EXHIBIT 10(b)

                              POLICY AND CLAIMS

                        PROCESSING SERVICES AGREEMENT

 This Processing  Services  Agreement,  effective as  of  September  1,  2003
 ("Effective Date"), is  by and among  CGI Information  Systems &  Management
 Consultants, Inc. ("CGI"), with a principal place of business at 300 Burnett
 Sweet,  Fort   Worth,  TX   76102,  Phoenix   Indemnity  Insurance   Company
 ("Phoenix"), with a principal place of  business at 14651 N Dallas Pkwy  Ste
 400, Dallas,  TX  75254,  collectively referred  to  as  the  "Parties"  and
 individually referred  to  as a  "Party."  Phoenix  is referred  to  as  the
 "Client." This Processing  Services Agreement, together  with the  Schedules
 and  Statements  of  Work  referenced   herein  and  attached  hereto,   are
 collectively referred to as the "Agreement".

 This Agreement supercedes  any and all  other prior  agreements between  the
 Parties hereto relating to  services provided by CGI  or its predecessor  in
 interest, to or on behalf of  Phoenix Indemnity Insurance Company  including
 but not limited  to that  certain letter  of understanding  between CGI  and
 Hallmark Financial Services dated February 17, 2003.


                             Chapter 1 ARTICLE 1.

                        Chapter 2 SERVICES; TERM; FEES

 1.1  Services.  CGI agrees to  provide the services set  forth on Schedule 1
   ("Initial Services")  to the Client according to the terms and  conditions
   set forth  in this  Agreement.  In addition to the  Initial Services,  CGI
   will  provide  to  the Client  such  other  services  as  the  Client  may
   reasonably request in writing from  lime to time during the Term and  with
   respect  to  which the  Parties  agree  regarding the  scope,  nature  and
   pricing of such  services and the time  period during which such  services
   will be  provided ("Additional Services").  The Initial  Services and  the
   Additional  Services  are  sometimes  referred  to  collectively  as   the
   "Services."

 1.2  Additional Services. Additional Services shall be performed under  this
   Agreement by  either executing an  additional Schedule or  a Statement  of
   Work ("SOW").

   a) Additional Schedules.  An additional Schedule is to be used if and when
      the Client  and CGI  agree on  additional, on-going  business  services
      that CGI  will perform for  the client.  The services, service  levels,
      the  fee  for  the  services,  and  any  special  conditions  will   be
      documented  in  the  Schedule.   Each  Schedule  will  reference   this
      Agreement and will be numbered sequentially.

   b) Statements of Work.  From time to  time, the Client  may elect to  have
      CGI perform work that is not  within the scope of the services  defined
      in any  Schedule. Such work  will be documented  and agreed  to by  the
      Parties using an  SOW. Service requests shall  be in writing, and  upon
      mutual  agreement  between  the  parties,  shall  be  attached  to  and
      incorporated into  this  Agreement as  a  separate SOW  specifying  the
      start date  and duration  of the service  request, the services  to  be
      performed and any deliverables to be furnished by CGI.  Each  SOW shall
      reference this Agreement and will be numbered sequentially.

 1.3  Service Levels. CGI agrees to make a commercially reasonable effort  to
   achieve  the service  levels  documented in  Schedule  1 for  the  Initial
   Services and  any service levels  documented in  additional Schedules  for
   Additional Services.

 1.4  Term. The term during  which CGI will provide  the Initial Services  to
   Client will commence upon  the Effective Date and will expire on  November
   30, 2003  ("Expiration Date"), unless extended  or terminated pursuant  to
   the  terms of  this Agreement.  If  services defined  in any  SOW  extends
   beyond  the Expiration Date,  this Agreement will  extend, for only  those
   services,  until  such  time  as  the  services  or  service  request   is
   completed.

 1.5  Service Fees and Payments.

 a)  Service  Fees.  During  the  Term,  Client  will  pay  to  CGI  for  the
   performance of the Initial Services  the fees set forth in Schedule 1  and
   the fees for Additional Services  established in either a Schedule  or SOW
   ("Service Fees").

 b)  Payment.  CGI will invoice Client within 15 days  after the  end of  the
   month for services rendered during the prior month. Client will remit  all
   payments due to  CGI for services  rendered within 15  days  of receipt of
   such invoice.

 c)  Interest  on Past Due Payments. Any undisputed sum due  CGI pursuant  to
   this Agreement  that is not  paid within 15  days of when  payment is  due
   shall bear interest from that date until the date such sum is paid at  the
   lesser of 1.5  percent per month or the  maximum rate of interest  allowed
   by applicable law. Client will  also pay CGI for any reasonable  expenses,
   including  attorney's  fees,  incurred  by  CGI  in  the collection of any
   amounts due and payable under this Agreement.

 d)  Payment Disputes.  Any disagreement between the parties with respect  to
   payments and  amounts due and owing shall be  notified to the other  party
   and the parties shall  initially meet to resolve any such dispute. If  the
   parties are  unable to resolve the dispute  within five (5) business  days
   of the initial meeting, either party may submit such claim to  arbitration
   pursuant to the disputes clause specified in Section 9.  In the event that
   there  is  an  amount  in  dispute,  Client  remains  obligated to pay all
   undisputed amounts.

 e)  Electronic Funds  Transfer.  CGI   will  provide  Client  bank   routing
   information. All payments are  to be via Electronic Funds Transfer  (BET),
   unless  otherwise agreed  to in  writing by  the parties,  to the  account
   specified in writing by CGI.

 1.6  Unanticipated and Increased Service Level Changes. Each Party agrees to
   negotiate in  good faith for  an adjustment to  the Services  Fees in  the
   event  of any  statutory,  regulatory  or judicial  changes  that  require
   either  additional activities  not  then  provided for  pursuant  to  this
   Agreement or reduce or lessen the activities then provided.

 1.7  Taxes.  Client shall be responsible for any tariffs and taxes,  however
   designated  or levied,  now existing  or imposed  in the  future that  are
   applicable  to the  Services. Such  tariffs and  taxes include  state  and
   local privilege  and excise taxes,  sales taxes, and  any other tariff  or
   tax based on Services performed.

 1.8  Travel. If approved by Client in writing, CGT personnel will  undertake
   reasonable travel  necessary  for the  performance  of the  Services.  CGI
   personnel  will  make travel  arrangements  and  incur  reasonable  travel
   expenses necessary for performance  of the Services pursuant to the  terms
   of CGI's then current Travel  and Expense Policy. Expenses will be  billed
   to  the  Client  at  cost.  Travel  fees  will  be  invoiced  monthly   as
   appropriate.


                                  ARTICLE 2

  REPRESENTATION AND WARRANTIES OF CLIENT

 Client represents and warrants that the statements contained in this Article
 are correct and complete as of the Effective Date.

 2.1  Corporate  Status;  Qualification.   Client  is   a  corporation   duly
   organized, validly  existing and in  good standing under  the laws of  the
   State  of Arizona.  There is  no pending  or, to  the Client's  knowledge,
   threatened  proceeding for  the  dissolution, liquidation,  insolvency  or
   rehabilitation of  Client. Client is duly  qualified and in good  standing
   as  a   foreign  entity  under  the   laws  of  each  jurisdiction   where
   qualification  is required, except  where the lack  of such  qualification
   would not have a material adverse effect.

