case CSS Doc 252 Filed 01/26/16 Page 13 of 15 BDO USA, LLP 100 Park Avenue New York, N.Y Tel: (212) Fax: (212) Financial Advisor for the Debtors IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: AFFIRMATIVE INSURANCE HOLDINGS, INC., et al., 1 Debtors. Chapter 11 Case No (CSS) (Jointly Administered) DECLARATION OF DAVID E. BERLINER IN SUPPORT OF THIRD MONTHLY APPLICATION OF BDO USA, LLP, AS FINANCIAL ADVISOR FOR THE DEBTORS FOR INTERIM COMPENSATION FOR SERVICES RENDERED AND REIMBURSEMENT OF EXPENSES FOR THE PERIOD DECEMBER 1, 2015 THROUGH DECEMBER 31, 2015 STATE OF NEW YORK } }SS: COUNTY OF NEW YORK } I, DAVID E. BERLINER, declare under the penalty of perjury as follows: 1. I am a partner in the firm of BDO USA, LLP ( BDO ) and Managing Partner of BDO s New York Business Restructuring Services practice. 2. I have reviewed BDO s Third Monthly Application for Compensation and Reimbursement of Expenses of BDO USA as Financial Advisor for the debtors and debtors in possession (the Debtors ) in the above captioned chapter 11 cases (the 1 The Debtors, together with the last four digits of each Debtor s federal tax identification number, are: Affirmative Insurance Holdings, Inc. (0432); Affirmative Management Services, Inc. (7252); Affirmative Services, Inc. (7255); Affirmative Underwriting Services, Inc. (7250); Affirmative Insurance Services, Inc. (8823); Affirmative General Agency, Inc. (2345); Affirmative Insurance Group, Inc. (7246); and Affirmative, L.L.C. (2347). The location of the Debtors corporate headquarters and the service address for all Debtors is 150 Harvester Drive, Suite 250, Burr Ridge, Illinois

14 Case CSS Doc 252 Filed 01/26/16 Page 14 of 15 Application ) for the period December 1, 2015 to December 31, 2015 (the Application Period ) and this affidavit is submitted in support of the Application. 3. I have reviewed Delaware Bankruptcy Local Rule and submit that the Application substantially complies with such Rule. 4. To the best of my knowledge, information and belief formed after reasonable inquiry, the Application complies with the United States Trustees Guidelines issued March 22, 1995, by the U.S. Department of Justice (the UST Guidelines ). 5. In providing a reimbursable service, BDO does not make a profit on that service. 6. In charging for a particular service, BDO does not include the amortization of the cost of any investment equipment or capital outlay. 7. In seeking reimbursement for third party services, BDO requests reimbursement only for the amount billed to BDO by the third-party. 8. To the best of my knowledge, information and belief formed after reasonable inquiry, the fees and disbursements sought fall within the UST Guidelines, except as specifically noted herein and in the application and except to the extent that fees or disbursements sought are prohibited by the UST Guidelines. The fees and disbursements sought are billed at rates and in accordance with practices customarily employed by BDO and generally accepted by BDO s clients. 9. A summary of the fees and expenses incurred by BDO in these chapter 11 cases, during the Application Period as well as copies of the records maintained in the ordinary course of business by BDO are provided in Exhibits A through C annexed to the Application. -2-

15 Case CSS Doc 252 Filed 01/26/16 Page 15 of The following is a summary of the total fees and expenses incurred by BDO during the Application Period: FEES EXPENSES TOTAL $52, $52, BDO has received from, or on behalf of, the Debtors $0.00 for reimbursement of fees and expenses during these chapter 11 cases as financial advisor for the Debtors. The Debtors paid BDO a prepetition retainer in the amount of $50,000.00, payment will be applied. from the Ret~er to amounts requested herein upon approval of the ~olllf. None of the compensation to be paid to BDO, from or on behalf of the Debtors, will be divided or shared with any other person other than the members, associates and employees ofbdo. 12. I declare under penalty of peljury that the foregoing is true and correct. Executed on January ~ ' 2016 at New York, NY Sworn and s~ribed to before me this ~' day o anuary 2016 ' DAVID E. BERLINER 2 Unapplied Retainer balance will be held and applied for payment of any additional amounts owed to BOO during these chapter 11 cases. -3-

