As filed with the Securities and Exchange Commission on May 20, 2005



                                                             FILE NO. 333-124842
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549



                                AMENDMENT No. 1
                                       TO


                                    FORM S-3
             REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933


                          21ST CENTURY HOLDING COMPANY
                          ----------------------------
             (Exact name of registrant as specified in its charter)


           FLORIDA                                                65-0248866
-------------------------------                              -------------------
(State or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                              Identification No.)


       3661 WEST OAKLAND PARK BLVD, SUITE 300, LAUDERDALE LAKES, FL 33311
                                 (954) 581-9993
          -------------------------------------------------------------
          (Address, including zip code, and telephone number, including
             area code, of registrant's principal executive offices)


                              RICHARD A. WIDDICOMBE
                             CHIEF EXECUTIVE OFFICER
                          21ST CENTURY HOLDING COMPANY
                     3661 WEST OAKLAND PARK BLVD., SUITE 300
                           LAUDERDALE LAKES, FL 33311
                                 (954) 581-9993
            ---------------------------------------------------------
            (Name, address, including zip code, and telephone number,
                   including area code, of agent for service)

                                   COPIES TO:

                              NINA S. GORDON, P.A.
                                BROAD AND CASSEL
                           7777 GLADES ROAD, SUITE 300
                            BOCA RATON, FLORIDA 33434
                            TELEPHONE: (561) 218-8856
                           TELECOPIER: (561) 218-8978

        Approximate date of commencement of proposed sale to the public:
  As soon as practicable after this Registration Statement becomes effective.

If the only securities  being registered on this form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. |_|

If any of the  securities  being  registered on this form are to be offered on a
delayed or continuous  basis  pursuant to Rule 415 under the  Securities  Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. |X|

If this form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the  Securities  Act  registration  statement  number of the  earlier  effective
registration statement for the same offering. |_|

If this form is a  post-effective  amendment filed pursuant to Rule 462(c) under
the  Securities  Act,  check  the  following  box and  list the  Securities  Act
registration  statement number of the earlier effective  registration  statement
for the same offering. |_|

If delivery  of the  prospectus  is  expected  to be made  pursuant to Rule 434,
please check the following box. |_|


      THE REGISTRANT HEREBY AMENDS THIS  REGISTRATION  STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER  AMENDMENT  WHICH  SPECIFICALLY  STATES  THAT  THIS  REGISTRATION
STATEMENT SHALL  THEREAFTER  BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES  ACT OF 1933 OR UNTIL THIS  REGISTRATION  STATEMENT  SHALL BECOME
EFFECTIVE  ON SUCH  DATE  AS THE  SECURITIES  AND  EXCHANGE  COMMISSION,  ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.


THE  INFORMATION IN THIS  PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.  WE MAY
NOT SELL  THESE  SECURITIES  UNTIL THE  REGISTRATION  STATEMENT  FILED  WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE  SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES
IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.



                       SUBJECT TO COMPLETION, MAY 20, 2005


                                   PROSPECTUS

                         300,000 SHARES OF COMMON STOCK

                          21ST CENTURY HOLDING COMPANY


      Edward J.  Lawson,  President  and  Chairman of the Board of 21st  Century
Holding Company,  and his spouse,  Michele V. Lawson,  are offering to sell from
time to time,  pursuant to this  prospectus,  up to 300,000 shares of our common
stock owned directly and  beneficially by them. We will not receive any proceeds
from this sale of our common stock.

      These  shareholders  intend  to  offer  and  sell  these  shares  only  to
institutional  investors,  including  but not  limited to hedge  funds and other
investment companies.

      We will pay our out-of-pocket expenses, legal and accounting fees, and the
other expenses of registering the resale of the shares. The selling shareholders
will pay selling commissions, if any, in connection with the sale of the shares.


      Our common stock is traded on the Nasdaq  National Market under the symbol
"TCHC." On May 18, 2005, the last reported sale price of the common stock on the
Nasdaq National Market was $12.24 per share.


      THE SHARES OF COMMON STOCK  OFFERED  HEREBY  INVOLVE A HIGH DEGREE OF RISK
AND SHOULD BE  CONSIDERED  ONLY BY SUCH PERSONS  CAPABLE OF BEARING THE ECONOMIC
RISK OF SUCH INVESTMENT.  YOU SHOULD CAREFULLY  CONSIDER THE "RISKS OF INVESTING
IN OUR SECURITIES" SECTION BEGINNING ON PAGE 4 OF THIS PROSPECTUS.

      NEITHER  THE SEC 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.

                 The date of this prospectus is May _____, 2005.


                                TABLE OF CONTENTS



                                                                                                                 PAGE
                                                                                                                 ----
                                                                                                              
PROSPECTUS SUMMARY..................................................................................................1

RECENT DEVELOPMENTS.................................................................................................1

OVERVIEW............................................................................................................2

RISKS OF INVESTING IN OUR SHARES....................................................................................4

         The State of Florida, where our headquarters and a substantial portion of our policies are located,
                  has experienced four hurricanes in August and September
                  2004..............................................................................................4

         As a result of the hurricanes striking Florida in August and September 2004, we are
                  not in compliance with certain regulatory requirements............................................5

         We requested that A.M. Best cease rating our insurance subsidiaries.  As a result, we may be unable
                  to write or renew desirable insurance policies or obtain adequate reinsurance, which would
                  limit or halt our growth and harm our
                  business..........................................................................................5

         If we are unable to continue our growth because our capital must be used to pay
                  greater than anticipated claims, our financial results may suffer.................................6

         The maximum credit commitment under our revolving loan could be subject to reduction,
                  which would adversely affect our available working capital........................................6

         We are subject to significant government regulation, which can limit our growth and
                  increase our expenses, thereby reducing our earnings..............................................7

         Our revenues and operating performance may fluctuate with business cycles in the
                  property and casualty insurance industry..........................................................7

         We may not obtain the necessary regulatory approvals to expand the types of insurance
                  products we offer or the states in which we operate...............................................7

         Although we follow the industry practice of reinsuring a portion of our risks, our
                  costs of obtaining reinsurance have increased and we may not be able to
                  successfully alleviate risk through reinsurance arrangements......................................8

         Our loss reserves may be inadequate to cover our actual liability for losses, causing
                  our results of operations to be adversely affected................................................9

         We currently rely on agents, most of whom are independent agents or franchisees, to
                  write our insurance policies, and if we are not able to attract and retain
                  independent agents and franchisees, our revenues would be negatively
                  affected..........................................................................................9

         Nonstandard automobile insurance historically has a higher frequency of claims than
                  standard automobile insurance, thereby increasing our potential for loss
                  exposure beyond what we would be likely to experience if we offered only
                  standard automobile insurance.....................................................................9

         Florida's personal injury protection insurance statute contains provisions that favor
                  claimants, causing us to experience a higher frequency of claims than might
                  otherwise be the case if we operated only outside of Florida.....................................10

         Our business strategy is to avoid competition in our automobile insurance products
                  based on price to the extent possible. This strategy, however, may result in
                  the loss of business in the short term...........................................................10

         Our investment portfolio may suffer reduced returns or losses, which would
                  significantly reduce our earnings................................................................10

         Our president and chief executive officer are key to the strategic direction of our
                  company. If we were to lose the services of either of them, our business
                  could be harmed..................................................................................11




                                TABLE OF CONTENTS
                                   (Continued)



                                                                                                                 PAGE
                                                                                                                 ----
                                                                                                              

         The trading of our warrants may negatively affect the trading prices of our common
                  stock if investors purchase and exercise the warrants to facilitate other
                  trading strategies, such as short selling........................................................11

         Our largest shareholders control approximately 22% of the voting power of our outstanding
                  common stock, and after selling the shares covered by this prospectus will control
                  approximately 18%, which could discourage potential acquirors and prevent changes in
                  management.......................................................................................12

         We have authorized but unissued preferred stock, which could affect rights of holders
                  of common stock..................................................................................12

         Our articles of incorporation and bylaws and Florida law may discourage takeover
                  attempts and may result in entrenchment of management............................................12

         As a holding company, we depend on the earnings of our subsidiaries and their ability
                  to pay management fees and dividends to the holding company as the primary
                  source of our income.............................................................................13

NOTE REGARDING FORWARD-LOOKING STATEMENTS..........................................................................13

USE OF PROCEEDS....................................................................................................14

SELLING SECURITY HOLDERS...........................................................................................14

HOW THE SECURITIES MAY BE DISTRIBUTED..............................................................................14

LEGAL MATTERS......................................................................................................16

EXPERTS............................................................................................................16

WHERE YOU CAN FIND MORE INFORMATION................................................................................16

INCORPORATION OF CERTAIN INFORMATION BY REFERENCE..................................................................16

INDEMNIFICATION OF DIRECTORS AND OFFICERS..........................................................................17


                              ABOUT THIS PROSPECTUS

      You should rely only on the information  contained in this prospectus.  No
dealer,  salesperson or other person is authorized to give any information  that
is not contained in this prospectus. This prospectus is not an offer to sell nor
is it seeking an offer to buy these shares in any  jurisdiction  where the offer
or sale is not  permitted.  The  information  contained  in this  prospectus  is
correct only as of the date of this  prospectus,  regardless  of the time of the
delivery of this prospectus or any sale of these shares.