 2.2  Corporate Power  and  Authority. Client  has  the corporate  power  and
   authority  to  execute   and  deliver  this  Agreement,  to  perform   its
   obligations  hereunder and  to  consummate the  transactions  contemplated
   hereby. Client has taken  all corporate action necessary to authorize  its
   execution  and  delivery  of  this  Agreement,  the  performance  of   its
   obligations   hereunder  and   the   consummation  of   the   transactions
   contemplated hereby.

 2.3  Enforceability. This Agreement has been duly executed and delivered  by
   Client  and constitutes a  legal, valid and  binding obligation of  Client
   enforceable  against it in  accordance with the  terms of this  Agreement,
   except as  the same may be  limited by applicable bankruptcy,  insolvency,
   reorganization, moratorium  or similar laws  affecting the enforcement  of
   creditors'  rights generally and  general equitable principles  regardless
   of whether such enforceability is considered in a proceeding at law or  in
   equity.


                                  ARTICLE 3

                    REPRESENTATIONS AND WARRANTIES OF CGI

 CGI  represents  and  warrants that the statements contained in this Article
 are correct and complete as of the Effective Date.

 3.1  Corporate Status; Qualification. CGI  is a corporation duly  organized,
    validly existing and in  good standing  under the  laws of  the State  of
    Delaware.  There  is  no pending  or,  to  CGI's  knowledge,   threatened
    proceeding for the dissolution, liquidation, insolvency or rehabilitation
    of CGI.  CGI is duly qualified  and in good standing  as a foreign entity
    under the laws  of  each jurisdiction  where qualification  is  required,
    except where the lack  of such qualification  would not  have a  material
    adverse effect.

 3.2  Corporate  Power  and  Authority.  CGI  has  the  corporate  power  and
    authority  to  execute  and  deliver  this  Agreement,  to  perform   its
    obligations hereunder  and to  consummate the  transactions  contemplated
    hereby. CGI  has taken all  corporate action necessary  to authorize  its
    execution  and  delivery  of  this  Agreement,  the  performance  of  its
    obligations  hereunder   and  the   consummation  of   the   transactions
    contemplated hereby.

 3.3 Enforceability.  This Agreement has been duly executed and delivered  by
    CGI  and  constitutes a  legal,  valid  and  binding  obligation  of  CGI
    enforceable against it  in accordance with the  terms of this  Agreement,
    except as the same  may be limited by applicable bankruptcy,  insolvency,
    reorganization, moratorium or similar  laws affecting the enforcement  of
    creditors' rights generally  and general equitable principles  regardless
    of whether such  enforceability is considered in  a proceeding at law  or
    in equity.


                                  ARTICLE 4

                           PERFORMANCE OF SERVICES

 4.1   Designated Representative.  Each Party  will appoint  an individual (a
    "Designated  Representative")  who  will  (a)  oversee  and  manage   the
    performance of its obligations  under this Agreement, (Ii) serve as  such
    Party's primary managerial point of contact with the other Party and  (c)
    be authorized  to  act for  it and  on  its behalf  with respect  to  all
    matters relating to this Agreement.

 4.2  Access to Records  and Facilities. CGL  will provide Client  reasonable
    access to  its facilities  and  all books,  records  and accounts,  in  a
    format readable by  the Client and  necessary to  verify compliance  with
    this Agreement. Such  access will be  made available  upon prior  written
    notice during normal business  hours for the Term  of this Agreement  and
    during the periods in  which CGI  is required  to maintain such  records.
    CGI will provide  the appropriate state  insurance department  reasonable
    access to its facilities  and all necessary  books, records and  accounts
    in a  form usable  by  such department.  Client remains  responsible  for
    ensuring that all  persons given access  comply with the  confidentiality
    provisions of Article V.

 4.3 Ownership of Property.

    a) Client's Property. Client will own all  right, title, and interest  in
       and to the  content of the  data, output, files,  and computer  images
       created or developed in connection with, as a result of or incident to
       the performance of the  Services. Unless otherwise explicitly  stated,
       nothing herein shall  be deemed  a transfer  of any  fights in  Client
       property to CGI.

    b) CGI'S  Property. Subject to the immediately  foregoing paragraph,  CGI
       will own  all right,  title  and  interest in  and  to  any  and   all
       intellectual  property, including, but not  limited to,  any  and  all
       tools,   techniques,   processes,  procedures,  inventions,  software,
       patents, know how,  trade secrets and copyrights,  that it owned prior
       to  the  Effective  Date, independent of this  Agreement, and that are
       first discovered, created or developed by CGI in connection with, as a
       result  of  or incident to  the performance  of the  Services.  Unless
       otherwise explicitly stated, nothing herein shall be deemed a transfer
       of any rights in CGI property to Client.

 4.4  Client Responsibilities. Client acknowledges that GUI's performance of
    the Services requires the  support and  cooperation of  Client. As  such,
    Client agrees to cooperate with  CGI, and will  perform the  duties in  a
    timely  manner.  Client  will  provide   any  information,  data   and/or
    documentation (collectively, "Data") that  CGI reasonably  requests  from
    Client that  is necessary  for CGI to  properly perform  its  obligations
    hereunder. Such Data shall  be provided by Client in the form and by  the
    dates mutually  agreed upon,  and shall  be kept  confidential by  CGI in
    accordance with this  Agreement. To  reduce  the possibility  of  delays,
    errors or inaccuracies, CGI agrees to promptly assess such Data  received
    from Client  with respect  to the accuracy and usability  thereof and  to
    notify Client within a commercially reasonable timeframe not to exceed 10
    business days or other mutually  agreed upon timeframe  of any  resultant
    impact on CGI performance of the Services.  Thereafter, CGI shall not  be
    liable for  any  Client  caused  delays,  errors  or  inaccuracies,   the
    potential for which proper notification was given to Client. CGI shall be
    entitled to appropriate adjustments (pricing, scheduling, etc.) resulting
    from such delays, errors or inaccuracies. In the event that Client  fails
    to perform  its duties  in  a  timely  manner  and  such  delays  require
    modifications related to  CGI's performance  of  the Services,  then  any
    costs associated therewith shall be the responsibility of Client and  CGI
    shall be entitled to  appropriate adjustments resulting from such failure
    by Client.

 4.5  Maintenance of Documents and Files. During the Term, CGI will  maintain
    appropriate documents and files as  required. CGI will not destroy  these
    documents and  files  without the  written  permission of  Client  for  a
    period of at least  ten years from  the loss or  termination date of  the
    applicable policy, or  the period specified  by the  applicable state  or
    federal statute regulating preservation of records, whichever is  longer.
    CGI may, at  its discretion, use  magnetic, optical, and  other types  of
    technology to store such data.

 4.6  Commercially Reasonable Efforts. Each  Party will use its  commercially
    reasonable efforts to satisfy its respective obligations hereunder.

 4.7  Insurance. During  the Term,  CGI will  maintain errors  and  omissions
    insurance under  a  current and  paid  up  policy, effective  as  of  the
    Effective Date,  issued by an  insurer reasonably  acceptable to  Client,
    which insurance will have a policy  limit of no less than $5,000,000  and
    a deductible no greater than $500,000. If CGI fails to maintain  coverage
    or incurs  a lapse in  coverage, Client  may purchase  tail coverage  (at
    CGI's expense) in the  amount set forth herein.  CGI will provide a  copy
    of said  insurance policy  to Client  and annually  provide to  Client  a
    certificate of insurance issued  by CGI's carrier.  Client will be  named
    as an additional insured to CGI's errors and omissions policy.


