<PAGE>   1
                                                               EXHIBIT 3.1


                       RESTATED ARTICLES OF INCORPORATION OF

                              FARMERS GROUP, INC.



     The undersigned hereby certify that they are, respectively, the President
and Secretary of Farmers Group, Inc. and that they were authorized to execute
this certificate by a resolution of the board of directors of said corporation
duly adopted at a meeting held on the 17th day of May, 1974.

     The undersigned further certify that the following is the entire text of
the Articles of Incorporation of Farmers Group, Inc. as amended to the date of
this certificate:

KNOW ALL MEN BY THESE PRESENTS:

     That we, the undersigned, have this day voluntarily associated ourselves
together for the purpose of forming a Corporation under and pursuant to the
laws of the State of Nevada, and we hereby certify:

     FIRST:    That the name of this corporation is Farmers Group, Inc.

     SECOND:   The principal office and place of business of this
Corporation in the State of Nevada shall be located at Scheeline Banking and
Trust Company, in the City of Reno, County of Washoe, State of Nevada, but the
Corporation may maintain an office, or offices, in such Towns, Cities, places
and foreign Countries outside of the State of Nevada, as the Board of Directors
may from time to time determine, or as may be designated by the By-Laws of the
Corporation, and all Corporate business of every kind and nature may be
conducted outside the State of Nevada the same as in the State of Nevada.

                    (Not amended since incorporation)

     THIRD:    The nature of the business and the objects and purposes
proposed to be transacted, promoted and carried on by this Corporation are:

     1.   To purchase and otherwise acquire, become interested in, hold, sell,
mortgage, pledge or otherwise dispose of, or turn to account or realize upon,
all forms of securities including stocks, bonds, debentures, notes, evidences
of indebtedness, certificates of indebtedness, certificates of interest,
commercial papers, mortgages, deeds of trust and other similar instruments and
rights, issued or created by corporations, domestic or foreign, associations,
firms, trustees, syndicates, individuals, governments, states, municipalities,
or other political divisions, or issued or created by others, and to deal in
and with the same, and to issue in exchange therefor or in payment thereof
its own stocks, bonds or other obligations or securities, or otherwise pay
therefor; to exercise in respect thereof any and all rights, powers and
privileges of individual ownership or interest therein, including the right
to vote thereon and to consent or otherwise act with respect thereto; to do any
and 

<PAGE>   2

all acts and things for the preservation, protection, improvement, and
enhancement in value thereof or designed to accomplish any such purpose, and to
aid by loan, subsidy, guaranty, or in any other manner those issuing, creating
or responsible for any of such securities, all to such extent as a corporation
organized under said General Corporation Law may then lawfully do.

     2.   To take, hold, manage or control escrow of any kind or nature and to
act as escrow or escrow holder in escrows of any and every kind.

     3.   To investigate and report with respect to, and to undertake, carry
on, aid, assist or participate in the litigation or reorganization of,
financial, commercial, mercantile, agricultural, industrial or other business
concerns, firms, associations and corporations, and for that purpose to take
over the properties, manage the affairs and conduct the business of such
concerns, firms associations and corporations, and in the course of such
business to acquire and dispose of, or otherwise turn to account all or any
negotiable or transferable instruments or securities, including debentures,
bonds, notes, certificates of indebtedness, certificates of interest, and all
kinds of commercial paper.

     4.   To purchase or otherwise acquire, sell or otherwise dispose of,
realize upon or otherwise turn to account, manage, liquidate or reorganize
the properties, assets, business, undertakings, enterprises or ventures, or any
part thereof, of corporations, associations, firms, individuals, syndicates and
others, to further and promote the general business interests of any thereof,
and to improve, extend and place upon a safe and more permanent foundation any
such business, undertaking, enterprises or venture.

     5.   To act as financial, commercial or general agent or representative of
any corporation, association, firm, syndicate, individual or others, and as
such to develop, improve and extend the property, trade and business interests
thereof, and to aid any lawful enterprise in connection therewith, and in
connection with acting as such, or as agent or broker for any principal to
give any other aid or assistance.