16 Case CSS Doc Filed 01/26/16 Page 1 of 2 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE ) In re: ) Chapter 11 ) AFFIRMATIVE INSURANCE HOLDINGS, INC., et al., 1 ) ) Case No (CSS) ) Debtors. ) (Jointly Administered) ) ) ) Objection Deadline: February 17, 2016 at 4:00 p.m. (ET) Hearing Date: Only if an objection is filed NOTICE OF APPLICATION PLEASE TAKE NOTICE that BDO USA, LLP, financial advisor to Affirmative Insurance Holdings, Inc., and certain of its wholly-owned direct and indirect subsidiaries, as debtors and debtors-in-possession (collectively, the Debtors ), has filed its Third Monthly Fee Application for Compensation and Reimbursement of Expenses as Financial Advisor for the Debtors for the Period from December 1, 2015 to December 31, 2015 (the Application ) with the United States Bankruptcy Court for the District of Delaware (the Bankruptcy Court ), 824 Market Street, Wilmington, Delaware PLEASE TAKE FURTHER NOTICE that any responses or objections to the Application must be filed with the Bankruptcy Court in accordance with the local rules and the Order Pursuant to Bankruptcy Code Sections 105(a) and 331 Establishing Interim Compensation Procedures [Docket No. 115] (the Order ) and served upon so as to be received by the 1 The Debtors, together with the last four digits of each Debtor s federal tax identification number, are: Affirmative Insurance Holdings, Inc. (0432); Affirmative Management Services, Inc. (7252); Affirmative Services, Inc. (7255); Affirmative Underwriting Services, Inc. (7250); Affirmative Insurance Services, Inc. (8823); Affirmative General Agency, Inc. (2345); Affirmative Insurance Group, Inc. (7246); and Affirmative, L.L.C. (2347). The location of the Debtors corporate headquarters and the service address for all Debtors is 150 Harvester Drive, Suite 250, Burr Ridge, Illinois

17 Case CSS Doc Filed 01/26/16 Page 2 of 2 undersigned counsel on or before February 17, 2016 at 4:00 p.m. (Eastern Time) (the Objection Deadline ). PLEASE TAKE FURTHER NOTICE that if any responses or objections to the Application are timely filed, served and received, a hearing on the Application will be held at a date and time convenient to the Bankruptcy Court. Only those objections made in writing and timely filed and received in accordance with the Order and the procedures set forth herein will be considered by the Bankruptcy Court at such hearing. IF YOU FAIL TO RESPOND IN ACCORDANCE WITH THIS NOTICE, THE APPLICATION WILL BE DEEMED APPROVED AND THE APPLICANT WILL BE ENTITLED TO PAYMENT OF 80% OF ITS REQUESTED FEES AND 100% OF ITS REQUESTED EXPENSES WITHOUT FURTHER NOTICE OR HEARING. Dated: January 26, 2016 Wilmington, Delaware POLSINELLI PC /s/ Shanti M. Katona Christopher A. Ward (Del. Bar No. 3877) Shanti M. Katona (Del. Bar No. 5352) Jarrett Vine (Del. Bar No. 5400) 222 Delaware Avenue, Suite 1101 Wilmington, Delaware Telephone: (302) Facsimile: (302) cward@polsinelli.com skatona@polsinelli.com jvine@polsinelli.com -and- MCDERMOTT WILL & EMERY LLP Timothy W. Walsh (admitted pro hac vice) Darren Azman (admitted pro hac vice) 340 Madison Avenue New York, New York Telephone: (212) Facsimile: (212) twwalsh@mwe.com dazman@mwe.com Counsel to the Debtors and Debtors in Possession

18 Case CSS Doc Filed 01/26/16 Page 1 of 18 Exhibit A AFFIRMATIVE INSURANCE HOLDING, INC. Time Summary December 1, 2015 to December 31, 2015 Professional Category Hours Rate Amount DAVID E BERLINER PARTNER , CHRIS CREGER MANAGER , ALEXIS D'AVERSA STAFF , ALEX HSU STAFF , TOTAL: $52,

19 Case CSS Doc Filed 01/26/16 Page 2 of 18 Exhibit B AFFIRMATIVE INSURANCE HOLDING, INC. RECAP OF PROFESSIONAL SERVICES December 1, 2015 to December 31, 2015 A. TAX ISSUES Date Name Description Time 12/15/2015 D.B. Reviewed summary of potential tax claim amounts and 2014 consolidated income tax return to prepare for conference call /17/2015 D.B. Met with BDO Team regarding disclosure of NOLs and 0.2 potential value. TOTAL: 0.8 INDIVIDUAL TOTALS Name Hour Rate Compensation D. BERLINER (D.B.) TOTAL:

20 Case CSS Doc Filed 01/26/16 Page 3 of 18 Exhibit B AFFIRMATIVE INSURANCE HOLDING, INC. RECAP OF PROFESSIONAL SERVICES December 1, 2015 to December 31, 2015 B. MEETINGS - DEBTOR Date Name Description Time 12/2/2015 C.C. Prepared and related follow up for SOFA/Schedules call with company. 12/3/2015 C.C. Work on additional updates/ changes RE: AFFM Schedule and SOFA drafts with K. Nownes. 12/4/2015 C.C. Multiple responses and follow up questions re: drafts of SOAL/ SOFA for K. Nownes /9/2015 C.C. Work on revised SOFA drafts with K. Nownes /10/2015 C.C. Work on updates/ changes Schedule G- updates with K. Nownes. 12/14/2015 C.C. Provide M. McClure and J. Killacky Affirmative- SOAL/ SOFA Updates and related for changes/ edits as directed. 12/15/2015 C.C. Work with M. McClure and J. Killacky re: adjustments to Affirmative Schedules and SOFA Drafts 12/14/ /15/2015 C.C. Multiple responses and updates with M. McClure and J. Killacky re: adjustments to Schedules and SOFA Drafts 12/14/ /16/2015 C.C. Multiple responses and updates with M. McClure and J. Killacky Re adjustments to Affirmative Schedules and SOFA Drafts 12/14/ /18/2015 C.C. s and follow up with J. Killacky re: Final Affirmative - Schedules/Statements

21 Case CSS Doc Filed 01/26/16 Page 4 of 18 Exhibit B AFFIRMATIVE INSURANCE HOLDING, INC. RECAP OF PROFESSIONAL SERVICES December 1, 2015 to December 31, 2015 B. MEETINGS - DEBTOR Date Name Description Time 12/18/2015 D.B. Reviewed comments from J. Killacky to final draft of 0.2 SOFA/SOALs. TOTAL: 17.9 INDIVIDUAL TOTALS Name Hour Rate Compensation D. BERLINER (D.B.) C. CREGER (C.C.) , TOTAL: ,

22 Case CSS Doc Filed 01/26/16 Page 5 of 18 Exhibit B AFFIRMATIVE INSURANCE HOLDING, INC. RECAP OF PROFESSIONAL SERVICES December 1, 2015 to December 31, 2015 C. MONTHLY OPERATING REPORT Date Name Description Time 12/18/2015 C.C. Work with D. Azman and D. Ventricelli re: Monthly Operating Reports shells and related. 12/21/2015 C.C. Draft and provide outline for Affirmative - MOR Shells and related /22/2015 D.B. Met with C. Creger regarding status of MOR timing. 0.1 TOTAL: 2.4 INDIVIDUAL TOTALS Name Hour Rate Compensation D. BERLINER (D.B.) C. CREGER (C.C.) TOTAL:

23 Case CSS Doc Filed 01/26/16 Page 6 of 18 Exhibit B AFFIRMATIVE INSURANCE HOLDING, INC. RECAP OF PROFESSIONAL SERVICES December 1, 2015 to December 31, 2015 D. BUSINESS ANALYSIS Date Name Description Time 12/15/2015 D.B. Reviewed from FTI (UCC FA) regarding potential priority tax claims and discussed with C. Creger /29/2015 C.C. Review and start drafting responses re: Affirmative 0.6 Questions from UCC. TOTAL: 0.9 INDIVIDUAL TOTALS Name Hour Rate Compensation D. BERLINER (D.B.) C. CREGER (C.C.) TOTAL:

24 Case CSS Doc Filed 01/26/16 Page 7 of 18 Exhibit B AFFIRMATIVE INSURANCE HOLDING, INC. RECAP OF PROFESSIONAL SERVICES December 1, 2015 to December 31, 2015 E. SOFA/SOAL ANALYSIS Date Name Description Time 12/1/2015 A.H. Formatted SOFA 3b and summarized data /1/2015 A.H. Updated format and schedule for SOFA 21 and 22 exhibits for access file. 12/1/2015 C.C. Draft outline/ updates Re: Affirmative- SOAL/SOFA Status (Outline for Call Tomorrow) for D. Azman. 12/1/2015 C.C. Work with A. D Aversa and A Hsu re: Affirmative- SOAL/SOFA Status (Outline for Call Tomorrow) for D. Azman. 12/1/2015 C.C. Create, review, and update Affirmative Insurance Services Payment to Policyholders (v1).xlsx with A. Hsu. 12/1/2015 C.C. Work on adjustments and changes RE: Schedules/SOFA for D. Azman. 12/1/2015 D.B. Reviewed changes to bankruptcy forms and discussed impact on SOFA/SOAL analysis with C. Creger. 12/2/2015 A.H. Compiled and summarized SOFA SOAL updated documents /2/2015 A.H. Formatted SOFA 3c and summarized data /2/2015 C.C. Update BDO- SOFA and Schedules Work plan-baseline for Affirmative for received items from Tameka and John