                                  ARTICLE 5

                               CONFIDENTIALITY

 5.1 Definitions.  For  purposes  of  this Article the following  definitions
     will apply:

   a) "Affiliate" means a  company that has a 50% or more ownership  interest
      in  another company or a  company in which another  company has 50%  or
      more ownership interest.

   b) "Client"   means    Client   and   its    directors,   officers,    and
      Representatives,  but  in  no  circumstances  includes  a  third  party
      competitor of CGI.

   c) "CGI"   means  CGI,   its  Affiliates,   any  parent   corporation   or
      subsidiaries, directors, officers, and Representatives.

   d) "Confidential  Information"  means any  information of  the  Disclosing
      Party, oral  or written, whether prepared by the Disclosing Party,  its
      Representatives  or  otherwise, which  is  furnished to  the  Receiving
      Party in relation to this Agreement. Such information includes, but  is
      not  limited  to,  financial  information,  trade  secrets,  processes,
      inventory,   formulas,  prices,  markets,  employee  lists,   salaries,
      reports,   computer  files,  maps,   drawings,  specifications,   title
      reports, Client information and lists, vendor sources, development  and
      marketing plans, statistical data, forecasts, marketing strategies,  or
      other commercial, technical, strategic or human resources  information,
      and  know  how obtained  from  the foregoing.  The  term  "Confidential
      Information"  does not  include: (a)  information which  is or  becomes
      generally  available  to the  public  other than  as  a result  of  any
      unauthorized  disclosure or any wrongful  acts of the Receiving  Party;
      (b)  information  which is  independently  developed by  the  Receiving
      Party without  the use of Confidential Information from the  Disclosing
      Party; (c) information which is rightfully received from a third  party
      whose  disclosure would not violate  any confidentiality obligation  or
      breach  of any  agreement; or  (d) information  which is  approved  for
      release  by the Disclosing  Party in writing  signed by the  Disclosing
      Party specifying the information to be released.

   e) "Disclosing  Party"  means  Client  or  CGI,  as  the case may be, with
      respect to any Confidential Information provided by  such party  to the
      other party.

   f) "Receiving Party" means Client or CGI, as the case may be, with respect
      to  any  Confidential Information received by such party from the other
      party.

   g) "Representative"  means  any  employee,  agent,  attorney,  accountant,
      financial advisor or other person acting on behalf of a party  under  a
      contractual relationship in connection with this Agreement.

 5.2  Nondisclosure. The Parties hereby agree as follows:

   a) Use  of  Information.  All Confidential Information will be used solely
      for the purpose of  performing  of  the  Services.  In  no  event  will
      Confidential  Information  be  used by any  party  or  person receiving
      Confidential Information for business or competitive purposes.

   b) Confidentiality.  All Confidential Information will  be  kept  strictly
      confidential  by  the  Receiving  Party  and  the  Receiving Party will
      restrict disclosure of Confidential Information to only those employees
      agents and advisors of the Receiving Party who have a need to know such
      information for the purpose of performing the Services.

   c) Disclosure to Representatives.  Representatives of the Receiving  Party
      shall be informed by the Receiving Party of the  confidential nature of
      such information and  the covenant  of confidentiality by the Receiving
      Party  hereunder,  and  they  shall be directed  by the Receiving Party
      to  treat  such  information confidentially.  Before  any disclosure or
      dissemination of any Confidential Information subject to this Agreement
      is made to any person, other than an officer,  director, or employee of
      the Receiving  Party or its  counsel  or  independent  accountant,  the
      person to whom such disclosure is made shall execute a  confidentiality
      and  non-disclosure  agreement in favor of,  and in form acceptable to,
      the Disclosing Party.

 5.3  No  Solicitation.   Each  Party  acknowledges  that  the  other   Party
   makes a  substantial investment in the  training and  development  of  its
   employees  and  each Party  therefore  agrees,  during  the  term of  this
   agreement and for a period of twelve (12) months thereafter, not to  hire,
   either directly or indirectly,  whether though solicitation or  otherwise,
   any employee of  the other Party without  the other Party's prior  express
   written consent. Unless each Party provides express written consent, if  a
   Party hires such an employee within 90 days of that employee's  separation
   from the  former employer, the  acquiring Party agrees  to compensate  the
   other Party in an  amount equal to twelve  (12) months of that  employee's
   annual compensation.

 5.4  Required  Disclosure.  In  the  event   the  Receiving  Party  or   its
   Representatives are  requested or required  in a judicial,  administrative
   or governmental proceeding to  disclose any Confidential Information,  the
   Receiving Party shall cooperate  with the Disclosing Party  and provide it
   with  prompt  notice  of  any  such  request so that  the Disclosing Party
   may  seek  an appropriate  protective   order and/or waive  the  Receiving
   Party's  compliance with the  provisions  of  this Agreement.  If, in  the
   absence of  a  protective order or the  receipt of a waiver hereunder, the
   Receiving Party or its  Representatives are  nonetheless, in  the  opinion
   of  the  Receiving  Party's  attorneys,   legally  required  to   disclose
   Confidential  Information  to  any  tribunal  or  else  stand  liable  for
   contempt or suffer other penalty, the  Receiving  Party may  disclose such
   information  to such  tribunal without  liability hereunder, provided that
   the Receiving Party complies with the notice provisions of this paragraph.

 5.5  Return of Confidential Information. Upon the expiration or  termination
   of this Agreement,  the Receiving Party shall  promptly, and in any  event
   upon request by the Disclosing Party, deliver to the Disclosing Party  all
   Confidential Information, including all written and electronically  stored
   copies in  a form  and by  the  dates mutually  agreed upon.  Neither  the
   Disclosing Party nor its Representatives will retain any copies,  extracts
   or  other  reproductions, in  whole  or  in  part,  of  such  Confidential
   Information except where such  Confidential Information is stored  by  CGI
   as part of its process of copying data for disaster recovery purposes.  At
   the Disclosing Party's request, all documents, memoranda, notes and  other
   writings prepared by the  Receiving Party or its Representatives based  on
   the information in  the Confidential Information, or  which quote from  or
   summarize  any Confidential  Information, will  be  destroyed as  soon  as
   reasonably  practicable,  and  such  destruction  shall  be  certified  in
   writing to the Disclosing Party by an authorized officer of the  Receiving
   Party supervising such destruction.

 5.6  Remedies for  Breach. The  Parties acknowledge  that  a breach  of  the
   covenant of  confidentiality contained in  this Article 5  will result  in
   irreparable and continuing damage to the Disclosing Party for which  there
   will be  no adequate remedy  at law.  hi the event  of any  breach of  the
   covenant  of  confidentiality,  the   Receiving  Party  agrees  that   the
   Disclosing  Party  shall   be  entitled  to   seek  and  obtain   specific
   performance of  the covenants set  forth in section  5.2 and  5.5 of  this
   Agreement by  the Receiving Party,  including, upon  making the  requisite
   showing  that  it  is  entitled  thereto,  provisional  injunctive  relief
   restraining the Receiving Party  from committing such breach, in  addition
   to such other and  further relict including monetary damages, as  provided
   by law.