                               PROSPECTUS SUMMARY

      This is only a summary and does not contain  all of the  information  that
may be important to you. You should read the more detailed information contained
in  this  prospectus  and  all  other   information,   including  the  financial
information  and statements  with notes, as discussed in the "Where You Can Find
More Information" section of this prospectus.

RECENT DEVELOPMENTS

IMPACT OF 2004 HURRICANE SEASON


      In August  and  September  2004,  the State of  Florida  experienced  four
hurricanes,  Charley,  Frances,  Ivan  and  Jeanne.  Since  then,  we have  been
receiving  and  processing  claims  made under our  homeowners'  and mobile home
owners'  policies,  a process  that is  expected to be  substantially  completed
during  the first  half of 2005.  One of our  subsidiaries,  Federated  National
Insurance Company ("Federated  National"),  incurred significant losses relative
to  its  homeowners'   insurance  line  of  business.  As  of  March  31,  2005,
approximately 8,500 policyholders had filed hurricane-related claims totaling an
estimated $117.2 million,  of which we currently  estimate that our share of the
costs associated with these hurricanes will be approximately $45.0 million,  net
of our reinsurance recoveries and amortized reinstatement premiums.


      In August 2004, A.M. Best Company notified us that Federated  National and
American Vehicle Insurance Company ("American  Vehicle") were being placed under
review with  negative  implications.  A.M.  Best in 2003 had assigned  Federated
National a B rating  ("Fair," which is the seventh of 14 rating  categories) and
American  Vehicle  a B+  rating  ("Very  Good,"  which is the sixth of 14 rating
categories).  In connection with this review,  we requested that A.M. Best cease
its ratings of these subsidiaries.  The withdrawal of our ratings could limit or
prevent us from writing or renewing desirable insurance policies, from obtaining
adequate reinsurance or from borrowing on our line of credit. Federated National
and American Vehicle are currently rated "A"  ("Unsurpassed,"  which is first of
six ratings) by Demotech, Inc.


      To retain  our  certificates  of  authority,  Florida  insurance  laws and
regulations require that our insurance company subsidiaries,  Federated National
and American  Vehicle,  maintain  capital surplus equal to the greater of 10% of
its liabilities or $4.0 million, as defined in the Florida Insurance Code. As of
March 31, 2005,  Federated National and American Vehicle were in compliance with
statutory minimum capital and surplus requirement.


      The  insurance  companies  are  also  required  to  adhere  to  prescribed
premium-to-capital  surplus ratios. As of December 31, 2004,  Federated National
did not comply with the prescribed  premium-to-capital  surplus ratio, primarily
based on the incurred  losses  associated with the four hurricanes that occurred
in August and September  2004. As a result of a $6.1 million  contribution  made
during  the  first  quarter  of 2005  from  the  Company,  Federated  National's
compliance  with  the  prescribed  premium-to-capital  surplus  ratio  has  been
restored.  American  Vehicle has  remained  in  compliance  with the  prescribed
premium-to-capital surplus ratios.


                                       1


      Although we believe that the occurrence of four hurricanes hitting Florida
within one year has not  previously  occurred for as long as records for weather
events have been kept,  some weather  analysts  believe that a period of greater
hurricane  activity has begun.  To address this  possibility,  we are  exploring
alternatives  to reduce our  exposure to these types of storms.  Although  these
measures may increase  operating  expenses,  management  believes that they will
assist  us in  protecting  long-term  profitability,  although  there  can be no
assurances that will be the case.

OVERVIEW

      We are an insurance holding company,  which,  through our subsidiaries and
our contractual relationships with our independent agents, control substantially
all aspects of the insurance  underwriting,  distribution and claims process. We
are authorized to underwrite personal automobile  insurance,  commercial general
liability  insurance,  homeowners'  property and casualty insurance,  and mobile
home  property and casualty  insurance in various  states with various  lines of
authority through our wholly owned  subsidiaries,  Federated  National Insurance
Company ("Federated National") and American Vehicle Insurance Company ("American
Vehicle").

      Federated  National  is  authorized  to  underwrite   personal  automobile
insurance, homeowners' property and casualty insurance, and mobile home property
and casualty  insurance in Florida as an admitted  carrier.  American Vehicle is
authorized to underwrite  personal  automobile  insurance and commercial general
liability insurance in Florida as an admitted carrier.  American Vehicle is also
authorized  to  underwrite  homeowners'  property  and  casualty  insurance  and
commercial general liability  insurance in Louisiana as an admitted carrier.  In
addition,  American  Vehicle is  authorized  to  underwrite  commercial  general
liability  insurance  in Georgia as a surplus  lines  carrier and in Texas as an
admitted carrier.  American Vehicle is authorized as a surplus lines carrier for
commercial  general  liability  insurance  in  Kentucky  and  Alabama,   and  we
anticipate  that  underwriting  will begin in these  states in the near  future.
American  Vehicle's  operations  in Florida,  Georgia and Louisiana are ongoing.
American Vehicle operations in Texas, Alabama and Kentucky are expected to begin
this year.  American  Vehicle has  pending  applications,  in various  stages of
approval,  to be authorized as a surplus carrier in the states of California and
Virginia.

      We select  additional  states for expansion based on a number of criteria,
including the size of the insurance market for our authorized lines of business,
statewide loss results,  competition and the regulatory climate.  Our ability to
expand  into other  states will be subject to the prior  regulatory  approval of
each  state.   Certain  states  impose  operating   requirements  upon  licensee
applicants,  which may  impose  burdens  on our  ability  to obtain a license to
conduct insurance business in those other states. There can be no assurance that
we will be able to obtain the required licenses,  and the failure to do so would
limit our ability to expand geographically.

      We  internally  process  claims made by our own and  third-party  insureds
through our wholly owned claims adjusting company,  Superior Adjusting,  Inc. We
also offer premium  financing to our own and  third-party  insureds  through our
wholly owned subsidiary, Federated Premium Finance, Inc.


      During the  three months ended March 31, 2005, 52.0%, 30.0%, 17.1% and .9%
of the  policies  we  underwrote  were for  homeowners'  property  and  casualty
insurance,   personal   automobile   insurance,   commercial  general  liability
insurance, and mobile home property and casualty insurance, respectively.



                                       2



      During the year ended December 31, 2004, 62.0%,  24.1%,  12.4% and 1.5% of
the policies we underwrote were for homeowners' property and casualty insurance,
personal  automobile  insurance,  commercial  general liability  insurance,  and
mobile home property and casualty insurance, respectively.


      We market and distribute our own and  third-party  insurers'  products and
other  services  primarily  in South and Central  Florida,  through a network of
approximately 1,500 independent agents and a select number of general agents.


      Assurance Managing General Agents, Inc.  ("Assurance MGA"), a wholly owned
subsidiary,  acts as  Federated  National's  and  American  Vehicle's  exclusive
managing general agent. Assurance MGA currently provides all underwriting policy
administration,  marketing,  accounting  and  financial  services  to  Federated
National  and  American   Vehicle,   and  participates  in  the  negotiation  of
reinsurance  contracts.  Assurance MGA generates revenue through a 6% commission
fee from the insurance  company's net written premium,  policy fee income of $25
per  policy  and other  administrative  fees from the  marketing  of  companies'
products through the Company's  distribution network. The 6% commission fee from
Federated  National and  American  Vehicle was made  effective  January 1, 2005.
Assurance MGA plans to establish  relationships with additional carriers and add
additional insurance products in the future.