25 Case CSS Doc Filed 01/26/16 Page 8 of 18 Exhibit B AFFIRMATIVE INSURANCE HOLDING, INC. RECAP OF PROFESSIONAL SERVICES December 1, 2015 to December 31, 2015 E. SOFA/SOAL ANALYSIS Date Name Description Time 12/2/2015 C.C. Work on load files for Affirmative Insurance- SOAL/ Sofa for RustOmni. 12/3/2015 A.D. Performed research re: Hallberg judgment, Performed research relating to case professional web addresses to be used to update SOFA 11. Work session with C. Creger to prepare draft re: SOFA changes. 12/3/2015 C.C. Work extensively with internal team (A. D Aversa and A. Hsu) re: AFFM Schedule and SOFA updates and changes. 12/3/2015 C.C. Work with L. Wu re: requested Items for Affirmative Holdings for SOAL. 12/3/2015 C.C. Review and send BDO- SOFA and Schedules Work plan- Baseline for Affirmative Map for Load files to K. Nownes. 12/3/2015 D.B. Met with C. Creger regarding status update and converting SOFA/SOAL data to bankruptcy forms and information still missing from Company. 12/4/2015 A.D. Prepared adjustments to the Global Notes for the SOFA/SOAL. 12/4/2015 C.C. Review and provide load files re: Schedule- Part 7- Fixed Assets (RustOmni), SOFA 3C- Payment to Insiders (Intercompany Adds) (October October 2015), Affirmative- SOFA 6 (Old SOFA 13) Setoffs (All Adds) (RustOmni Load), and additional edits to K. Nowens for RustOmni data load. 12/4/2015 C.C. Review and provide load files re: Affirmative Schedule E- Taxes (RustOmni Load), Schedule F- Intercompany claims by Debtor (non-regulated) entities against regulated entities, and other SOAL sections to K. Nownes

26 Case CSS Doc Filed 01/26/16 Page 9 of 18 Exhibit B AFFIRMATIVE INSURANCE HOLDING, INC. RECAP OF PROFESSIONAL SERVICES December 1, 2015 to December 31, 2015 E. SOFA/SOAL ANALYSIS Date Name Description Time 12/4/2015 D.B. Reviewed analysis summary from C. Creger regarding status of SOFA/SOAL and remaining work to be done. 12/7/2015 C.C. Work on and adjust (Affirmative) and review SOAL/ SOFA with A. D'Aversa and A. Hsu /7/2015 C.C. Work on Schedule E Load File for Affirmative Schedules /8/2015 A.D. Reconciled SOFA for each Debtor entity against the new SOFA template to determine any missing sections or necessary changes. 12/8/2015 A.H. Analyzed SOALs for differences and updates in schedules AB. 12/8/2015 A.H. Analyzed SOALs for differences and updates in schedules D,EF,G,H. 12/8/2015 C.C. Create, review, and provide Affirmative - SOAL & SOFA Drafts 12/8/ /8/2015 C.C. Work on and adjust (Affirmative) and review SOAL/ SOFA with A. D'Aversa and A. Hsu. 12/8/2015 D.B. Reviewed SOFA/SOAL work plan status update from C. Creger and discussed open items. 12/9/2015 C.C. Create, review, and provide Affirmative - SOAL & SOFA Drafts 12/9/