 5.7  Survival. THE OBLTOATIONS UNDER THIS ARTTCLE 5 WILL CONTINUE AFTER THIS
   AGREEMENT EXPIRES ORTS TERMINATED.


                                  ARTICLE 6

   TRADE SECRET AND PROPRIETARY RIGHTS

 6.1  No  Rights  proprietary  secrets, in to Software. Notwithstanding CGI's
   use  of  its  computer  software  programs, or other trade the performance
   of  the Services,  neither  this Agreement  nor  the  performance  of  any
   Services hereunder will be  construed   as a  grant  of  a  license or any
   other interest in  or to CGI's  computer software programs or other  trade
   secrets.  Further, this Agreement  grants  to  Client  no right to possess
   or  reproduce,  or any other interest in,  any   of the  computer software
   programs  or  other  trade  secrets  used  in  the performance  of  all or
   any  part  of  the Services or  their specifications  in   any tangible or
   intangible  medium. Client may not mortgage,  hypothecate,  sell,  assign,
   pledge,   lease,  transfer,  license,  sublicense,  provide   access   to,
   decompile, or  reverse engineer any computer software  programs  or  other
   trade secrets used in the  performance of all or any part of the Services,
   nor  allow  any  person  or  entity  to  transmit,  copy,  reproduce, use,
   decompile, or  reverse engineer any  such  computer software  programs  or
   other  trade secrets.  In  the  event Client comes into possession of  the
   computer software programs or other trade secrets used in the  performance
   of all or any  part of the Services,  Client  will immediately notify  CGI
   and return such computer software programs or other trade secrets and  all
   copies of any  kind thereof to CGI,  unless such possession is  authorized
   in writing by CGI as part of providing the Services.

 6.2  Nondisclosure. The  Parties  acknowledge  that the  duties  related  to
   protection  of trade  secrets  are often  more  stringent than  those  for
   protection of other forms of proprietary information. Other than  Client's
   employees that  need access to computer  software programs or other  trade
   secrets for the performance  of their duties, Client covenants and  agrees
   not to  disclose or otherwise  make available to  any person any  computer
   software programs or trade secrets  used in the performance of all or  any
   part  of  the  Services.  Client  agrees  to  take  all  reasonable  steps
   necessary to obligate  each of its employees who  is given access to  such
   computer  software programs  or other  trade secrets  to a  level of  care
   sufficient  to protect  the  computer  software programs  or  other  trade
   secrets from  unauthorized disclosure, and to  comply with all  applicable
   laws and regulations pertaining to protection of trade secrets.

 6.3  Survival. THE OBLICIATTON  OF CLIENT UNDER  THIS ARTICLE WILL  CONTINUE
   AFTER THIS AGREEMENT EXPIRES ORTS TERMINATED.


                                  ARTICLE 7

                           TERMTNATION & EXPIRATION

 7.1  Termination of Agreement. This Agreement may be terminated prior to the
   Expiration Date only as follows:

   a) by written notice from the non-breaching  Party upon a material  breach
      by the other Party of its duties or  obligations  under this Agreement;
      provided, however, that (i) such  breach  remains substantially uncured
      for thirty (30) days after  written  notice  specifying  such breach is
      received by the breaching  Party  or (ii) with respect to a breach that
      cannot  be  reasonably  cured  within a thirty (30) day period,  should
      the  defaulting  party fail  to  proceed  within thirty (30) days after
      written  notice specifying the breach to commence curing the breach and
      thereafter  fails  to  proceed  with  all reasonable diligence  to cure
      substantially the breach;

   b) by a Party in the event (I) the other Party makes a  general assignment
      for the benefit of  creditors, (ii) the other  Party files a  voluntary
      petition  in  bankruptcy  or  petitions  for reorganization  or similar
      arrangement under the bankruptcy laws, (iii)  a petition  in bankruptcy
      is filed against the other  Party by  a third  party and  such petition
      is not dismissed within ninety (90) days of its filing date, or (iv)  a
      receiver  or  trustee is appointed for all or  any part of the property
      and assets of the other Party; or

   c) by Client, upon commission by CGI of fraud, criminal conduct or willful
      violation  of an insurance  statute  or  regulation,  if  said  conduct
      by CGI has a material  adverse effect on Client's ability to engage  in
      business. This paragraph does not apply to conduct by CGI employees who
      are not acting at the direction of CGI.

 7.2  Procedure  upon   Expiration  or   Termination.  Upon   expiration   or
   termination of  this Agreement  and in lieu  of any  other arrangement  to
   continue system  processing services:  CGI will  transfer all Client  data
   to the Client via a copy of the most recent backup tape.  CGI will provide
   data in another format  for  a reasonable  and customary fee if requested.

   a) Client  shall  pay  CGI  all  undisputed  amounts  due and owing to CGI
      through the  date  of  termination or expiration in accordance with the
      Payment terms of this Agreement.

   b) Such  expiration or termination will not in any way limit, restrict  or
      relieve any Party of liability for any breach of this Agreement.

   c) The  Parties  recognize  that  upon  termination  of  this   Agreement,
      Client  may require a  continuation of certain  services necessary  for
      winding  down, running off  and/or the smooth  transition of  business.
      Such services shall be provided by  CGI at a price and level of service
      to be mutually agreed upon.

   d) The  parties  agree  that  subrogation  and salvage files will transfer
      to  Client effective October 13, 2003.  Client will pay CGI  25% of the
      subrogation  and 15% of  the salvage for  October 1-12,  2003. For  the
      balance of October, Client will pay a pro-rated amount of the  separate
      subrogation  and salvage fees based on the average of the fees for  the
      months  of  July, August  and September  2003.  The November  fees  for
      subrogation  and salvage will be equal to  the average of the fees  for
      the  months of July, August and September 2003. Any new claim  received
      by  CGI  after October 13, 2003, involving salvage will be  transferred
      to Client for handling of the entire claim.

  e)  Any  adjusting  expense  customarily  incurred,  regardless   of  type,
      initiated,  incurred  or generated  prior  to  the  termination of this
      Agreement  shall  be  the  sole   responsibility   of   CGI.  Customary
      adjustment  expenses include  but are  not limited  to  police reports,
      official  reports  from  local,  state  and  federal  agencies,   motor
      vehicle reports,  appraisals  and  independent  adjuster  fees.   Claim
      adjustment expenses that are not  customarily incurred  by CGT  include
      all  legal expenses  (to include  but not  limited  to  attorney  fees,
      examinations   under    oath,  court    reporter   fees),    engineers,
      reconstruction experts,  other experts, and those expenses incurred  by
      CGI's  special  investigation unit  in  the  investigation of  possible
      fraud.  Conversely,   any  adjusting   expense,  regardless   of  type,
      initiated,  incurred  or  generated   after  the  termination  of  this
      Agreement, shall be the sole responsibility of Client.

   f) Neither Party  will  make any  disparaging  comments, whether  oral  or
      written, about the other Party or the relationship between the Parties.


                    ARTICLE 8 - REMEDIES AND LIMITATION OF
                                  LIABILITY

 8.1  Indemnification of the Parties.  Each  Party  (the  "Indemnitor")  will
    indemnify, defend, and  hold harmless any other Party (the  "Indemnitee")
    from  and against  any arbitration  award,  claim, cost,  damage  demand,
    expense, fine, liability, lawsuit, obligation, payment or penalty of  any
    kind or nature  whatsoever, including any reasonable attorney's fees  and
    expenses (a  "Claim") incurred by  the Indemnitee that  arises out of  or
    directly  relates to  the  Indemnitor's  performance or  breach  of  this
    Agreement or  any Schedule  or Statement of  Work attached  from time  to
    time hereto and made a part hereof, unless the performance or breach  was
    at the written direction  of the other party. Upon Indemnitee's  request,
    the  Indemnitor will  indemnify  the Indemnitee's  directors,  employees,
    officers,  agents, attorneys,  representatives  and shareholders  to  the
    same extent as such Indemnitee. No such person, however, will be a  third
    party  beneficiary of  the indemnification  provision set  forth in  this
    Agreement. To  the extent that an  Indemnitee requests the Indemnitor  to
    indemnify   such   Party's  directors,   employees,   officers,   agents,
    attorneys, representatives  and shareholders, the  Indemnitee will  cause
    such persons  or entities to comply  with the indemnification  provisions
    and  abide  by   the  indemnification  limitations  set  forth  in   this
    Agreement.