      We believe that we can be  distinguished  from our competitors  because we
generate revenue from insurance  underwriting and claims processing.  We provide
quality service to both agents and insureds by utilizing an integrated  computer
system,  which  links our  insurance  and service  entities.  Our  computer  and
software  systems  allow  for  automated  premium  quotation,  policy  issuance,
billing,  payment and claims  processing and enables us to continuously  monitor
substantially  all  aspects of our  business.  Using these  systems,  agents can
access a customer's  driving record,  quote a premium,  offer premium  financing
and, if requested, generate a policy on-site. We believe that these systems have
facilitated  our  ability  to market  and  underwrite  insurance  products  on a
cost-efficient  basis,  allow our independent agents to be a "one stop" shop for
insurance and other services,  and will enhance our ability to expand in Florida
and to other states.

      As we expand our  operations,  we  continue to review our  operations  and
lines of business for  strategies to further  improve our efficiency and results
of operations. These strategies will most likely include expansion of operations
into  additional  states;  possible  acquisitions  or  dispositions  of  assets;
insurance  policy  enhancements  and development of procedures to improve claims
history and mitigate  losses from claims.  There can be no assurances,  however,
that any such strategies will be developed or successfully implemented.

      Our  executive  offices are located at 3661 West Oakland  Park  Boulevard,
Suite 300, Lauderdale Lakes, Florida and our telephone number is (954) 581-9993.

                        RISKS OF INVESTING IN OUR SHARES

      You should  carefully  consider the  following  risks,  in addition to the
other information presented in this prospectus or incorporated by reference into
this prospectus,  before making an investment decision. If any of these risks or
uncertainties  actually occur,  our business,  results of operations,  financial
condition,  or prospects could be  substantially  harmed,  which would adversely
affect your investment.


                                       3


RISKS RELATED TO OUR BUSINESS

THE STATE OF FLORIDA,  WHERE OUR HEADQUARTERS  AND A SUBSTANTIAL  PORTION OF OUR
POLICIES ARE LOCATED,  HAS  EXPERIENCED  FOUR HURRICANES IN AUGUST AND SEPTEMBER
2004.

      We write insurance policies that cover automobile owners,  homeowners' and
business owners for losses that result from,  among other things,  catastrophes.
Catastrophic  losses can be caused by hurricanes,  tropical  storms,  tornadoes,
wind, hail,  fires,  riots and explosions,  and their incidence and severity are
inherently unpredictable.  The extent of losses from a catastrophe is a function
of two factors: the total amount of the insurance company's exposure in the area
affected  by the event and the  severity  of the event.  Our  policyholders  are
currently concentrated in South and Central Florida, which is especially subject
to adverse weather conditions such as hurricanes and tropical storms.


      In August  and  September  2004,  the State of  Florida  experienced  four
hurricanes,  Charley,  Frances,  Ivan  and  Jeanne.  One  of  our  subsidiaries,
Federated National,  incurred significant losses relative to its homeowners' and
mobile   homeowners'   insurance   lines  of   business.   Approximately   8,500
policyholders have filed  hurricane-related  claims totaling an estimated $117.2
million,  of which we estimate that our share of the costs associated with these
hurricanes will be approximately  $45.0 million,  net of reinsurance  recoveries
and amortized reinstatement premiums.


      For each  hurricane  season,  the excess of loss treaty will insure us for
$24 million  with the Company  retaining  the first $10 million of loss and loss
adjustment  expenses.  The  treaty  has a  provision  which,  for an  additional
prorated  premium,  will  insure us for  another  $24  million  of loss and loss
adjustment  expense for subsequent  occurrences  with the Company  retaining the
first $10 million in loss and loss adjustment  expense.  As a result of the loss
and loss adjustment  expense incurred in connection with the Hurricanes  Charles
and Frances,  the Company has exhausted its  recoveries of $48 million under the
terms of this treaty.

      The excess of loss treaty also insures us for an additional $34 million in
excess of the  Company's  $10  million  retention  plus the next $24  million as
described  above.  Accordingly,  loss and loss adjustment  expense  incurred for
Hurricanes Ivan, Jeanne and any subsequent  catastrophic events through June 30,
2005,  up to $34  million  each,  are  the  responsibility  of the  Company,  as
illustrated in the accompanying table.


                                       4





                                                    As of March 31, 2005
                                             ----------------------------------------
                                                 Gross     Reinsurance       Net
                      Hurricane                 Losses      Recoveries      Losses
                      ---------              ------------  ------------  ------------
                                                          (in millions)
                                                                
      Charley (August 13, 2004) ...........  $       50.9  $       40.9  $       10.0
      Frances (September 3, 2004) .........          41.3          31.3          10.0
      Ivan (September 14, 2004) ...........          14.2            --          14.2
      Jeanne (September 25, 2004) .........          10.8            --          10.8
                                             ------------  ------------  ------------
      Total Loss Estimate .................  $      117.2  $       72.2  $       45.0
                                             ============  ============  ============



      Furthermore,  as a  result  of the  2004  hurricanes,  we  incurred  a net
reinstatement  insurance  premium  of $3.0  million  that is  amortized  through
operations from the reinstatement date of August 13, 2004 to June 30, 2005.


AS A RESULT OF THE HURRICANES  STRIKING FLORIDA IN AUGUST AND SEPTEMBER 2004, WE
WERE NOT IN COMPLIANCE WITH CERTAIN REGULATORY REQUIREMENTS.


      To retain  our  certificates  of  authority,  Florida  insurance  laws and
regulations require that our insurance company subsidiaries,  Federated National
and American  Vehicle,  maintain  capital surplus equal to the greater of 10% of
its liabilities or the 2004 statutory minimum capital and surplus requirement of
$4.00 million as defined in the Florida Insurance Code. As of December 31, 2004,
Federated  National  was not in  compliance  with its  requirement  to  maintain
minimum capital surplus  primarily based on the incurred losses  associated with
the four  hurricanes  that  occurred  in August and  September  2004.  Under the
provisions  afforded  Federated  National  according  to  Statement of Statutory
Accounting   Principles  No  72  titled  "Surplus  and   Quasi-reorganizations",
compliance  with this  provision was restored by way of a surplus  infusion from
21st Century.  American  Vehicle  remains in compliance  with statutory  minimum
capital and surplus  requirement.  The insurance  companies are also required to
adhere to prescribed premium-to-capital surplus ratios. As of December 31, 2004,
Federated National did not comply with the prescribed premium-to-capital surplus
ratio,  primarily  based  on  the  incurred  losses  associated  with  the  four
hurricanes  that occurred in August and  September  2004.  Under the  provisions
afforded  Federated  National  according to  Statement  of Statutory  Accounting
Principles No 72, compliance with this provision was also restored and we do not
currently  anticipate any regulatory  action  relative to this matter.  American
Vehicle  remains in  compliance  with  statutory  minimum  capital  and  surplus
requirement.

WE  REQUESTED  THAT A.M.  BEST CEASE  RATING OUR  INSURANCE  SUBSIDIARIES.  AS A
RESULT,  WE MAY BE  UNABLE TO WRITE OR RENEW  DESIRABLE  INSURANCE  POLICIES  OR
OBTAIN ADEQUATE  REINSURANCE,  WHICH WOULD LIMIT OR HALT OUR GROWTH AND HARM OUR
BUSINESS.

      Third-party rating agencies assess and rate the ability of insurers to pay
their  claims.  These  financial  strength  ratings  are  used by the  insurance
industry to assess the financial strength and quality of insurers. These ratings
are based on criteria established by the rating agencies and reflect evaluations
of each insurer's  profitability,  debt and cash levels, customer base, adequacy
and  soundness of  reinsurance,  quality and  estimated  market value of assets,
adequacy of reserves, and management.  Ratings are based upon factors of concern
to  agents,  reinsurers  and  policyholders  and are  not  directed  toward  the
protection of investors, such as purchasers of our common stock.


                                       5


      In August 2004, A.M. Best Company notified us that Federated  National and
American Vehicle were being placed under review with negative  implications.  In
2003 A.M. Best had assigned  Federated National a B rating ("Fair," which is the
seventh of 14 rating  categories) and American Vehicle a B+ rating ("Very Good,"
which is the sixth of 14 rating categories).  In connection with this review, we
requested  that A.M.  Best  cease its  ratings of these  subsidiaries  "NR-4 Not
rated,  company's request". The withdrawal of our ratings could limit or prevent
us from  writing  or  renewing  desirable  insurance  policies,  from  obtaining
adequate  reinsurance,  or from  borrowing  on our line of credit,  as described
below.   Federated  National  and  American  Vehicle  are  currently  rated  "A"
("Unsurpassed," which is first of six ratings) by Demotech, Inc.