     6.   To promote and assist, financially or otherwise, corporations, firms,
syndicates, associations, individuals and others and to give any guaranty in
connection therewith or otherwise for the payment of money or for the
performance of any other undertaking or obligation.

     7.   To borrow money, and for moneys borrowed or in payment for property
acquired, or for any other objects and purposes of the corporation or otherwise
in connection with the transaction of any part of its business, to issue bonds,
debentures, notes and other obligations, secured or unsecured, and to mortgage,
pledge or hypothecate any or all of its properties or assets as security
therefor.  To make, accept, endorse, guarantee, execute and issue notes and
other obligations, to mortgage, pledge or hypothecate any stocks, bonds or
other evidences of indebtedness or securities and any other property held by
it, or in which it may be interested, and to loan money with or without
collateral or other security.

<PAGE>   3

     8.   To guarantee the payment of the principal of and/or interest upon
bonds, notes, or other evidences of secured indebtedness or obligations, or the
performance of the contracts or other undertakings of any corporation,
copartnership, syndicates, individual or others, and, to such extent, to enter
into, make, perform and carry out contracts of every kind and any lawful
purpose, with any person, firm, association, corporation, syndicate or others.

     9.   To purchase, hold, sell and transfer the shares of its own capital
stock; provided it shall not use its funds or property for the purchase of its
own shares of capital stock when such use would cause any impairment of its
capital; and provided further that shares of its own capital stock belonging to
it shall not be voted upon directly or indirectly.

     10.   To purchase or otherwise acquire, hold, own, mortgage, sell, convey,
exchange, option, subdivide, or otherwise dispose of real and personal property
of every class and description and any estate or interest therein, including
leaseholds for any term, in any of the States, Districts, Territories or
Colonies of the United States, and in any and all foreign countries, subject to
the laws of such State, District, Territory, Colony or Country.

     11.   In general, to manage, operate and carry on any other business in
connection with the foregoing, and to have and exercise all the powers
conferred by the laws of Nevada upon corporations formed under the act
hereinafter referred to, and to do any or all of the things hereinbefore set
forth to the same extent as natural persons might or could do.

     12.   The foregoing clauses shall be construed both as objects and powers;
and it is hereby expressly provided that the foregoing enumeration of specific
powers shall not be held to limit or restrict in any manner the powers of this
corporation.

           And in addition to the foregoing to exercise, transact and carry on
in all of the States, Territories and Colonial possessions of the United
States, exclusive of the State of Nevada, the following additional objects and
purposes, to-wit:

     13.   To act as the agent, under Power of Attorney, or otherwise, of any
number of individuals, partnerships and/or Corporations in the exchange of
reciprocal or inter-insurance contracts, covering any and all forms of hazards
which may be lawfully insured against except that of Life Insurance; to execute
contracts for and on behalf of such Subscribers, whether individually or
collectively, and to collect premiums and other fees for the same; to act as
agent for any such Subscribers in obtaining such Insurance from other
individuals, partnerships and/or Corporations.

     14.   To establish and maintain, upon behalf of such Subscribers, out of
the capital assets of this Company, or otherwise, a reserve in accordance with
law, to meet losses which may accrue and to pay out the funds of Subscribers in
meeting any such losses and any other expenses accruing in regard thereto.

<PAGE>   4

     15.   To charge and receive from the Subscribers any such premiums and/or
fees and may be fixed in such reciprocal and/or inter-insurance contracts and
to disburse the same without restrictions, except those which may be required
by law in the maintaining of legal reserves to meet losses.

     16.   To execute any and all bonds, documents, contracts or other
instruments of writing which may be deemed necessary or desirable to carry out
of the purpose aforesaid, and to do all things necessary and requisite thereto,
the same as an individual might or could do to carry those purposes into
effect.

                   (Amended:        Date of Certificate last 
                                    amending, November 15, 1927)

     FOURTH:   The amount of the total authorized capital stock of the
corporation is Thirty-Two Million Dollars ($32,000,000.00) and the total number
of shares which the corporation shall be authorized to issue is thirty-two
million (32,000,000), of which two million (2,000,000) shares are to be
Preferred Stock, having a par value of One Dollar ($1.00) per share, and thirty
million (30,000,000) shares are to be Common Stock, having a par value of One
Dollar ($1.00) per share.