 8.2  Limitations of Liability.

    (a)    The parties  hereby  agree that  except  to the  extent  otherwise
       covered  by  Professional  or  General  Liability  insurance  policies
       issued to  or on behalf  of CGI,  CGI will  only be liable for  direct
       damages, as defined herein, sustained  by Client as a result of  CGI's
       breach  of this  Agreement  whether  such  breach  is  the  result  of
       negligence, gross negligence or willful misconduct in the  performance
       of the  services provided  in  the Agreement  and/or any  Schedule  or
       Statement  of  Work  attached from time to time hereto and made a part
       hereof, provided however, that  CGI  will not be  deemed to have  been
       grossly negligent  in connection  with any  action or  any failure  to
       take an action, taken at the direction of Client. For the purposes  of
       this Agreement,  direct damages  are defined  as those  damages  which
       usually, naturally and necessarily flow from a wrongful act or  breach
       and  are of  a  nature  that  the  mere  allegation  of  breach  gives
       sufficient notice to the  breaching party that  they will result  from
       that party's breach  of this Agreement.  Direct damages will  include,
       by way  of example  only:  additional operational  expenses,  remedial
       expenses, mitigation expenses, and cover damages.

    (b)    In no event, except when covered  by liability insurance, shall  a
       party be liable for any consequential, indirect, punitive,  exemplary,
       incidental, multiple or special damages with respect to any breach  of
       this agreement;  provided,  however,  that this  subsection  will  not
       limit the  amount of  a Claim  for indemnification  (as opposed  to  a
       Claim for damages) which is based  on an amount paid by an  Indemnitee
       to a third  party that contains  consequential, incidental,  punitive,
       or  special damages  as  a  component  of  such  amount  paid  by  the
       Indemnitee to the third party.

    (c)    Notwithstanding  subsections  (a)  and  (b)  above,  CGI's   total
       liability for  damages shall  not  exceed the  greater of  either  the
       amounts which were paid to CGI  during the eighteen (18) month  period
       prior to the event  which is subject  to the claim  or, if 18  monthly
       payments have not yet been received by CGI, the total amount of  those
       previously received payments  plus those anticipated  to be made  into
       the future  until a  total  of 18  monthly  payments would  have  been
       received.

  8.3 Limitation Acknowledgment.  Each Party expressly acknowledges that  the
     limitations set  forth in this Article  represent the express  agreement
     of  the Parties  with respect  to the  allocation of  risks between  the
     Parties,  including  the  level  of  risk  to  be  associated  with  the
     performance of the  Services as related to the  amount of payment to  be
     made  to CGI  for such  Services, and  each Party  fully understand  and
     irrevocably accepts such limitations.

  8.4 Notice of  Claim. Any award  of damages or  indemnification pursuant to
     this Agreement is conditioned  upon the Indemnitor having received  full
     written  notice within  3  business days  of  receipt of  the  Claim  by
     Indemnitee and the  Indemnitee allowing the  Indemnitor to fully  direct
     the defense  or settlement of  such Claim; provided,  however, that  the
     failure to  receive notice  as  required in  this section  relieves  the
     Indemnitor of its obligations under this Article only if the  Indemnitor
     is materially  prejudiced by  the failure  to receive  such notice.  The
     Indemnitor will  not be  responsible for  any settlement  or  compromise
     made without  its consent  and such  consent shall  not be  unreasonably
     withheld or delayed.

 8.5  Survival. THE OBLICIATIONS UNDER THIS ARTICLE 8 SURVIVE THE EXILPRATION
     OR TERMINATION OF THIS ACIREEMENT.


                                  ARTICLE 9

                      ARBITRATION AND EQUITABLE REMEDIES

 9.1 Settlement Meeting.  The Parties will attempt in good  faith to  resolve
    promptly through  negotiations any dispute under  this Agreement. If  any
    such  dispute should  arise,  the Parties  will  meet at  least  once  to
    attempt to resolve the  matter (the "Settlement Meeting"). Any Party  may
    request the other  Parties to attend a  Settlement Meeting at a  mutually
    agreed time  and place within ten  days after delivery of  a notice of  a
    dispute.  The  occurrence of  a  Settlement  Meeting with  respect  to  a
    dispute  will be  a condition  precedent to  seeking any  arbitration  or
    judicial remedy, provided that if a Party refuses to attend a  Settlement
    Meeting or does  not avail itself to  a Settlement Meeting within  twenty
    days after delivery  of a notice of dispute  the other Party may  proceed
    to seek such remedy.

 9.2 Arbitration Proceedings. If  the Parties  have not  resolved a  monetary
    dispute at  the Settlement  Meeting any Party  may submit  the matter  to
    arbitration. A  panel of three arbitrators  will conduct the  arbitration
    proceedings in accordance with the provisions of the Federal  Arbitration
    Act (99 U.S.C.  Section 1 et seq.)  and the Commercial Arbitration  Rules
    of the American Arbitration Association (AAA) (the "Arbitration  Rules").
    The  decision of a  majority of  the panel will  be the  decision of  the
    arbitrators.

 9.3 Arbitration Notice. To submit a monetary dispute to arbitration, a Party
    shall  furnish  the  other  Parties  and  the  AAA  with  a  notice  (the
    "Arbitration Notice") containing (i) the name and address of such  Party,
    (ii) the nature of  the monetary dispute in reasonable detail, (iii)  the
    Party's intent to commence arbitration proceedings under this  Agreement,
    and  (iv) the other  information required under  the Federal  Arbitration
    Act and the Arbitration Rules.

 9.4 Selection  of Arbitrators.  Within  ten  days  after  delivery  of   the
    Arbitration Notice, each Party shall select one arbitrator from the  list
    of the  American Arbitration Association's  National Panel of  Commercial
    Arbitrators. Within ten days after the selection of the two  arbitrators,
    those  two arbitrators will  select the third  arbitrator from such  list
    and two  alternates, and each party  shall have one veto,  to use at  its
    sole  discretion, to  disqualify a  selected third  arbitrator, in  which
    case,  the  two arbitrators  will  select from  the  remaining  alternate
    arbitrators.  If  the  first  two  arbitrators  cannot  select  a   third
    arbitrator and two alternate arbitrators within such ten day period,  the
    AAA will  select such third  arbitrator from the  list and neither  party
    shall  have veto  power over  such AAA  selected third  arbitrator.  Each
    arbitrator will  be an individual not  subject to disqualification  under
    Rule No. 19 of the Arbitration Rules with experience in settling  complex
    litigation involving the insurance industry.

  9.5 Arbitration Final.  The arbitration of  the matters in controversy  and
     the determination of any  amount of damages or indemnification shall  be
     final and binding  upon the Parties to  the maximum extent permitted  by
     law, provided  that any Party  may seek any  equitable remedy  available
     under law as provided in this Agreement. This agreement to arbitrate  is
     irrevocable.

  9.6 Place of Arbitration. Any arbitration proceedings will be conducted  at
     such location as the Parties may  agree. If the parties cannot agree  on
     a mutually acceptable  location, the location  of the arbitration  shall
     in  Fort  Worth,  Texas.  The  arbitrators  will  hold  the  arbitration
     proceedings within  sixty (60)  days after  the selection  of the  third
     arbitrator.

