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                                                                   EXHIBIT 10-12

            SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT


            SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT dated as
of December 11, 1997 ("Second Amendment") among THE NAVIGATORS GROUP, INC. (the
"Borrower"), BROWN BROTHERS HARRIMAN & CO., ("BBH&Co."), NBD BANK (formerly NBD
BANK, N .A.; "NBD"), FIRST UNION NATIONAL BANK (formerly First Union National
Bank of North Carolina; "FUNB") (each of BBH&Co., NBD and First Union a "Lender"
and, collectively, the "Lenders"), THE FIRST NATIONAL BANK OF CHICAGO, as issuer
of Letters of Credit (as defined in the Credit Agreement referred to below)
("Issuing Bank") and BROWN BROTHERS HARRIMAN & CO., as agent for the Lenders and
the Issuing Bank (in such capacity, together with its successors and assigns in
such capacity, the "Agent").

            PRELIMINARY STATEMENT. Reference is made to the Amended and Restated
Credit Agreement dated as of November 26, 1996 among the Borrower, the Lenders,
the Issuing Bank and the Agent, as amended by the First Amendment to the Amended
and Restated Credit Agreement dated as of April 9, 1997 (as so amended, the
"Credit Agreement"). Any term used herein and not otherwise defined herein shall
have the meaning assigned to such term in the Credit Agreement.

            Each of the parties hereto have agreed to amend certain provisions
of the Credit Agreement as hereinafter set forth.

            SECTION 1. Amendments to Credit Agreement. The Credit Agreement is,
effective as of this date hereof and subject to the satisfaction of the
conditions precedent set forth in Section 2 hereof, hereby amended as follows:

            (a) The definition of "Revolving Credit Commitment" is amended in
its entirety to read as follows:

            "Revolving Credit Commitment" means for each period specified below
the amount specified for such period:

<TABLE>
<CAPTION>
                Period                                       Amount
                ------                                       ------
<S>                                                       <C>
From December 11, 1997 to and                             $25,000,000
including December 31, 1997

From January 1, 1998 to and including                      $24,500,000
March 31, 1998

From April 1, 1998 to and including                        $24,000,000
</TABLE>
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<TABLE>
<CAPTION>
                Period                                       Amount
                ------                                       ------
<S>                                                       <C>
June 30, 1998

From July 1,1998 to and including                          $23,500,000
September 30, 1998

From October 1, 1998 to and including                      $23,000,000
December 31, 1998

From January 1, 1999 to and including                     $22,500,000
March 31, 1999

From April 1, 1999 to and including                        $22,000,000
June 30, 1999

From July 1, 1999 to and including                         $21,500,000
September 30, 1999

From October 1, 1999 to and including                      $20,000,000
December 31, 1999

From January 1, 2000 to and including                      $18,000,000
March 31, 2000

From April 1, 2000 to and including                        $16,000,000
June 30, 2000

From July 1, 2000 to and including                         $14,000,000
September 30, 2000

From October 1, 2000 to and including                      $12,000,000
December 31, 2000

From January 1, 2001 to and including                      $11,250,000
March 31, 2001

From April 1, 2001 to and including                        $10,500,000
June 30, 2001

From July 1, 2001 to and including                         $ 9,750,000
September 30, 2001

From October 1, 2001 to and including                      $ 9,000,000
December 31, 2002

From January 1, 2003 to and including                      $ 7,000,000
March 31, 2003

From April 1, 2003 to and including                        $ 5,250,000
June 30, 2003

From July 1, 2003 to and including                         $ 3,500,000
September 30, 2003

From October 1, 2003 to and including                      $ 1,750,000
December 31, 2003
</TABLE>

            (b) The definition of "Revolving Credit Termination Date" is amended
in its entirety to read as follows:

            "Revolving Credit Termination Date" means December 31, 2003.


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            (c) Section 10.01, Events of Default, is amended by deleting clause
"(13)" thereof in its entirety.

            SECTION 2. Conditions of Effectiveness. This Second Amendment shall
become effective on the date on which each of the following conditions has been
fulfilled:

            (1) Second Amendment. The Borrower, the Lenders, the Issuing Bank
and the Agent shall each have executed and delivered this Second Amendment;

            (2) Amendment Fee. The Borrower shall pay to the Agent for the
benefit of the Lenders an amendment fee in an amount equal to $35,000.00.

            (2) Officer's Certificate, etc. The following statements shall be
true and the Agent shall have received a certificate signed by a duly authorized
officer of the Borrower dated the date hereof stating that, after giving effect
to this Second Amendment and the transactions contemplated hereby:

            (a)   The representations and warranties contained in the Credit
                  Agreement and in each of the Loan Documents are correct on and
                  as of the date hereof as though made on and as of such date;
                  and

            (b)   No Default or Event of Default has occurred and is continuing.

            (6) Additional Documentation. The Agent shall have received such
other approvals, opinions or documents as any Lender or the Issuing Bank may
reasonably request.

            SECTION 3. Reference to and Effect on the Loan Documents. (a) Upon
the effectiveness of Section 1 hereof, on and after the date hereof each
reference in the Credit Agreement to "this Agreement", "hereunder", "hereof",
"herein" or words of like import, and each reference in the other Loan Documents
the Credit Agreement, shall mean and be a reference to the Credit Agreement
previously amended and as amended hereby.

            (b) Except as specifically amended above, the Credit Agreement and
all other Loan Documents shall remain in full force and effect and are hereby
ratified and confirmed.

            (c) The execution, delivery and effectiveness of this Second
Amendment shall not operate as a waiver of any right, power or remedy of the
Lenders, the Issuing Bank or the Agent under any of the Loan Documents, nor
constitute a waiver of any provision of any of the Loan Documents.

             SECTION 4. Costs, Expenses and Taxes. The Borrower agrees to pay
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Lenders, the Issuing Bank or the Agent under any of the Loan Documents, nor
constitute a waiver of any provision of any of the Loan Documents.

            SECTION 4. Costs, Expenses and Taxes. The Borrower agrees to pay on
demand all costs and expenses of the Agent in connection with the preparation,
reproduction, execution and delivery of this Second Amendment and the other
instruments and documents to be delivered hereunder (including the fees and
out-of-pocket expenses of external counsel for the Agent, but not the legal fees
for internal or external legal counsel of the Lenders), with respect thereto.
In addition, the Borrower shall pay any and all stamp and other taxes and fees
payable or determined to be payable in connection with the execution and
delivery, filing or recording of this Second Amendment and the other instruments
and documents to be delivered hereunder, and agrees to hold the Agent and each
Lender harmless from and against any and all liabilities with respect to or
resulting from any delay in paying or omission to pay such taxes or fees.

            SECTION 5. Governing Law. This Second Amendment shall be governed by
and construed in accordance with the laws of the State of New York applicable to
agreements made and to be performed entirely within such State.

            SECTION 6. Headings. Section headings in this Second Amendment are
included herein for convenience of reference only and shall not constitute a
part of this Second Amendment for any other purpose.

            SECTION 7. Counterparts. The Second Amendment may be executed by the
parties hereto in separate counterparts, each of which, when so executed and
delivered, shall be an original, but all such counterparts shall together
constitute one and the same instrument.

            IN WITNESS WHEREOF, the parties hereto have caused this Second
Amendment to be executed by their respective officers thereunto duly authorized
as of the date first above written.


                                     THE NAVIGATORS GROUP, INC.,
                                      as Borrower



                                     By /s/ Bradley D. Wiley
                                        ---------------------------
                                        Name: Bradley D. Wiley
                                        Title: Sr VP, CFO & Secretary


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