                   (First Paragraph amended:   Date of Certificate last
                                               amending, May 19, 1972)

     The Common Stock may be issued from time to time for such consideration as
shall be determined by the Board of Directors and the holders of such Common
Stock shall be entitled to one (1) vote per share upon the election of
directors and upon any question affecting the management or affairs of the
corporation.

     The Preferred Stock may be issued from time to time in one or more series.
Preferred Stock which may be redeemed, purchased or acquired by the corporation
may be reissued, except as otherwise provided in any resolution of the Board of
Directors fixing the terms of any series of Preferred Stock, or as otherwise
provide by law.

     With the exception of the initial series of Preferred Stock, the
designation and express terms and provisions of which are hereinafter set forth
in this Article FOURTH, the Board of Directors is hereby expressly authorized
to fix the designations, preferences and relative, participating, optional or
other special rights, or qualifications, limitations or restrictions on the
shares of any series of Preferred Stock, all as provided in the Nevada Revised
Statutes, including without limitation the dividend rights, dividend rate,
conversion rights, voting rights, rights and terms of redemption (including
sinking fund provisions), the redemption price or prices, the liquidation
rights, and the number of shares constituting any such series, or any or all of
them; and to increase or decrease (but not below the number of shares of such
series then outstanding) the number of shares of any series subsequent to the
issue of shares of such series.  In case the number of shares of any series
shall be so decreased, the shares constituting such decrease shall resume the
status which they had prior to the adoption of the resolution originally fixing
the number of shares of such series.

<PAGE>   5

     The initial series of Preferred Stock of the corporation shall be
designated: "$3.00 Cumulative Convertible Preferred Stock" (hereinafter the
"$3.00 Preferred Stock"), consisting of 312,500 shares, which shall have the
following rights, preferences, restrictions and other terms and provisions
relating thereto:

     1.   Dividends.   The holders of the $3.00 Preferred Stock shall be
entitled to receive  out of any funds of the corporation at the time legally
available for the declaration of dividends, an initial dividend of 75 cents per
share for the period from date of issuance through the close of business on
March 12, 1971, and thereafter dividends at the rate of $3.00 per annum per
share, and no more, payable in cash quarterly on the second Friday of March,
June, September and December of each year, when and as declared by the Board of
Directors.  Such dividends shall accrue from day to day, whether or not earned
or declared, and shall be cumulative; and any dividends accrued thereon and
unpaid shall not bear interest.  Unless dividends on the $3.00 Preferred Stock
at the rate prescribed shall be declared and paid or set apart for payment in
full on all outstanding shares of $3.00 Preferred Stock for all previous
dividend periods, no dividends shall be declared or paid upon, and no assets
shall be distributed or set apart for shares of Common Stock, or any other
stock junior to the $3.00 Preferred Stocks in right of payment of dividends.

     2.   Liquidation.   The $3.00 Preferred Stock shall have no liquidation
preference over the Common Stock or over any other stock which is on a parity
with the Common Stock; and in the event of a liquidation, dissolution or
winding up of the corporation, the holders of $3.00 Preferred Stock shall be
entitled to receive out of the assets of the corporation, whether such assets
are capital or surplus of any nature, all dividends accrued thereon and unpaid
(whether or not earned or declared) and an amount per share, and no more, which
is equal to the amount if any, payable on such liquidation, dissolution or
winding up upon the number of shares (and/or fraction thereof) of the Common
Stock of the corporation into which each share of $3.00 Preferred Stock is
convertible immediately prior to the time of such event, thereby treating the
$3.00 Preferred Stock as though it were Common Stock for such purpose.  A
consolidation or merger of the corporation shall not be deemed to be a
liquidation, dissolution or winding up within the meaning thereof.

