SEC Form 4

FORM 4		UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934 or Section 30(h) of the Investment Company Act of 1940	OMB APPROVAL OMB Number: 3235-0287 Estimated average burden hours per response: 0.5
	Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

1. Name and Address of Reporting Person* Affirmative Investment LLC (Last) (First) (Middle) 717 FIFTH AVENUE 26TH FLOOR (Street) NEW YORK NY 10022 (City) (State) (Zip)	2. Issuer Name and Ticker or Trading Symbol AFFIRMATIVE INSURANCE HOLDINGS INC [ AFFM ]	5. Relationship of Reporting Person(s) to Issuer (Check all applicable) Director X 10% Owner Officer (give title below) Other (specify below)
	3. Date of Earliest Transaction (Month/Day/Year) 08/31/2006
	4. If Amendment, Date of Original Filed (Month/Day/Year)	6. Individual or Joint/Group Filing (Check Applicable Line) Form filed by One Reporting Person X Form filed by More than One Reporting Person

Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1. Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	3. Transaction Code (Instr. 8)		4. Securities Acquired (A) or Disposed Of (D) (Instr. 3, 4 and 5)			5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4)	6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
			Code	V	Amount	(A) or (D)	Price
Common Stock, par value $.01 per share	08/31/2006		J		0(1)(2)	A(5)	(5)	7,860,927	I(1)(2)(3)(4)	Owned by New Affirmative LLC

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security (Instr. 3)	2. Conversion or Exercise Price of Derivative Security	3. Transaction Date (Month/Day/Year)	3A. Deemed Execution Date, if any (Month/Day/Year)	4. Transaction Code (Instr. 8)		5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5)		6. Date Exercisable and Expiration Date (Month/Day/Year)		7. Title and Amount of Securities Underlying Derivative Security (Instr. 3 and 4)		8. Price of Derivative Security (Instr. 5)	9. Number of derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4)	10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	11. Nature of Indirect Beneficial Ownership (Instr. 4)
				Code	V	(A)	(D)	Date Exercisable	Expiration Date	Title	Amount or Number of Shares

1. Name and Address of Reporting Person* Affirmative Investment LLC (Last) (First) (Middle) 717 FIFTH AVENUE 26TH FLOOR (Street) NEW YORK NY 10022 (City) (State) (Zip) Relationship of Reporting Person(s) to Issuer Director X 10% Owner Officer (give title below) Other (specify below)

1. Name and Address of Reporting Person* Affirmative Associates LLC (Last) (First) (Middle) 717 FIFTH AVENUE 26TH FLOOR (Street) NEW YORK NY 10022 (City) (State) (Zip) Relationship of Reporting Person(s) to Issuer Director X 10% Owner Officer (give title below) Other (specify below)

1. Name and Address of Reporting Person* Flowers J Christopher (Last) (First) (Middle) 717 FIFTH AVENUE 26TH FLOOR (Street) NEW YORK NY 10022 (City) (State) (Zip) Relationship of Reporting Person(s) to Issuer Director X 10% Owner Officer (give title below) Other (specify below)

Explanation of Responses:

1. The amount reported represents 7,860,927 shares of Common Stock of Affirmative Insurance Holdings, Inc. that are owned beneficially and of record by New Affirmative LLC ("NAL"). Affirmative Investment LLC, NAL, J. Christopher Flowers and Affirmative Associates LLC may be deemed to be part of a group for the purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended, and the rules promulgated thereunder (the "Exchange Act"), to beneficially own the 7,860,927 shares of Common Stock of Affirmative Insurance Holdings, Inc. that are beneficially owned by NAL.

2. On August 31, 2006, Affirmative Investment LLC purchased a 50% membership interest in NAL held by DSC AFFM LLC and became the sole member of NAL. Affirmative Investment and NAL disclaim beneficial ownership of the reported securities except to the extent of any pecuniary interest therein, and the inclusion of these securities in this report shall not be deemed an admission that they have beneficial ownership of such securities for purposes of Section 16 of the Exchange Act, or for any other purposes.

3. Affirmative Associates LLC does not hold any pecuniary interest in Affirmative Investment LLC or in the reported securities. However, Affirmative Associates LLC is the managing member of Affirmative Investment LLC and has shared control over the voting and disposition of the reported securities. Affirmative Associates LLC disclaims beneficial ownership of the reported securities, and the inclusion of these securities in this report shall not be deemed to be admission that Affirmative Associates LLC has beneficial ownership of such securities for purposes of Section 16 of the Exchange Act, or for any other purposes.

4. J. Christopher Flowers holds an indirect interest in the reported securities through a pecuniary interest in, and his indirect control of, J.C. Flowers I LP, a Delaware limited partnership. J.C. Flowers I LP owns a 93% membership interest in Affirmative Investment LLC. Mr. Flowers is also the sole managing member of Affirmative Associates LLC, which is the manager of Affirmative Investment LLC, which is the managing member of NAL. Mr. Flowers therefore controls Affirmative Investment LLC, Affirmative Associates LLC and NAL. Mr. Flowers disclaims beneficial ownership of the reported securities except to the extent of any pecuniary interest therein, and the inclusion of these securities in this report shall not be deemed to be an admission that Mr. Flowers has beneficial ownership of such securities for purposes of Section 16 of the Exchange Act, or for any other purposes.

5. Not applicable

	Affirmative Investment LLC--Avshalom Kalichstein	08/31/2006
	Affirmative Associates LLC--Avshalom Kalichstein	08/31/2006
	J. Christopher Flowers--J. Christopher Flowers	08/31/2006
	** Signature of Reporting Person	Date
Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
* If the form is filed by more than one reporting person, see Instruction 4 (b)(v).
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