Kingsway Financial Services Inc. has called a special shareholders’ meeting to be held on Feb. 10, 2009, the specialty insurance company announced Tuesday.

The meeting was requested by Joseph Stilwell who together with his associates, New York-based money management firm Stilwell Group, own more than 5% of Kingsway’s common shares.

Stilwell Group has called the meeting for the stated purpose of removing two existing members of the Kingsway board of directors — Michael Walsh, non-executive chairman of the board and Shaun Jackson, president and CEO of Kingsway — and replacing them with two of their own nominees.

Representatives of the board and Mississauga-based Kingsway met with the Stilwell Group on Nov. 22, and discussed Stilwell Group’s “non-negotiable” demand for the removal of Jackson from the board.

On behalf of the Kingsway board, Thomas Di Giacomo, stated: “The board believes that the Stilwell Group’s position with regard to convening a special meeting and the removal of either Mr. Walsh or Mr. Jackson is not in the best interest of all shareholders. The Stilwell Group’s requisition will cost the company significant time and expense during a period when the company is in the midst of implementing initiatives which are actually consistent with the recommendations of the Stilwell Group. We will be urging shareholders to vote against the Stilwell Group’s request.”

Di Giacomo noted the September 2008 sale of under-performing, non-core asset York Fire & Casualty Insurance Co., for $95 million, and the termination of a substantial number of underperforming programs, primarily at Lincoln General, as actions taken by Kingsway to enhance shareholder value.

Kingsway is one of the largest non-standard automobile insurers and truck insurers in North America.