     3.   Redemption.   Shares of $3.00 Preferred Stock are not subject to
redemption.

     4.   Voting Rights.   The holders of the issued and outstanding shares
of $3.00 Preferred Stock shall possess full voting rights and powers at the
rate of one (1) vote per share and shall be entitled to notice of any
shareholders' meeting in accordance with the By-Laws of the corporation, and
shall be entitled to vote together with holders of Common Stock upon the
election of directors or upon any question affecting the management or affairs
of the corporation.

     5.   Conversion.   The holders of the shares of $3.00 Preferred Stock
shall have conversion rights as follows:

          (1)   The shares of $3.00 Preferred Stock shall be convertible, at
the option of the respective holders thereof, at any time on or prior to March
12, 1976, at the office of the corporation or any transfer agent for such
shares, and at the close of business on March 12, 1976, all shares of

<PAGE>   6

$3.00 Preferred Stock not theretofore converted shall be converted
automatically, into fully paid and non-assessable shares (calculated to the
nearest 1/100th of a share, fraction of less that 1/100th of a share being
disregarded) of Common Stock of the corporation, at the conversion rate,
determined as hereinafter provided, in effect at the time of conversion.
The corporation shall make no payment or adjustment on account of any
dividends accrued on shares of $3.00 Preferred Stock surrendered for
conversion prior to the close of business on March 12, 1976.  The holders of
shares of $3.00 Preferred Stock outstanding immediately prior to the close of
business on March 12, 1976 shall be entitled to receive in respect of each such
share an amount equal to all dividends accrued thereon and unpaid (whether or
not earned or declared).

     (2)   Before any holder of $3.00 Preferred Stock shall be entitled to
convert the same into shares of Common Stock, he shall surrender the
certificate of certificates therefor, duly endorsed or accompanied by proper
instruments of transfer, at the office of the corporation or of any transfer
agent for the $3.00 Preferred Stock, and shall give written notice to the
corporation at such office that he elects to convert the same and shall state
in writing therein the name or names in which he wishes the certificate or
certificates for shares of Common Stock to be issued.  The corporation shall
as soon as practicable thereafter, issue and deliver at such office to such
holder of $3.00 Preferred Stock, or to his nominee or nominees, certificates
for the number of full shares of Common Stock to which he shall be entitled as
aforesaid, together with cash in lieu of any fraction of a share as hereinafter
provided.  Such conversion shall be deemed to have been made as of the date of
such surrender of the shares of $3.00 Preferred Stock to be converted and the
person or persons entitled to receive the shares of Common Stock issuable upon
such conversion shall be treated for all purposes as the record holder or
holders of such shares of Common Stock on said date.

     (3)   The conversion rate shall be one (1) share of Common Stock for each
one (1) share of $3.00 Preferred Stock converted, such rate being subject to
adjustment from time to time in case the corporation shall at any time issue
additional shares of Common Stock as a dividend upon any outstanding stock of
the corporation other than the $3.00 Preferred Stock, or subdivide the
outstanding shares of Common Stock, or combine the outstanding shares of Common
Stock.  The conversion rate theretofore in effect shall be proportionately
increased or decreased, as the case may be, effective at the opening of
business on the day next succeeding the record date for the determination of
stockholders entitled to such dividend, or at the close of business on the date
of such subdivision or combination, as the case may be.
     (4)   No fractional shares of Common Stock shall be issued upon the
conversion of shares of $3.00 Preferred Stock.  If any fractional interest in a
share of Common Stock would, except for the provisions of this paragraph (4),
be deliverable upon the conversion of any shares of $3.00 Preferred Stock, the
corporation shall, in lieu of delivering a fractional share therefore, adjust
such fractional interest by payment to the holder of such surrendered shares of
$3.00 Preferred Stock of  an amount in cash equal (computed to the nearest 
cent) to such fraction multiplied by the last sales price (or bid price if
there be no sales) of the Common Stock on the national securities exchange, if
any, on which the Common Stock is at the time listed (or upon the senior such
exchange if the Common Stock is then listed on more than one such exchange) on
the day of conversion, or, if at the  time the Common Stock is not listed on
any national securities exchange, by the mean of

<PAGE>   7

the last reported bid and asked prices of the Common Stock in the Los Angeles
over-the-counter securities market on the day of conversion.