27 Case CSS Doc Filed 01/26/16 Page 10 of 18 Exhibit B AFFIRMATIVE INSURANCE HOLDING, INC. RECAP OF PROFESSIONAL SERVICES December 1, 2015 to December 31, 2015 E. SOFA/SOAL ANALYSIS Date Name Description Time 12/10/2015 A.H. Compiled drafts of SOFA SOAL /10/2015 C.C. Provided K. Nownes Affirmative - SOAL/ SOFA updates and related for changes/ edits as directed. 12/10/2015 C.C. Provide K. Nownes Affirmative- SOAL/ SOFA Updates and related for changes/ edits as directed. 12/10/2015 C.C. Reviewed, edited and provided SOFA 3 - completely new/replace to K. Nownes. 12/10/2015 C.C. Provide updated drafts Re: Affirmative - SOAL & SOFA Drafts 12/8/2015 and related notes to company. 12/10/2015 C.C. Work on updates/ changes re: SOFA Current Exhibit B22 (New Exhibit 64. Part 10- Intangibles and Intellectual Property). 12/10/2015 C.C. Create, review, and provide Affirmative Global Notes (Draft Document) 12/10/2015 to D. Azman. 12/10/2015 D.B. Reviewed 1st draft of SOFA/SOAL for various debtors; prepared notice and comments /11/2015 A.H. Compiled updated SOFA SOAL /11/2015 C.C. Multiple updates/ changes provided Re: Affirmative - SOAL & SOFA Updates to K. Nownes. 12/11/2015 C.C. Provide K. Nownes Affirmative- SOAL/ SOFA Updates and related for changes/ edits as directed

28 Case CSS Doc Filed 01/26/16 Page 11 of 18 Exhibit B AFFIRMATIVE INSURANCE HOLDING, INC. RECAP OF PROFESSIONAL SERVICES December 1, 2015 to December 31, 2015 E. SOFA/SOAL ANALYSIS Date Name Description Time 12/11/2015 C.C. Further adjustments to Affirmative Global Notes (Final) 12/11/ /11/2015 D.B. Met with C. Creger to review comments and questions on SOFA/SOALs. 12/11/2015 D.B. Coordinated review of 1st draft of SOFA/SOALs for all debtors; prepared notes and comments. 12/14/2015 A.D. Performed revisions to the Global Notes And Statement Of Limitations Regarding the SOFA/SOAL, as directed by C. Creger. 12/14/2015 A.H. Compiled and organized updated SOFA SOAL with latest edits. 12/14/2015 C.C. Multiple edits/ review Affirmative Global Notes (Final) 12/11/ /14/2015 C.C. Provide K. Nownes Affirmative- SOAL/ SOFA Updates and related for changes/ edits as directed. 12/14/2015 C.C. Create, review and provide Affirmative Schedules and SOFA Drafts 12/14/2015 to company and counsel. 12/14/2015 C.C. Provide K. Nownes Affirmative- SOAL/ SOFA Updates and related for changes/ edits as directed. 12/14/2015 D.B. Discussed status of update to SOFA/SOALs and timeline with C. Creger

29 Case CSS Doc Filed 01/26/16 Page 12 of 18 Exhibit B AFFIRMATIVE INSURANCE HOLDING, INC. RECAP OF PROFESSIONAL SERVICES December 1, 2015 to December 31, 2015 E. SOFA/SOAL ANALYSIS Date Name Description Time 12/14/2015 D.B. Reviewed draft global notes to SOFA/SOALs; prepared comments and discussed with C.Creger. 12/15/2015 A.D. Prepare revisions to Schedule E - Taxes, as directed by C. Creger. 12/15/2015 A.D. Performed revisions to Schedule E - Priority Tax Claims, as directed by C. Creger. 12/15/2015 C.C. Provide K. Nownes Affirmative- SOAL/ SOFA Updates and related for changes/ edits as directed. 12/15/2015 C.C. Provide K. Nownes Affirmative- SOAL/ SOFA Updates and related for changes/ edits as directed. 12/16/2015 C.C. Create, review and provide Affirmative Schedules and SOFA Drafts 12/16/2015 to company and counsel. 12/16/2015 C.C. Provide K. Nownes Affirmative- SOAL/ SOFA Updates and related for changes/ edits as directed. 12/16/2015 C.C. Provide K. Nownes Affirmative- SOAL/ SOFA Updates and related for changes/ edits as directed. 12/16/2015 C.C. Provide K. Nownes Affirmative- SOAL/ SOFA Updates and related for changes/ edits as directed. 12/16/2015 D.B. Reviewed updated drafts of SOFAs for all Debtors and prepared comments. 12/17/2015 C.C. Work with D. Berliner re: Schedules/ Statements and related changes for company