IF WE ARE UNABLE TO CONTINUE OUR GROWTH  BECAUSE OUR CAPITAL MUST BE USED TO PAY
GREATER THAN ANTICIPATED CLAIMS, OUR FINANCIAL RESULTS MAY SUFFER.

      We have grown  rapidly  over the last few years.  Our future  growth  will
depend on our ability to expand the types of insurance products we offer and the
geographic  markets  in which we do  business.  We believe  that our  company is
sufficiently  capitalized  to operate  our  business  as it now exists and as we
currently plan to expand it. Our existing sources of funds include our revolving
loan from Flatiron  Funding  Company LLC,  sales of our  securities  such as our
September 2004 and July 2003 private  placements of $12,500,000  and $7,500,000,
respectively, of our senior subordinated notes, possible sales of our investment
securities,  and  our  earnings  from  operations  and  investments.  Unexpected
catastrophic  events in our market areas, such as the hurricanes  experienced in
Florida in August and September  2004,  have resulted and will result in greater
claims  losses than  anticipated,  which  could  require us to limit or halt our
growth while we redeploy our capital to pay these unanticipated claims unless we
are able to raise  additional  capital or  increase  our  earnings  in our other
divisions.

THE  MAXIMUM  CREDIT  COMMITMENT  UNDER OUR  REVOLVING  LOAN COULD BE SUBJECT TO
REDUCTION, WHICH WOULD ADVERSELY AFFECT OUR AVAILABLE WORKING CAPITAL.

      During  September  2004, we negotiated a new revolving  loan  agreement in
which the maximum credit  commitment  available to us was reduced at our request
to $2.0  million with  built-in  options to  incrementally  increase the maximum
credit  commitment  up $4.0 million  over the next three years.  We believe that
this available credit is sufficient based on our current operations.

      Pursuant  to our loan  agreement,  if the A.M.  Best  rating of  Federated
National falls below a "C," or if the financial  condition of American  Vehicle,
as  determined  by our lender (in its sole and  absolute  discretion)  suffers a
material  adverse change,  then under the terms of our loan agreement,  policies
written by that  subsidiary will no longer be eligible  collateral,  causing our
available credit to be reduced if we do not have other collateral  qualifying as
eligible  collateral.  As of December  31, 2004,  policies  written by Federated
National were not considered by our lender to be eligible  collateral.  In March
2005, our lender agreed to permit policies  written by Federated  National to be
eligible  collateral  up to $165,000.  We currently  believe that our  available
credit  under  this  loan  agreement  will be  sufficient  based on our  current
operations.  If  policies  written by our  insurance  subsidiaries  again do not
qualify as eligible  collateral  under our loan agreement and we are not able to
obtain working capital from our operations or other sources,  then we would have
to restrict our growth and, possibly, our operations.


                                       6


WE ARE SUBJECT TO SIGNIFICANT GOVERNMENT REGULATION,  WHICH CAN LIMIT OUR GROWTH
AND INCREASE OUR EXPENSES, THEREBY REDUCING OUR EARNINGS.

      We are subject to laws and regulations in Florida,  our state of domicile,
and in  Georgia,  Louisiana,  Kentucky  and Texas,  states in which we have been
authorized to do business, and will be subject to the laws of any other state in
which we conduct  business in the future.  These laws and regulations  cover all
aspects of our business and are  generally  designed to protect the interests of
insurance  policyholders.  For  example,  these laws and  regulations  relate to
licensing   requirements,   authorized   lines  of  business,   capital  surplus
requirements,  allowable rates and forms,  investment  parameters,  underwriting
limitations, restrictions on transactions with affiliates, dividend limitations,
changes in control, market conduct, and limitations on premium financing service
charges.  The cost to monitor  and comply with these laws and  regulations  adds
significantly to our cost of doing business.  Further,  if we do not comply with
the laws and  regulations  applicable  to us, we may be subject to  sanctions or
monetary penalties by the applicable insurance regulator.

OUR REVENUES AND OPERATING PERFORMANCE MAY FLUCTUATE WITH BUSINESS CYCLES IN THE
PROPERTY AND CASUALTY INSURANCE INDUSTRY.

      Historically,  the  financial  performance  of the  property  and casualty
insurance industry has tended to fluctuate in cyclical patterns characterized by
periods  of  significant  competition  in  pricing  and  underwriting  terms and
conditions,  which is known as a "soft" insurance market, followed by periods of
lessened  competition and increasing  premium rates,  which is known as a "hard"
insurance  market.   Although  an  individual   insurance   company's  financial
performance  is  dependent  on its own specific  business  characteristics,  the
profitability of most property and casualty insurance  companies tends to follow
this cyclical market pattern,  with profitability  generally  increasing in hard
markets  and  decreasing  in soft  markets.  At  present,  we are  beginning  to
experience a soft market in our automobile  sector while a hard market  persists
in our  property  sector.  We cannot  predict,  however,  how long these  market
conditions will persist. In the current soft automobile market,  increased price
competition may cause us to have to reduce our premiums in order to maintain our
market share, which would result in a decrease in our automobile revenues.

WE MAY NOT  OBTAIN THE  NECESSARY  REGULATORY  APPROVALS  TO EXPAND THE TYPES OF
INSURANCE PRODUCTS WE OFFER OR THE STATES IN WHICH WE OPERATE.

      We  currently  have  applications  pending in  California  and Virginia to
underwrite  and sell  commercial  general  liability  insurance.  The  insurance
regulators in these states may request additional information, add conditions to
the license that we find unacceptable, or deny our application. This would delay
or  prevent  us from  operating  in that  state.  If we want to  operate  in any
additional states, we must file similar applications for licenses,  which we may
not be successful in obtaining.


                                       7


ALTHOUGH WE FOLLOW THE INDUSTRY  PRACTICE OF  REINSURING A PORTION OF OUR RISKS,
OUR COSTS OF  OBTAINING  REINSURANCE  HAVE  INCREASED  AND WE MAY NOT BE ABLE TO
SUCCESSFULLY ALLEVIATE RISK THROUGH REINSURANCE ARRANGEMENTS.

      We  have  a  reinsurance  structure  that  is  a  combination  of  private
reinsurance and the Florida  Hurricane  Catastrophe  Fund. For each catastrophic
occurrence,  the excess of loss treaty  will insure us for $24 million  with the
Company  retaining  the first $10 million of loss and loss  adjustment  expense.
There are two layers involved with our excess of loss reinsurance treaties,  the
$24 million is considered the first layer. The treaty has a provision which, for
an  additional  prorated  premium will insure us for another $24 million of loss
and  loss  adjustment  expense  for  subsequent  occurrences  with  the  Company
retaining the first $10 million in loss and loss adjustment expense. As a result
of the  loss  and  loss  adjustment  expense  incurred  in  connection  with the
Hurricanes Charles and Frances,  the Company has exhausted its recoveries of $48
million under the terms of this treaty.

      The second layer of our excess of loss treaty insures us for an additional
$34 million in excess of the $34  million  first layer noted above with the same
reinstatement provision. The excess of loss treaties expire on June 30, 2005 and
the Company is negotiating a new reinsurance treaty.

      The Florida Hurricane  Catastrophe Fund treaty provides protection for 90%
of loss and loss adjustment expense and attaches at approximately $36.2 million.
This  treaty  inures to the  benefit of our excess of loss treaty and expires on
June 1, 2005.


      Since our initial  preliminary  provision for losses from these hurricanes
of $33 million,  net of  reinsurance  recoveries,  as of September  30, 2004, we
revised our provision for losses as described above. Because the storms occurred
during  the  third  quarter  of  2004,  we were not  able to  complete  physical
inspections  of a  sufficiently  large  percentage of claims,  nor were complete
repair  estimates  available.  During the  fourth  quarter of 2004 and the first
quarter of 2005, as physical  property  inspections  and repair  estimates  were
completed,  our initial  estimates of losses for these storms were  increased to
reflect  increased  estimates of claim severity on our  homeowners'  policies in
Florida.  We do not currently  anticipate further material increases to our loss
estimates from the 2004 hurricanes.


      As a result  of the  hurricanes  experienced  in  Florida  in  August  and
September  2004,  however,  we will review,  and may  determine  to modify,  our
reinsurance structure.

      The  insolvency  of our primary  reinsurer or any of our other  current or
future reinsurers,  or their inability  otherwise to pay claims,  would increase
the  claims  that we must pay,  thereby  significantly  harming  our  results of
operations.   In  addition,   prevailing  market  conditions  have  limited  the
availability and increased the cost of reinsurance, which may have the effect of
increased costs and reduced profitability.