  9.7 Discovery. During the period beginning with the selection of the  third
     arbitrator  and   ending  upon   the  conclusion   of  the   arbitration
     proceedings,  the arbitrators  will have  the  authority to  permit  the
     Parties  to   conduct  such  discovery   as  the  arbitrators   consider
     appropriate.

  9.8 Equitable Remedies. Notwithstanding anything  else in this Agreement to
     the contrary, after the Settlement  Meeting a Party will be entitled  to
     seek any  equitable remedies  available under  law. Any  such  equitable
     remedies will be  in addition to any  damages or indemnification  fights
     that such Party may assert in an arbitration proceeding.

  9.9 Judgments. Any arbitration award under this Agreement will be final and
     binding.  Any court  having  jurisdiction  may enter  judgment  on  such
     arbitration award upon application of a Party.

  9.10   Expenses.  If  any Party commences arbitration proceedings or  court
     proceedings seeking  equitable relief  with respect  to this  Agreement,
     the  prevailing  Party in  such  arbitration  proceedings  or  case  may
     receive as part of any  award or judgment reimbursement of such  Party's
     reasonable  attorneys'  fees  and  expenses  to  the  extent  that   the
     arbitrators or court considers appropriate.

  9.11   Cost  of  the Arbitration. The arbitrators will assess the costs  of
     the arbitration  proceedings, including their  fees, to  the Parties  in
     such  proportions  as the  arbitrators  consider  reasonable  under  the
     circumstances.

  9.12   Exclusivity  of  Remedies.  To  the  extent  permitted by  law,  the
     arbitration and judicial remedies set forth in this Article will be  the
     exclusive remedies available to the Parties with respect to any  dispute
     under this Agreement or claim for damages or indemnification under  this
     Agreement.


                                  ARTICLE 10

                                MISCELLANEOUS

  10.1     Amendment. No amendment of this Agreement will be effective unless
     in writing, signed by the Parties.

  10.2     Counterparts. This  Agreement may  be executed  in any  number  of
     counterparts, each of which will be deemed to be an  original agreement,
     but all of which will constitute one and the same agreement.

  10.3     Entire Agreement. This Agreement  constitutes the entire agreement
    and understanding between the Parties and supersedes all prior agreements
    and understandings,  both written and oral,  with respect to the  subject
    matter of this Agreement.

  10.4    Expenses. Each Party will bear its own expenses with respect to the
    negotiation and preparation of this Agreement.

  10.5    Governing Law.  This Agreement will be governed by and construed in
    accordance with  the laws of the  State of Texas,  without regard to  the
    conflicts of laws,  principles or provisions thereof; Each Party  submits
    to the exclusive jurisdiction and venue of the State of Texas.

  10.6   No Assignment. Neither Party may assign its benefits or delegate its
    duties  under this  Agreement  without the  prior  consent of  the  other
    Party; provided, however, that Client may assign its rights and  delegate
    its duties  under this Agreement  to an affiliated  entity without  CGI's
    consent,  but with  prior notice  to CGI.  Any  attempted  assignment  or
    delegation  in  violation  of  the  foregoing  sentence  will  be   void.
    Notwithstanding the  foregoing, each Party  may assign  its rights  under
    this  Agreement to  any third  party  which acquires  (through  purchase,
    merger, reorganization or other combination) all or substantially all  of
    the assets  or equity of  such Party without  the other Party's  consent,
    but with notice to the other Party.

  10.7    No  Third  Party  Beneficiaries.  This  Agreement is solely for the
    benefit of the Parties and no other Person will have any right, interest,
    or claim under this Agreement.

  10.8    Public  Announcements.  The  Parties will agree on the terms of any
    press releases or other public announcements  related to  this Agreement,
    and  will  consult with each other  before issuing any press releases  or
    other public announcements related  to this Agreement; provided, however,
    that  any  Party  may  make a public disclosure if in the opinion of such
    Party's  counsel  it  is  required  by law or the rules of any applicable
    stock  exchange or dealer quotation system to  make such disclosure.  The
    Parties  agree,  to  the extent practicable, to  consult  with each other
    regarding any such public announcement in advance  thereof.  The  Parties
    may, however, include the other Party and the Party's logos on any serial
    list  of clients  and  are not  prohibited  from discussing  the  general
    existence of the relationship.

 10.9    Representation  by  Legal  Counsel.  Each  Party  is a sophisticated
    entity  that was advised by experienced legal  counsel and other advisors
    in the negotiation and preparation of this Agreement.

 10.10    Severability.  Any provision of  this Agreement that is  prohibited
    or unenforceable  in any jurisdiction will  not invalidate the  remaining
    provisions  of  this  Agreement  or affect the validity or enforceability
    of  such  provision  in  any other  jurisdiction.  In  addition, any such
    prohibited  or unenforceable provision will be given effect to the extent
    possible  in  the  jurisdiction  where  such  provision  is prohibited or
    unenforceable.

 10.11    Successors.  This Agreement will be binding upon and  will inure to
    the benefit of each Party and its heir, legal representatives,  permitted
    assigns, and successors. provided  that this Section will not permit  the
    assignment or other transfer  of this Agreement, whether by operation  of
    law or otherwise, if such  assignment of other transfer is not  otherwise
    permitted under this Agreement.

 10.12     Time of the Essence. Time is of the essence in the performance  of
    this Agreement and all dates and periods specified in this Agreement.

 10.13     Waiver. No provision of this  Agreement will be considered  waived
    unless such waiver  is in writing and signed  by the Party that  benefits
    from the  enforcement of such  provision. No waiver  of any provision  in
    this Agreement, however, will be  deemed a waiver of a subsequent  breach
    of such  provision or a  waiver of a  similar provision.  In addition,  a
    waiver of  any breach or a  failure to enforce any  term or condition  of
    this Agreement  will not in  any way affect,  limit, or  waive a  Party's
    rights under  this Agreement  at any  time to  enforce strict  compliance
    thereafter with every term and condition of this Agreement.

 10.14     Force Majeure. The Parties will not  be liable or deemed to be  in
    default for any delay or  failure in performance under this Agreement  or
    interruption of Services resulting, directly or indirectly, from acts  of
    God,  acts of  terrorism, civil  or military  authority, labor  disputes,
    shortages of suitable  materials, labor or transportation or any  similar
    cause beyond the reasonable control of the Parties.

 10.15     Attorney's Fees.  In the event of any action, arbitration,  claim,
    proceeding or suit between Client and CGI  seeking enforcement of any  of
    the terms and conditions of this Agreement, the prevailing party in  such
    action,  arbitration, claim,  proceeding  or  suit will  be  awarded  its
    reasonable costs and  expenses, including its court costs and  reasonable
    attorneys' fees.

 10.16     Relationship  of  the   Parties.  The   Parties  are   independent
    contractors of  one another,  and there should  be no  instance in  which
    they should be construed as partners or joint ventures.

 10.17     Drafting. Neither this  Agreement nor any  provision contained  in
    this Agreement will  be interpreted in favor  of or against either  Party
    because such Party  or its legal counsel  drafted this Agreement or  such
    provision. No  prior draft of this  Agreement or any provision  contained
    in this Agreement  will be used when  interpreting this Agreement or  its
    provisions.

 10.18     Headings.  Article and section headings are used in this Agreement
    only  as  a  matter  of convenience and will not have any effect upon the
    construction or interpretation of this Agreement.