30 Case CSS Doc Filed 01/26/16 Page 13 of 18 Exhibit B AFFIRMATIVE INSURANCE HOLDING, INC. RECAP OF PROFESSIONAL SERVICES December 1, 2015 to December 31, 2015 E. SOFA/SOAL ANALYSIS Date Name Description Time 12/17/2015 C.C. Create, review and provide final schedules/statements for client. 12/17/2015 C.C. Update SOAL/ SOFA re: NOLs and related with D. Azman /17/2015 D.B. Reviewed updated drafts of Schedules for all Debtors, 2.8 prepared comments and discussed comments with C. Creger. TOTAL: INDIVIDUAL TOTALS Name Hour Rate Compensation D. BERLINER (D.B.) , C. CREGER (C.C.) , A. D'AVERSA (A.D.) , A. HSU (A.H.) , TOTAL: ,

31 Case CSS Doc Filed 01/26/16 Page 14 of 18 Exhibit B AFFIRMATIVE INSURANCE HOLDING, INC. RECAP OF PROFESSIONAL SERVICES December 1, 2015 to December 31, 2015 F. COUNSEL DISCUSSIONS & COURT HEARINGS Date Name Description Time 12/2/2015 C.C. AFFM Schedule and SOFA Call with RustOmni and related follow up internally. 12/2/2015 D.B. Exchanged s with counsel and followed up with C. Creger regarding repairment to use new bankruptcy forms for SOFA/SOAL; discussed work to be done to convert data to new forms and strategy to complete. 12/4/2015 C.C. Respond to D. Azman re: Affirmative- BDO Fees and related. 12/9/2015 C.C. Multiple s and responses re: Bar Date and Schedules and SOFAs for S. Katona and D. Azman /9/2015 D.B. Reviewed from counsel with update on critical dates /15/2015 C.C. Work on adjust re: AFFM - Draft Plan Term Sheet and related Tax File for D. Berliner and D. Azman. 12/15/2015 D.B. Participated on conference call with Darren Azman, FTI and other professionals regarding potential priority tax claim. 12/17/2015 D.B. Reviewed s from J. Killacky and D. Azman regarding additional comments on Global notes /18/2015 C.C. Responses to D. Azman re: Affirmative- status and updates

32 Case CSS Doc Filed 01/26/16 Page 15 of 18 Exhibit B AFFIRMATIVE INSURANCE HOLDING, INC. RECAP OF PROFESSIONAL SERVICES December 1, 2015 to December 31, 2015 F. COUNSEL DISCUSSIONS & COURT HEARINGS Date Name Description Time TOTAL: 8.2 INDIVIDUAL TOTALS Name Hour Rate Compensation D. BERLINER (D.B.) C. CREGER (C.C.) , TOTAL: 8.2 3,

33 Case CSS Doc Filed 01/26/16 Page 16 of 18 Exhibit B AFFIRMATIVE INSURANCE HOLDING, INC. RECAP OF PROFESSIONAL SERVICES December 1, 2015 to December 31, 2015 G. FEE APPLICATIONS / MONTHLY STATEMENTS Date Name Description Time 12/18/2015 D.B. Made initial review of BDO Fee Application for November 2015 and prepared comments /21/2015 D.B. Finalized review of BDO Fee Application for November , prepared comments and edits, approved and signed fee application and Berliner Declaration. TOTAL: 2.9 INDIVIDUAL TOTALS Name Hour Rate Compensation D. BERLINER (D.B.) , TOTAL: 2.9 1,

34 Case CSS Doc Filed 01/26/16 Page 17 of 18 Exhibit C 1. PHOTOCOPYING a. Internal b. External AFFIRMATIVE INSURANCE HOLDINGS, INC., ET AL., Schedule of Expenses December 1, 2015 through December 31, TELECOMMUNICATIONS a. Toll Charges b. Facsimile c. Wi-Fi $ COURIER, FRIEGHT AND POSTAL SERVICES For overnight and hand delivery to Counsel and Committee members 4. COURT REPORTER AND TRANSCRIPTS 5. TECHNOLOGY SERVICES 6. OUT-OF-TOWN TRAVEL a. Transportation b. Lodging c. Meals 7. OUTSIDE SERVICES 8. LOCAL MEALS 9. LOCAL TRANSPORTATION, TOLLS, MILEAGE AND PARKING for cabs to/from meetings, car service for employees working after 8:00 p.m. and local mileage using personal auto 10. MISCELLANEOUS Publications/Subscriptions TOTAL $

35 Case CSS Doc Filed 01/26/16 Page 18 of 18 Exhibit C Transaction Date Name Description Expenses Notes 11/5/2015 Creger, Christopher Wi-Fi 9.21 Inflight Internet 11/6/2015 Creger, Christopher Travel Late Night Car Service back from Dallas 11/27/2015 Creger, Christopher Travel Affirmative Dallas Visit (Late Tolls) $