                                       8


OUR LOSS RESERVES MAY BE  INADEQUATE  TO COVER OUR ACTUAL  LIABILITY FOR LOSSES,
CAUSING OUR RESULTS OF OPERATIONS TO BE ADVERSELY AFFECTED.


      We maintain reserves to cover our estimated ultimate  liabilities for loss
and loss  adjustment  expense.  These reserves are estimates based on historical
data  and  statistical  projections  of  what  we  believe  the  settlement  and
administration of claims will cost based on facts and  circumstances  then known
to  us.  Actual  losses  and  loss  adjustment   expense,   however,   may  vary
significantly  from our  estimates.  For example,  after we compared our reserve
levels to our actual claims for the prior years,  we decreased our liability for
loss and loss  adjustment  expense  by  $1,430,278  in 2004  and  increased  our
liability for loss and loss  adjustment  expense by  $1,234,047  in 2003.  These
adjustments  primarily reflect our loss experience under our personal automobile
policies.  

      Unpaid losses and loss  adjustment  expense  decreased  $19.8 million,  or
42.5%, to $26.8 million as of March 31, 2005, as compared to $46.6 million as of
December  31, 2004.  The decline in unpaid  losses and loss  adjustment  expense
relates to our payment  patterns  relative to the settling of  hurricane-related
claims.

      Factors that affect unpaid losses and loss adjustment  expense include the
estimates made on a claim-by-claim  basis known as "case reserves"  coupled with
bulk  estimates  known as "incurred  but not  reported."  Periodic  estimates by
management of the ultimate costs required to settle all claim files are based on
our  analysis  of  historical  data and  estimations  of the impact of  numerous
factors such as (i) per claim information;  (ii) company and industry historical
loss  experience;  (iii)  legislative  enactments,   judicial  decisions,  legal
developments in the awarding of damages, and changes in political attitudes; and
(iv) trends in general economic conditions,  including the effects of inflation.
Management  revises its  estimates  based on the results of its  analysis.  This
process  assumes  that past  experience,  adjusted  for the  effects  of current
developments and anticipated  trends, is an appropriate basis for estimating the
ultimate  settlement of all claims.  There is no precise method for subsequently
evaluating  the impact of any specific  factor on the adequacy of the  reserves,
because the eventual redundancy or deficiency is affected by multiple factors.


      Because of the  uncertainties  that surround  estimated loss reserves,  we
cannot be certain that our reserves will be adequate to cover our actual losses.
If our  reserves  for unpaid  losses and loss  adjustment  expense are less than
actual losses and loss adjustment  expense,  we will be required to increase our
reserves with a corresponding reduction in our net income in the period in which
the deficiency is identified.  Future loss experience substantially in excess of
our reserves for unpaid losses and loss adjustment  expense could  substantially
harm our results of operations and financial condition.

WE CURRENTLY RELY ON INDEPENDENT AGENTS TO WRITE OUR INSURANCE POLICIES,  AND IF
WE ARE NOT ABLE TO ATTRACT AND RETAIN INDEPENDENT  AGENTS, OUR REVENUES WOULD BE
NEGATIVELY AFFECTED.

      We  currently  market  and  distribute  Federated   National's,   American
Vehicle's and third-party  insurers'  products and our other services  through a
network of approximately  1,500 independent  agents.  Our independent agents are
our primary source for our property insurance policies.  Many of our competitors
also  rely on  independent  agents.  As a result,  we must  compete  with  other
insurers for independent  agents' business.  Our competitors may offer a greater
variety of insurance products,  lower premiums for insurance coverage, or higher
commissions  to their agents.  If our products,  pricing and  commissions do not
remain  competitive,  we may find it more  difficult  to attract  business  from
independent  agents  and to attract  franchisees  for our  agencies  to sell our
products.  A material  reduction in the amount of our products that  independent
agents sell would negatively affect our revenues.

NONSTANDARD  AUTOMOBILE INSURANCE  HISTORICALLY HAS A HIGHER FREQUENCY OF CLAIMS
THAN STANDARD  AUTOMOBILE  INSURANCE,  THEREBY INCREASING OUR POTENTIAL FOR LOSS
EXPOSURE  BEYOND  WHAT WE WOULD BE  LIKELY  TO  EXPERIENCE  IF WE  OFFERED  ONLY
STANDARD AUTOMOBILE INSURANCE.

      Nonstandard  automobile  insurance,  which is second only to our  property
insurance  product,  is provided to insureds that are unable to obtain preferred
or standard  insurance  coverage  because of their  payment  histories,  driving
records, age, vehicle types, or prior claims histories.  This type of automobile
insurance  historically  has a higher frequency of claims than does preferred or
standard automobile  insurance  policies,  although the average dollar amount of
the claims is usually smaller under nonstandard insurance policies. As a result,
we are exposed to the  possibility  of increased loss exposure and higher claims
experience  than  would  be the  case if we  offered  only  standard  automobile
insurance.


                                       9


FLORIDA'S PERSONAL INJURY PROTECTION  INSURANCE STATUTE CONTAINS PROVISIONS THAT
FAVOR  CLAIMANTS,  CAUSING US TO  EXPERIENCE  A HIGHER  FREQUENCY OF CLAIMS THAN
MIGHT OTHERWISE BE THE CASE IF WE OPERATED ONLY OUTSIDE OF FLORIDA.

      Florida's personal injury protection insurance statute limits an insurer's
ability  to  deny  benefits  for  medical  treatment  that is  unrelated  to the
accident, that is unnecessary,  or that is fraudulent.  In addition, the statute
allows claimants to obtain awards for attorney's fees. Although this statute has
been amended several times in recent years,  primarily to address  concerns over
fraud,  the  Florida   legislature  has  been  only  marginally   successful  in
implementing  effective mechanisms that allow insurers to combat fraud and other
abuses. We believe that this statute contributes to a higher frequency of claims
under  nonstandard  automobile  insurance  policies in  Florida,  as compared to
claims under standard  automobile  insurance policies in Florida and nonstandard
and standard automobile  insurance polices in other states.  Although we believe
that we have  successfully  offset these  higher  costs with premium  increases,
because of competition,  we may not be able to do so with as much success in the
future.

OUR  BUSINESS  STRATEGY  IS TO AVOID  COMPETITION  IN OUR  AUTOMOBILE  INSURANCE
PRODUCTS  BASED ON PRICE TO THE EXTENT  POSSIBLE.  THIS STRATEGY,  HOWEVER,  MAY
RESULT IN THE LOSS OF BUSINESS IN THE SHORT TERM.

      Although our pricing of our  automobile  insurance  products is inevitably
influenced  to some  degree by that of our  competitors,  we believe  that it is
generally not in our best interest to compete solely on price,  choosing instead
to compete on the basis of underwriting  criteria, our distribution network, and
our superior  service to our agents and  insureds.  With  respect to  automobile
insurance in Florida, we compete with more than 100 companies,  which underwrite
personal automobile insurance. Comparable companies which compete with us in the
personal  automobile  insurance market include  Affirmative  Insurance Holdings,
Inc.,  which recently  acquired our non-standard  automobile  agency business in
Florida,  U.S. Security Insurance Company,  United Automobile Insurance Company,
Direct General  Insurance Company and Security National  Insurance  Company,  as
well  as  major  insurers  such  as  Progressive   Casualty  Insurance  Company.
Comparable  companies  which compete with us in the  homeowners'  market include
Florida Family Insurance  Company,  Florida Select Insurance  Company,  Atlantic
Preferred Insurance Company and Vanguard Insurance Company. Comparable companies
which compete with us in the general liability  insurance market include Century
Surety Insurance Company,  Atlantic Casualty Insurance Company, Colony Insurance
Company and Burlington/First  Financial Insurance  Companies.  Competition could
have a  material  adverse  effect on our  business,  results of  operations  and
financial condition. If we do not meet the prices offered by our competitors, we
may lose  business  in the short  term,  which  could  also  result  in  reduced
revenues.

OUR  INVESTMENT  PORTFOLIO  MAY SUFFER  REDUCED  RETURNS OR LOSSES,  WHICH WOULD
SIGNIFICANTLY REDUCE OUR EARNINGS.