 IN WITNESS WHEREOF,  the  parties  hereto  have  caused this Agreement to be
 executed in duplicate by their duly authorized representatives as of the day
 and year first written above.


 CGI Information Systems & Management Consultants, Inc.

 /s/ Richard J. Marxen
 ---------------------
 Authorized Signature


 Richard J. Marxen
 ---------------------
 Name

   SVP        10/22/03
 ---------------------
 Title          Date


 Phoenix Indemnity Insurance Company

 /s/ Brookland Davis
 ---------------------
 Authorized Signature

 Brookland Davis
 ---------------------
 Name

 President     10/1/03
 ---------------------
 Title          Date


<PAGE>

                              POLICY AND CLAIMS

                  PROCESSING SERVICES AGREEMENT - SCHEDULE 1


 This Schedule is an attachment to the Policy and Claims Processing  Services
 Agreement, dated September 1, 2003, between Client and CGI. CGI will perform
 the following services for the Client subject to the provisions to which the
 Parties  have  agreed.  This  Schedule  is  effective  as  of  September  1,
 2003, 12:01 a.m.


 SECTION lA
 SERVICES

 The following is  a list  of policy  administration services  that CGI  will
 perform on behalf of the Client.

   1. Issue  Client's   policies,   process  renewals,   cancellations,   and
      reinstatements.  CGI will use such non-renewal or cancellation  notices
      as may be required by  policy wording  or regulatory authority.  Client
      will advise CGI of appropriate wording.

   2. Process invoices for additional premiums and renewal bills.

   3. Process refunds for return premiums.

   4. Provide timely, accurate  and appropriate responses  to inquiries  from
      producers, insureds, premium finance  and mortgage companies and  other
      relevant third parties (e.g. mortgagees).

   5. Provide  data  processing  support  for  policy  processing,  including
      imaging of source documents, data entry, editing, electronic  workflow,
      rating,  coding,  reporting,  accounting,  and  maintenance  of  policy
      records.

   6. Insure that  personnel assigned  to  support Client  are  appropriately
      licensed  and trained  and  are  provided  with  the  necessary  space,
      furniture,   fixtures,   electrical   power,   computer    connections,
      telephones, and other required assets to support the services.

   7. Mail all necessary policy documents to relevant parties.

   8. Support Client billing through direct bill.

   9. Provide accounting services for premiums by receiving and  distributing
      premiums,  maintaining  trust  accounts,  agency  accounts  and  paying
      producer  commissions,   in   accordance  with   Client's   obligations
      including, but not limited to:

   a. Premium Bank Account. Promptly upon  receipt thereof, CGI will  deposit
      all premiums and other  funds collected for business  written by or  on
      behalf of Client  into a deposit-only  bank account  to be  established
      and controlled  by Client.  CGI  will be  deemed  to have  a  fiduciary
      responsibility to Client with regard to such funds of Client.

   b. Operating Account.  Client  will establish  and  fund a  separate  bank
      account  which  CGI   may  draw  upon   to  pay   return  premium   due
      policyholders and  commissions due  Producers (hereinafter  called  the
      "Operating Account"),  CGI will  reconcile all  disbursements from  the
      Operating Account each month by type and amount of disbursement  (e.g.,
      return premium, commissions  due to or  from Producers)  and furnish  a
      copy to Client.

   c. Monthly Reports.  All month-end  management reports  in printed  format
      will be provided  to Client  within 3 business  days after  the end  of
      each month.  Further, a cash journal will be provided to Client  within
      3  business  days   after  the  end   of  each  month   and  all   bank
      reconciliations will  be provided  to Client  within 20  business  days
      after the end of each month with no material reconciling items  carried
      over from the prior month.  All accounting end of the month  electronic
      system downloads will be transferred to  Client within 2 business  days
      after the end of each month.

   d. Required  Reports. Reports with  the information  and statistical  data
      required by  Insurance  Services Office  and  necessary for  Client  to
      prepare any reports required by  the National Association of  Insurance
      Commissioners will be provided  to Client as  necessary or required  to
      prepare such reports.

   12.     Calculate and pay commissions to the Producer on Client's  behalf,
      or invoice and receive  the return of commission  from the Producer  on
      return premium transactions  and prepare and  mail a  Federal 1099  tax
      statement for each Producer paid a commission during a tax year.

   13.     Provide  timely,  accurate  and  appropriate  responses  to   non-
      underwriting  questions  from  policyholders,  insured  and   producers
      concerning policy and/or endorsement issuance or billing.

   14.     Maintain written operational procedures, as  they exist as of  the
      Effective Date, to handle all business related to the policies.

   15.     Provide  all   agreed   upon   additional   reports   or   perform
      modifications  as  requested  in  writing  by  Client  on  a  time  and
      materials basis  utilizing the  appropriate  mix of  service  personnel
      required to  perform the modifications  or produce  new reports.  Rates
      for such personnel are listed in Section lB.

   16.     Maintain a disaster recovery plan to  be implemented in the  event
      of an occurrence of a catastrophic event.

    The following is a list of  claims administration services that CGI  will
    perform on behalf of the client.

   1. Investigate, evaluate,  and handle  each  claim reported  according  to
      applicable state law, the  terms and conditions of  the policy and  any
      written standards provided  by Client using  appropriately  trained and
      licensed personnel.  Client grants  CGI the  authority to  provide  the
      foregoing claims administration  services; provided,  however that  CGI
      will not have any authority to  alter or discharge any policy or  waive
      any policy provision or condition.

   2. Establish  a claims operation center that  will function  as a  control
      unit.

   3. Verify coverage on all cases.

   4  Administer  the appraisal/assessment  process  using a  combination  of
      staff, independent appraisers  and direct repair facilities  reasonably
      acceptable  to Client.  All expenses  for these  appraisals/assessments
      will be incurred by CGI.

   5. Perform  all reasonable and necessary administrative and clerical  work
      in connection with claim or loss reports.

   6. Establish  and  maintain  a claim file for each reported claim or loss.
      The  claim file will have a daily activity log, which will be available
      for review at  any and all reasonable times by Client  subject  to  the
      provisions of the Agreement.

   7. Record and  report each  claim promptly  to Client  with a  recommended
      reserve; and consult with, and seek consent from Client with respect to
      any of the following:

   a. Any loss or claim  resulting in legal  action being instituted  against
      Client's insured, CGI or Client;

   b. Any loss or claim causing a  complaint to be filed with any  regulatory
      authority;

   c. Any inquiry from  any regulatory authority,  including but not  limited
      to any insurance department, with respect to any claim or claims,  even
      if no complaint causes such inquiry;

   d. Any claim in  which CGI deems  appropriate to  rescind policy  coverage
      for material misrepresentation;

   e. Any claim involving an allegation of extra contractual obligations,  or
      bad faith claim handling;

   f. Any claim involving a fatality, major amputation, spinal cord or  brain
      damage,  loss of  eyesight,  extensive  bums,  poisoning,  or  multiple
      fractures;

   g. Any claim that Client desires to be kept advised of during the life  of
      the claim; or

   h. Any claim where there has been a demand for policy limits and CGI  does
      not evaluate  the value  of the  claim to  include settlement  at  that
      amount;

   i. Any claim involving asbestos, pollution, toxic waste and lead or  paint
      poisoning;

   j. Potential subrogation in excess of $40,000;

   k. Any claim  which  is very  likely  to  result in  the  commencement  of
      litigation within 30 days;

   l. Any  claim  involving  pharmaceuticals,  communicable  diseases,  rape,
      child molestation or multiple claim food poisoning.

   m. Any  claim involving  denials  of  coverage  not  related  to  material
      misrepresentation

   8. Provide  monthly  and  year-to-date  reports  on  all  claims  activity
   including new claims  reported, claims pending, claims closed and  reserve
   changes. The reports will include:

   a. Information and  statistical data  (1) required  by Insurance  Services
      Office, (2) necessary  for Client to  prepare any  reports required  by
      National Association of Insurance  Commissioners, or (3) other  reports
      reasonably requested by Client.

   b. Loss runs with paid  claims and outstanding  reserves remaining at  the
      end of each  monthly report period,  categorized as indemnity,  medical
      payment, loss adjustment expense separated  by other expense and  legal
      expense (to  the  extent  that Client  properly  inputs  the  necessary
      data), plus  any other  information required  by the  Annual  Statement
      instructions or state regulatory agencies;

   c. Check registers;

   d. Reports needed  by Client  for  the filing  of reinsurance  claims  or
      quarterly reinsurance updates.

