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                                                                    EXHIBIT 10.1

                                    April 19, 2006

Mr. Donald Sherman
11428 Sandy Creek Crossing
Fort Wayne, Indiana 46804

Dear Don:

     Following up on our discussions, this letter will outline the key terms of
your employment with Delphi Financial Group, Inc. ("DFG")

     You will be the President and Chief Operating Officer of DFG, reporting to
me. In connection with your assuming this position, I will, effective as of
today's date, step down from the office of President but will retain my titles
of Chairman of the Board and Chief Executive Officer.

     Your annualized base salary for 2006 will be $755,000. You will be eligible
for annual cash bonus awards beginning in 2006, the amount of which will, in
order to ensure its full tax deductibility by the Company, be contingent on the
attainment of certain objective 2006 performance criteria adopted by the Stock
Option and Compensation Committee (the "Committee") of the DFG Board of
Directors (the "Board"). You will also be eligible to receive annual
discretionary awards of restricted share units ("RSUs") relating to DFG Class A
common stock (the "Stock") pursuant to DFG's 2003 Employee Long-Term Incentive
and Share Award Plan (the "Plan"), the terms of which generally provide for
vesting in three equal annual installments beginning on the third anniversary of
the award date. While such bonuses and RSU awards will in all events be subject
to the Committee's discretion, the target level for your cash bonus and RSU
awards will be 70% of the comparable awards to me. However, for the current
year, such awards will be pro-rated to reflect the partial period of service.

     In addition, you will receive, by action of the Committee, a grant of
options to purchase 100,000 shares of the Stock pursuant to the Plan, subject to
the approval, at DFG's 2006 annual meeting of stockholders, of an increase in
the number of shares available for awards under the Plan by 1,000,000. These
options, whose exercise price per share will be equal to the fair market value
of a share of the Stock on the grant date, would vest in five equal annual
installments on the first through fifth anniversary dates of the grant date, and
would be subject to the applicable terms and conditions of the Plan, including,
among others, that the options would vest in their entirety upon a Change in
Ownership, as defined in the Plan.

     Finally, DFG will pay the reasonable expenses associated with your
relocation to New York, including expenses for temporary housing and
commutation.
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Mr. Donald A. Sherman
April 19, 2006
Page 2

     If the foregoing accurately reflects our understanding, please acknowledge
the above by executing both counterparts of this letter where indicated below
and returning one copy to me. We very much look forward to working with you.

                                    Very truly yours,



                                    Robert Rosenkranz
                                    Chairman, President
                                      and Chief Executive Officer


Acknowledged and agreed:


---------------------------
Donald A. Sherman