      As do other insurance  companies,  we depend on income from our investment
portfolio  for a  substantial  portion  of our  earnings.  During  the time that
normally  elapses  between the receipt of insurance  premiums and any payment of
insurance  claims,  we  invest  the  funds  received,  together  with our  other
available   capital,   primarily  in   fixed-maturity   investments  and  equity
securities,  in order to generate  investment  income. A significant  decline in
investment yields in our investment portfolio caused by fluctuations in interest
rates or volatility  in the stock market,  or a default by issuers of securities
that we own, could  adversely  affect the value of our investment  portfolio and
the returns that we earn on our  portfolio,  thereby  substantially  harming our
financial condition and results of operations.


                                       10



      Net investment  income  increased by $0.4 million or 69.1% to $0.9 million
for the three months  ended March 31, 2005,  as compared to $0.5 million for the
three months ended March 31, 2004. The increase in investment income is a result
of the  additional  amounts of invested  assets.  Our overall  investment  yield
increased  to 4.35% for the three  months  ended March 31, 2005 as compared to a
yield of 3.82% for the three months ended March 31, 2004.

      Net realized  investment  gains  increased by $0.04 million,  or 30.8%, to
$0.16  million for the three months  ended March 31, 2005,  as compared to $0.12
million for the three months ended March 31, 2004.


OUR PRESIDENT AND CHIEF EXECUTIVE OFFICER ARE KEY TO THE STRATEGIC  DIRECTION OF
OUR  COMPANY.  IF WE WERE TO LOSE THE  SERVICES OF EITHER OF THEM,  OUR BUSINESS
COULD BE HARMED.

      We depend,  and will  continue  to depend,  on the  services of one of our
founders and principal shareholders, Edward J. Lawson, who is also our president
and  chairman  of the  board,  as well as Richard  Widdicombe,  who is our chief
executive  officer.  We have entered into an employment  agreement  with each of
them and we maintain $3 million and $1 million in key man life  insurance on the
lives of Mr. Lawson and Mr. Widdicombe,  respectively.  Nevertheless, because of
Mr.  Lawson's  and Mr.  Widdicombe's  role and  involvement  in  developing  and
implementing our current business strategy, the loss of either of their services
could substantially harm our business.

RISKS RELATED TO AN INVESTMENT IN OUR SHARES

THE TRADING OF OUR  WARRANTS  MAY  NEGATIVELY  AFFECT THE TRADING  PRICES OF OUR
COMMON STOCK IF INVESTORS PURCHASE AND EXERCISE THE WARRANTS TO FACILITATE OTHER
TRADING STRATEGIES, SUCH AS SHORT SELLING.

      Our  warrants  currently  trade on the Nasdaq  National  Market  under the
symbols "TCHCW" and "TCHCZ." Each of the TCHCW warrants  entitles the holders to
purchase  three  quarters of one share of our common stock at an exercise  price
per  whole  share  of  $12.74  after  giving  effect  to  the   September   2004
three-for-two  stock split.  Each of the TCHCZ warrants  entitles the holders to
purchase one share of our common stock at an exercise price per share of $12.75.
Investors may purchase and exercise  warrants to facilitate  trading  strategies
such as short  selling,  which  involves the sale of securities not yet owned by
the  seller.  In a short sale,  the seller  must  either  purchase or borrow the
security in order to complete the sale.  If shares of our common stock  received
upon the  exercise of warrants are used to complete  short sales,  this may have
the effect of reducing the trading price of our common stock.


                                       11


OUR LARGEST SHAREHOLDERS CURRENTLY CONTROL APPROXIMATELY 22% OF THE VOTING POWER
OF OUR  OUTSTANDING  COMMON STOCK,  AND AFTER SELLING THE SHARES COVERED BY THIS
PROSPECTUS  WILL CONTROL  APPROXIMATELY  18%, WHICH COULD  DISCOURAGE  POTENTIAL
ACQUIRORS AND PREVENT CHANGES IN MANAGEMENT.

      Edward J. Lawson and Michele V. Lawson  beneficially own approximately 22%
of our  outstanding  common  stock.  After  selling  the shares  covered by this
prospectus,  they will  beneficially  own  approximately  18% of our outstanding
common  stock.  As  our  largest  shareholders,  the  Lawsons  have  significant
influence  over the  outcome of any  shareholder  vote.  This  voting  power may
discourage  takeover  attempts,  changes in our officers and  directors or other
changes in our corporate governance that other shareholders may desire.

WE HAVE AUTHORIZED BUT UNISSUED  PREFERRED  STOCK,  WHICH COULD AFFECT RIGHTS OF
HOLDERS OF COMMON STOCK.

      Our articles of  incorporation  authorize the issuance of preferred  stock
with  designations,  rights and preferences  determined from time to time by our
board of directors.  Accordingly,  our board of directors is empowered,  without
shareholder  approval,  to issue preferred  stock with  dividends,  liquidation,
conversion,  voting or other rights that could adversely affect the voting power
or other rights of the holders of common stock. In addition, the preferred stock
could be issued as a method of discouraging a takeover  attempt.  Although we do
not  intend  to issue  any  preferred  stock at this  time,  we may do so in the
future.

OUR ARTICLES OF INCORPORATION AND BYLAWS AND FLORIDA LAW MAY DISCOURAGE TAKEOVER
ATTEMPTS AND MAY RESULT IN ENTRENCHMENT OF MANAGEMENT.

      Our  articles of  incorporation  and bylaws  contain  provisions  that may
discourage takeover attempts and may result in entrenchment of management.

      o     Our board of directors is elected in classes, with only two or three
            of the directors elected each year. As a result,  shareholders would
            not be able to change the membership of the board in its entirety in
            any one year.  Shareholders  would  also be  unable to bring  about,
            through  the  election of a new board of  directors,  changes in our
            officers.

      o     Our articles of incorporation  prohibit  shareholders from acting by
            written  consent,  meaning  that  shareholders  will be  required to
            conduct  a  meeting  in order to vote on any  proposals  or take any
            action.

      o     Our bylaws require at least 60 days' notice if a shareholder desires
            to submit a proposal for a shareholder  vote or to nominate a person
            for election to our board of directors.

In  addition,  Florida  has  enacted  legislation  that may  deter or  frustrate
takeovers of Florida corporations, such as our company.

                                       12


      o     The Florida  Control  Share Act provides  that shares  acquired in a
            "control share  acquisition"  will not have voting rights unless the
            voting  rights  are  approved  by a  majority  of the  corporation's
            disinterested  shareholders.  A "control  share  acquisition"  is an
            acquisition,  in  whatever  form,  of  voting  power  in  any of the
            following  ranges:  (a) at least  20% but less than  33-1/3%  of all
            voting  power,  (b) at least 33-1/3% but less than a majority of all
            voting power; or (c) a majority or more of all voting power.

      o     The  Florida  Affiliated  Transactions  Act  requires  supermajority
            approval  by   disinterested   shareholders  of  certain   specified
            transactions  between a public  corporation and holders of more than
            10% of the  outstanding  voting shares of the  corporation (or their
            affiliates).

AS A HOLDING  COMPANY,  WE DEPEND ON THE EARNINGS OF OUR  SUBSIDIARIES AND THEIR
ABILITY TO PAY  MANAGEMENT  FEES AND  DIVIDENDS  TO THE  HOLDING  COMPANY AS THE
PRIMARY SOURCE OF OUR INCOME.

      We are an insurance  holding company whose primary assets are the stock of
our  subsidiaries.  Our  operations,  and our ability to service  our debt,  are
limited by the earnings of our  subsidiaries and their payment of their earnings
to us in the form of management fees, commissions, dividends, loans, advances or
the  reimbursement  of  expenses.  These  payments  can be made  only  when  our
subsidiaries have adequate earnings.  In addition,  dividend payments made to us
by our  insurance  subsidiaries  are  restricted  by Florida law  governing  the
insurance  industry.  Generally,  Florida  law limits the  dividends  payable by
insurance  companies  under  complicated  formulas  based  on  the  subsidiary's
available capital and earnings.


      We received  management fees from our  subsidiaries,  excluding  Federated
National and American  Vehicle,  totaling  $300,000  during the first quarter of
2005 and $2.0 million during each of 2004 and 2003.

      No dividends were declared or paid by our insurance  subsidiaries  in 2004
or 2003. Under these laws, neither Federated National nor American Vehicle would
be permitted to pay dividends to 21st Century in 2005.  Whether our subsidiaries
will be able to pay dividends in 2005 depends on the results of their operations
and their expected needs for capital. We do not anticipate that our subsidiaries
will begin to pay dividends to the parent company during 2005.