  9. Perform  a  periodic  review  at  mutually  agreed  upon  intervals   of
     outstanding claim  reserves,  and  recommend changes  outstanding  claim
     reserves.

  10. Prepare checks and vouchers, compromises, releases, agreements and  any
     other documents reasonably necessary to  finalize and close claims.  CGI
     will issue  payments of  claims and  allocate loss  adjustment  expenses
     only within  the guidelines  as authorized  by Client.  For purposes  of
     settling claims and paying claim-related expenses, Client has agreed  to
     establish, maintain and fund a separate bank account from which CGI  may
     draw against  as hereinafter  set forth  (the "Claim  Account").  Client
     agrees to deposit  additional funds into the  Claim Account on a  weekly
     basis if necessary to maintain it at a level sufficient to allow CGI  to
     carry out  its  obligations under  this  Agreement.  CGI will  regularly
     provide  information  and  estimates  to  Client  to  enable  Client  to
     maintain the Claim Account at an appropriate level.  Client will provide
     to CGI such information as  is necessary for CGI  to draw checks on  the
     Claim Account. CGI hereby guarantees that any check it prepares will  be
     signed and  issued only  in  accordance with  the procedures  set  forth
     below:

     Check Amount               #         Type            Authorized
                           Signatures                     Signatory
     0.01-$1,999.99             1      1 Facsimile           CGI
     $2,000.00-$9,999.99        2      1 Facs,l Orig         CGI
     $10,000.00-$19.999.99      2      2 Original            CGI
     $20,000.00+                2      2 Original       1 CGI, 1 Client

     Facsimile  signatures  can   be  replaced   with  original   signatures.
     Original signatures  may  not  be replaced  with  facsimile  signatures.
     Exceptions will be submitted to CGI in writing by Client.

     CGI will  promptly  deposit any  monies  collected through  salvage  and
     subrogation to the  Claim Account, and maintain  a register of all  such
     collections and deposits (the  "Salvage and Subrogation Register").  The
     Salvage and Subrogation Register will  include, but will not be  limited
     to, the  following information:  date  of deposit,  date of  receipt  of
     funds, the claim number, the payer,  and the amount and purpose of  such
     payment. (The "Claim  Register" will include,  but will  not be  limited
     to, the  following  information: claim  number;  date of  check;  payee;
     amount; and check  number.) CGI will  reconcile the  Claim Register  and
     the Salvage and Subrogation Register  to the Claim Account on a  monthly
     basis.

  11. Maintain service standards and claims documentation in accordance  with
     standards set by Client and agreed to by CGI. CGI will be in  compliance
     with all state  regulations dealing with the  adjusting and handling  of
     claims. CGI  will  periodically review  the  development of  the  claims
     handling  procedure with  Client  to  identify  problems  and  recommend
     corrective action.

  12.  Pursue  and  prosecute diligently  Client's  salvage  and  subrogation
     rights relating  to  any  losses.  CGI  will  use  reasonable efforts to
     collect and deposit funds arising  from the enforcement  of such  rights
     into  the  Claim Account. CGI will report monthly on salvage/subrogation
     receipts.

  13. Provide on a  case by  case basis  with prior  client approval  Special
     Investigative Services in accordance with guidelines agreed to by Client
     on a time and expense basis.

  14. Provide Client claim information to prepare reports (A) required by the
     Internal Revenue Service, and (B) other reports reasonably requested  by
     Client.

  15. Maintain a disaster recovery plan to  be implemented in the event of  a
     catastrophic event.

  16. Upon (A) receipt  by CGI  of a demand  for arbitration  or notice  that
     litigation has been  filed concerning  a  claim  or  feature  or  (B)  a
     determination by Client that it is necessary to commence litigation of a
     claim feature, or salvage or subrogation claim CGI will promptly provide
     the Designated Representative with written notice of Client's option  to
     assume all further responsibility for the administration of the disputed
     claim  or  feature; and, in the event Client elects within ten (10) days
     to  assume such  responsibility  for the disputed  claim or feature, CGI
     will  promptly  transfer  to  Client  such  disputed  claim  or feature;
     and will promptly deliver to Client  the  original  claim  file,  notes,
     photographs  and  any  Special  investigation Unit files, which material
     will  be  returned to  CGI  at the  conclusion  of  the  arbitration  or
     litigation.  Notwithstanding Client's election with respect to the Party
     responsible for  the  administration  of any disputed claim  or feature,
     Client will be responsible for all expenses  regarding such  arbitration
     or  litigation, including attorneys' fees, incurred after receipt by CGI
     of a demand  for  arbitration  or  after receipt by  CGI of notice  that
     litigation has been filed concerning a claim or feature.


 SECTION lB
 SERVICE FEES

 CGI will perform the services listed above for the following fee:

 1. Policy Administration Services. Policy Administration fees shall be equal
    to 7.15% of the Written Premium recognized by the Client for each  month,
    subject to a monthly minimum of $lQ0,000.O0.

 2. Claims Administration Services. Claims Administration fees shall be equal
    to 7.75% of the Earned Premium recognized by  the Client for each  month.
    Subject to Section 7.2(d) of the  Processing Services Agreement to  which
    this Schedule 1 is a  part, CGI  will be entitled  to retain  25% of  all
    subrogation  recoveries and  15%  of  all  salvage  recoveries.   Special
    Investigative Unit  Services will be provided as approved  by Client  for
    the fee of $60 per hour, plus actual expenses.

 3. When requested and authorized by Client, processing system  modifications
    will be charged to Client, on  a time and  materials basis utilizing  the
    appropriate   mix  of   service  personnel  required   to   perform   the
    modifications. Hourly rates for such services are $125 per hour.

 4. Travel. Client will reimburse  CGL for all reasonable travel requested by
    Client in connection with the work performed under this Service Schedule.

 IN WITNESS WHEREOF,  the  parties  hereto  have  caused this Schedule to the
 Processing  Services  Agreement  to  be  executed in duplicate by their duly
 authorized representatives.


 CGI Information Systems & Management Consultants, Inc.

 /s/ Richard J. Marxen
 ---------------------
 Authorized Signature


 Richard J. Marxen
 ---------------------
 Name

   SVP        10/22/03
 ---------------------
 Title          Date


 Phoenix Indemnity Insurance Company

 /s/ Brookland Davis
 ---------------------
 Authorized Signature

 Brookland Davis
 ---------------------
 Name

 President     10/1/03
 ---------------------
 Title          Date