                    NOTE REGARDING FORWARD-LOOKING STATEMENTS

      Statements in this  prospectus or in documents  incorporated  by reference
that are not historical  fact are  forward-looking  statements.  Forward-looking
statements  are  subject to certain  risks and  uncertainties  that could  cause
actual  events and results to differ  materially  from those  discussed  herein.
Without  limiting the generality of the foregoing,  words such as "may," "will,"
"expect,"  "believe,"  "anticipate,"  "intend," "could," "would," "estimate," or
"continue" or the negative other  variations  thereof or comparable  terminology
are intended to identify forward-looking statements. The risks and uncertainties
include,  but are not limited to, the risks and uncertainties  described in this
prospectus or from time to time in our filings with the SEC.


                                       13


                                 USE OF PROCEEDS

      We will not receive any  proceeds  from the resale of the common  stock by
the selling shareholders.

                            SELLING SECURITY HOLDERS

      The  following  tables  show  certain  information  as of the date of this
prospectus  regarding  the number of shares of common stock owned by the selling
shareholders  and  that are  included  for sale in this  prospectus.  The  table
assumes that all shares offered for sale in the prospectus are sold.

      Edward J. Lawson is  currently  our  Chairman of the Board and  President.
Michele V. Lawson is Mr. Lawson's spouse and is currently employed by us.



                             OWNERSHIP OF                                            OWNERSHIP OF
                             COMMON STOCK                                            COMMON STOCK
                          BEFORE OFFERING(1)             NUMBER OFFERED            AFTER OFFERING(1)
SELLING            -----------------------------------     BY SELLING     -----------------------------------
SHAREHOLDER            NUMBER              PERCENT         SHAREHOLDER        NUMBER              PERCENT
-----------------  ---------------     ---------------   ---------------  ---------------     ---------------
                                                                               
Edward J. Lawson           789,216                12.3%          150,000          639,216                10.0%*
Michele V. Lawson          631,746(2)              9.9%          150,000          481,746(2)              7.6%*


-------------------
      (1) Includes  shares issuable upon exercise of options held by the selling
      shareholder,  as follows:  66,324  shares  underlying  options held by Mr.
      Lawson and 20,676 shares underlying options held by Ms. Lawson.
      (2) Also includes 25,425 shares held as custodian for a minor child.

                      HOW THE SECURITIES MAY BE DISTRIBUTED

      Edward J. Lawson our President  and Chairman of the Board,  and Michele V.
Lawson, Mr. Lawson's spouse, are offering to sell from time to time, pursuant to
this prospectus, up to an aggregate of 300,000 shares of our common stock.

      With  respect to the shares  covered by this  prospectus  that may be sold
from  time to time by Mr.  and Mrs.  Lawson,  they  intend to offer and sell the
shares only to institutional investors, including but not limited to hedge funds
and other investment  companies,  in transactions  negotiated directly with such
investors.


                                       14


      When selling shares,  the selling  shareholders  intend to comply with the
prospectus  delivery  requirements  under the  Securities  Act, by  delivering a
prospectus to each purchaser.  We may file any supplements,  amendments or other
necessary  documents in compliance  with the Securities Act that may be required
in the event a selling  shareholder  defaults under any customer  agreement with
brokers.

      The selling shareholders and any other party, including  broker-dealers or
agents,  that participate with a selling  shareholder in the distribution of the
shares may be deemed to be  "underwriters"  within the meaning of the Securities
Act in connection with such sales. In that event, any commissions  received by a
party and any profit on the resale of the shares purchased by them may be deemed
to be underwriting commissions or discounts under the Securities Act.

      Under the  securities  laws of certain  states,  the shares may be sold in
those states only through  registered or licensed  broker-dealers.  In addition,
the shares may not be sold unless the shares have been  registered  or qualified
for sale in the  relevant  state or unless the shares  qualify for an  exemption
from registration or qualification.

      We  have  agreed  to  pay  all  of  our  out-of-pocket  expenses  and  our
professional fees and expenses  incident to the registration of the shares.  The
selling  shareholders will pay selling  commissions,  if any, in connection with
the sale of their shares.

      The  selling   shareholders   and  other  persons   participating  in  the
distribution of the securities  offered under this prospectus are subject to the
applicable  requirements  of Regulation M promulgated  under the Exchange Act in
connection with sales of the shares.


                                       15


                                 LEGAL MATTERS

      Broad and  Cassel,  a  partnership  including  professional  associations,
Miami,  Florida,  is giving an opinion  regarding  the  validity  of the offered
shares of common stock.

                                     EXPERTS

      The  financial  statements of 21st Century  Holding  Company for the years
ended December 31, 2004 and December 31, 2003, incorporated by reference in this
prospectus,  have been audited by De Meo, Young, McGrath,  independent certified
public accountants,  to the extent and for the periods set forth in their report
incorporated  herein by reference,  and are incorporated herein in reliance upon
such  reports  given upon the  authority of said firm as experts in auditing and
accounting.

                       WHERE YOU CAN FIND MORE INFORMATION

      We have  filed  a  registration  statement  on Form  S-3  with  the SEC in
connection  with this  offering.  This  prospectus  does not  contain all of the
information set forth in the registration  statement,  as permitted by the rules
and regulations of the SEC. This  prospectus may include  references to material
contracts or other  material  documents of ours; any summaries of these material
contracts or documents are complete and are either  included in this  prospectus
or incorporated by reference into this prospectus. You may refer to the exhibits
that  are  part of the  registration  statement  for a copy of the  contract  or
document.

      We also file annual,  quarterly and current reports and other  information
with the SEC.  You may read and copy any  report or  document  we file,  and the
registration  statement,  including the exhibits,  may be inspected at the SEC's
public reference room located at 450 Fifth Street, N.W., Washington, D.C. 20549.

      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 http://www.sec.gov.

      Quotations  for the  prices  of our  common  stock  appear  on the  Nasdaq
National  Market,  and  quotations  for our  warrants  will appear on the Nasdaq
National  Market if and when  trading in the  warrants  begins.  Reports,  proxy
statements and other  information  about us can also be inspected at the offices
of the National  Association of Securities Dealers,  Inc., 1735 K Street,  N.W.,
Washington, D.C. 20006.

                INCORPORATION OF CERTAIN INFORMATION BY REFERENCE

      The  following   documents  are   incorporated   by  reference  into  this
prospectus:

      o     Our  Current  Reports  on Form 8-K filed  with the SEC on January 6,
            2005, January 20, 2005,  February 4, 2005, March 9, 2005, and May 5,
            2005,


      o     Our  Quarterly  Report on Form 10-Q for the quarter  ended March 31,
            2005, filed with the SEC on May 16, 2005,


      o     Our Annual Report on Form 10-K for the year ended December 31, 2004,
            filed with the SEC on March 31, 2005,


                                       16


      o     Amendment No. 1 on Form 10-K/A to our Annual Report on Form 10-K for
            the year ended  December 31,  2004,  filed with the SEC on April 29,
            2005, and

      o     The  description of our common stock  contained in our  registration
            statement  on Form 8-A filed with the SEC on October  28,  1998,  as
            this description may be updated in any amendment to the Form 8-A.

      In addition,  all documents filed by us pursuant to Sections 13(a), 13(c),
14 or 15(d) of the  Securities  Exchange  Act of 1934,  other  than  information
furnished  pursuant to Items 2.02,  7.01 or 9.01 of Form 8-K,  after the date of
this  prospectus  and prior to the  filing of a  post-effective  amendment  that
indicates  that  all  securities  registered  hereby  have  been  sold  or  that
deregisters  all  securities  then  remaining  unsold,  shall  be  deemed  to be
incorporated  by reference into this prospectus and to be a part hereof from the
date of filing of such  documents  with the SEC.  Any  statement  contained in a
document  incorporated  by  reference  herein  shall be deemed to be modified or
superseded  for  purposes  of this  prospectus  to the extent  that a  statement
contained herein, or in a subsequently filed document  incorporated by reference
herein,  modifies or  supersedes  that  statement.  Any statement so modified or
superseded  shall  not be  deemed,  except  as so  modified  or  superseded,  to
constitute part of this prospectus.

      You may obtain a copy of these filings,  excluding all exhibits  unless we
have specifically  incorporated by reference an exhibit in this prospectus or in
a  document  incorporated  by  reference  herein,  at no  cost,  by  writing  or
telephoning:

            21st Century Holding Company
            3661 West Oakland Park Boulevard, Suite 300
            Lauderdale Lakes, Florida 33311
            Attention:  J. Gordon Jennings, III, Chief Financial Officer
            Telephone: (954) 581-9993

      Our file number under the Securities Exchange Act of 1934 is 0-2500111.

                    INDEMNIFICATION OF DIRECTORS AND OFFICERS

      We  have  authority  under  Section   607.0850  of  the  Florida  Business
Corporation  Act to indemnify our directors and officers to the extent  provided
for in that law. Our articles of incorporation provide that we may insure, shall
indemnify and shall advance  expenses on behalf of our officers and directors to
the fullest extent not prohibited by law. We also are a party to indemnification
agreements with each of our directors and officers.

      The SEC is of the opinion that indemnification of directors,  officers and
controlling  persons for liabilities arising under the Securities Act is against
public policy and is, therefore, unenforceable.


                                       17


                                     PART II

                     INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

      The  Registrant  estimates  that its  expenses  in  connection  with  this
registration statement will be as follows:

      SEC registration fee ..............  $      453.38
      Accounting fees and expenses ......       5,000.00
      Legal fees and expenses ...........       5,000.00
      Miscellaneous .....................       1,546.62
                                           -------------

                       Total ............  $   12,000.00
                                           =============

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

      The  Registrant  has  authority  under  Section  607.0850  of the  Florida
Business  Corporation  Act to indemnify its directors and officers to the extent
provided for in such law.  The  Registrant's  Amended and  Restated  Articles of
Incorporation  provide that the Registrant may insure, shall indemnify and shall
advance  expenses on behalf of its officers and directors to the fullest  extent
not  prohibited  by law.  The  Registrant  is also a  party  to  indemnification
agreements with each of its directors and officers.

ITEM 16. EXHIBITS.

      4.1   Specimen of Common Stock Certificate(1)

      4.2   Form of 6% Senior Subordinated Note due July 31, 2006(2)

      4.3   Form of Redeemable Warrant dated July 31, 2003(2)

      4.4   Unit Purchase  Agreement dated July 31, 2003 between the Company and
            the  Purchasers  of the 6%  Senior  Subordinated  Notes due July 31,
            2006(3)

      4.5   Amendment  to  Unit  Purchase  Agreement  and  Registration   Rights
            Agreement  dated  October  15,  2003  between  the  Company  and the
            Purchasers of the 6% Senior Subordinated Notes(4)

      4.6   Form of 6% Senior Subordinated Note due September 30, 2007(5)

      4.7   Form of Redeemable Warrant dated September 30, 2004(5)

      4.8   Unit Purchase Agreement dated September 30, 2004 between the Company
            and the Purchasers of the 6% Senior Subordinated Notes due September
            30, 2007(5)


                                      II-1


      5.1   Opinion of Broad and Cassel(6)

      23.1  Consent  of Broad  and  Cassel  (included  in its  opinion  filed as
            Exhibit 5.1)(6)


      23.2  Consent of De Meo, Young, McGrath(6)

      24.1  Power of Attorney(7)


------------------
(1)   Previously filed as an exhibit to the Registrant's  Registration Statement
      on Form SB-2 (File No. 333-63623) and incorporated herein by reference.

(2)   Previously filed as exhibits to the Registrant's  Quarterly Report on Form
      10-Q for the  quarter  ended  June 30,  2003 and  incorporated  herein  by
      reference.

(3)   Previously filed as an exhibit to the Registrant's  Registration Statement
      on Form S-3 (File No. 333-109313) and incorporated herein by reference.

(4)   Previously  filed as an exhibit  to  Amendment  No. 1 to the  Registrant's
      Registration  Statement on Form S-3 (File No. 333-108739) and incorporated
      herein by reference.

(5)   Previously filed as exhibits to the Registrant's Registration Statement on
      Form S-3 (File No. 333-120157) and incorporated herein by reference.


(6)   Filed herewith.

(7)   Included on page II-4 of the Registration Statement as originally filed.


ITEM 17. UNDERTAKINGS.

The undersigned Registrant hereby undertakes:

(1)   To file,  during any  period in which  offers or sales are being  made,  a
      post-effective amendment to this registration statement:

      (a)   To  include  any  prospectus  required  by section  10(a)(3)  of the
            Securities Act of 1933, as amended;

      (b)   To reflect in the  prospectus  any facts or events arising after the
            effective  date of the  registration  statement  (or the most recent
            post-effective  amendment  thereof)  which,  individually  or in the
            aggregate,  represent a fundamental  change in the  information  set
            forth in the registration statement; and

      (c)   To include  any  material  information  with  respect to the plan of
            distribution not previously disclosed in the registration  statement
            or any  material  change  to such  information  in the  registration
            statement.


                                      II-2


(2)   That,  for the purpose of determining  any liability  under the Securities
      Act of 1933,  each such  post-effective  amendment shall be deemed to be a
      new registration statement relating to the securities offered therein, and
      the  offering  of such  securities  at that time shall be deemed to be the
      initial bona fide offering thereof.

(3)   To remove from registration by means of a post-effective  amendment any of
      the securities  being registered which remain unsold at the termination of
      the offering.

      The  undersigned  Registrant  hereby  undertakes  that,  for  purposes  of
determining  any liability  under the Securities Act of 1933, each filing of the
Registrant's  annual  report  pursuant to Section  13(a) or Section 15(d) of the
Securities  Exchange  Act of 1934  (and,  where  applicable,  each  filing of an
employee  benefit  plan's  annual  report  pursuant  to  Section  15(d)  of  the
Securities  Exchange  Act of 1934)  that is  incorporated  by  reference  in the
registration  statement  shall  be  deemed  to be a new  registration  statement
relating to the securities offered therein,  and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

      Insofar as  indemnification  for liabilities  arising under the Securities
Act of 1933 may be permitted to directors,  officers and controlling  persons of
the  Registrant  pursuant  to  the  foregoing  provisions,   or  otherwise,  the
Registrant has been advised that in the opinion of the SEC such  indemnification
is against  public  policy as  expressed in the  Securities  Act of 1933 and is,
therefore,  unenforceable. In the event that a claim for indemnification against
such liabilities  (other than the payment by the Registrant of expenses incurred
or paid by a director,  officer or  controlling  person of the registrant in the
successful  defense of any  action,  suit or  proceeding)  is  asserted  by such
director,  officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been  settled by  controlling  precedent,  submit to a court of  appropriate
jurisdiction the question whether such  indemnification  by it is against public
policy as  expressed in the  Securities  Act of 1933 and will be governed by the
final adjudication of such issue.


                                      II-3


                                   SIGNATURES


      Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies  that it has  reasonable  grounds to believe  that it meets all of the
requirements  for  filing  on Form S-3 and has  duly  caused  this  Registration
Statement  to be  signed  on its  behalf  by  the  undersigned,  thereunto  duly
authorized,  in the City of Lauderdale Lakes,  State of Florida on this 20th day
of May, 2005.


                                        21ST CENTURY HOLDING COMPANY


                                        By: /s/ Richard A. Widdicombe
                                           -------------------------------------
                                           Richard A. Widdicombe,
                                           Chief Executive Officer


      Pursuant  to the  requirements  of the  Securities  Act  of  1933,  to the
Registration  Statement  has  been  signed  by  the  following  persons  in  the
capacities and on the date indicated.



SIGNATURES                             TITLE                                        DATE
-----------------------------------    ------------------------------------         ------------------
                                                                              



*
-----------------------------------    Chairman of the Board of Directors           May 20, 2005
Edward J. Lawson                       And President


/s/ Richard A. Widdicombe
-----------------------------------    Chief Executive Officer and Director         May 20, 2005
Richard A. Widdicombe                  (Principal Executive Officer)


*
-----------------------------------    Chief Financial Officer (Principal           May 20, 2005
James Gordon Jennings, III             Financial and Accounting Officer)


*
-----------------------------------    Director                                     May 20, 2005
Bruce Simberg


*
-----------------------------------    Director                                     May 20, 2005
Carl Dorf


*
-----------------------------------    Director                                     May 20, 2005
Charles B. Hart, Jr.


*
-----------------------------------    Director                                     May 20, 2005
Peter J. Prygelski


-----------------------------------    Director                                     May __, 2005
Richard W. Wilcox, Jr.


*By: /s/ Richard A. Widdicombe
     -----------------------------------
     Richard A. Widdicombe, Attorney-in-Fact


                                      II-4


                                  EXHIBIT INDEX


            EXHIBIT     DESCRIPTION
            -------     -----------
             5.1        Opinion of Broad and Cassel

            23.1        Consent of Broad and Cassel
                        (included in its opinion filed as Exhibit 5.1)


            23.2        Consent of De Meo, Young McGrath