     (5)   Whenever the conversion rate is adjusted, as herein provided the
corporation shall forthwith maintain at its office and file with the transfer
agents for shares of $3.00 Preferred Stock and any securities exchange or
exchanges on which such shares are listed, a statement signed by the President
or a Vice President of the corporation and by its Treasurer or an Assistant
Treasurer, showing in detail the facts requiring such adjustment and the
conversion rate after such adjustment.  Such transfer agent or agents and
securities exchange or exchanges shall be under no duty or responsibility with
respect to any such statement except to exhibit the same from time to time to
any holder of shares of $3.00 Preferred Stock desiring an inspection thereof.

     (6)   In case of any capital reorganization or any reclassification of the
Common Stock of the corporation or in case of a consolidation or merger of the
corporation with or into another corporation or the conveyance of all or
substantially all of the assets of the corporation to another corporation, each
share of $3.00 Preferred Stock shall thereafter be convertible into the number
of shares of stock or other securities or property to which a holder of the
number of shares of Common Stock of the corporation deliverable upon conversion
of such shares of $3.00 Preferred Stock would have been entitled upon such
reorganization, reclassification, consolidation, merger or conveyance; and, in
any such case appropriate adjustment (as determined by the Board of Directors)
shall be made in the application of the provisions herein set forth with
respect to the rights and interests thereafter of the holders of the shares of
$3.00 Preferred Stock to the end that the provisions set forth herein (including
provisions with respect to changes in and other adjustments of the conversion
rate) shall thereafter be applicable, as nearly as reasonably may be, in
relation to any shares of stock or other property thereafter deliverable upon
the conversion of the shares of $3.00 Preferred Stock.

     (7)   In the event:

           (i) the corporation shall take a record of the holders of
      shares of its Common Stock for the purpose of entitling them to
      receive a dividend, or any other distribution, payable otherwise
      than in cash; or

           (ii) the corporation shall take a record of the holders of
      shares of its Common Stock for the purpose of entitling them to
      subscribe for or purchase any shares of stock of any class or to
      receive any other rights; or

           (iii) there shall be any capital reorganization of the
      corporation, reclassification of the Common Stock of the
      corporation (other than a subdivision or combination thereof),
      consolidation or merger of the corporation with or into another
      corporation, or conveyance of all or substantially all of the
      assets of the corporation to another corporation; or

<PAGE>   8
           (iv) of the voluntary or involuntary dissolution, liquidation
      or winding up of the corporation;

then and in any such case, the corporation shall cause to be mailed to the
transfer agent or agents for $3.00 Preferred Stock, and to the holders of
record of the outstanding shares of $3.00 Preferred Stock, at least 15 days
prior to the date hereinafter specified, a notice stating the date on which (x)
a record is to be taken for the purpose of such dividend distribution or
rights, or (y) such reclassification, reorganization, consolidation, merger,
conveyance, dissolution, liquidation or winding up is to take place and the
date, if any is to be fixed, as of which holders of shares of Common Stock of
record shall be entitled to exchange their shares of Common Stock for
securities or other property deliverable upon such reclassification,
reorganization, consolidation, merger, conveyance, dissolution, liquidation
or winding up.

     (8)   The corporation shall obtain and keep in force such permits or other
authorizations as may be required by law in order to enable the corporation
validly to issue and deliver such number of shares of its Common Stock as shall
from time to time be sufficient to effect the conversion of all shares of $3.00
Preferred Stock from time to time outstanding.  The corporation shall at all
times reserve and keep available, out of its authorized but unissued Common
Stock, solely for the purpose of effecting the conversion of the shares of
$3.00 Preferred Stock the full number of shares of Common Stock deliverable
upon the conversion of all shares of $3.00 Preferred Stock from time to time
outstanding.

     (9)   The corporation shall pay any and all issue and other taxes that may
be payable in respect of any issue or delivery of shares of Common Stock on
conversion of shares of $3.00 Preferred Stock pursuant hereto.  The corporation
shall not, however, be required to pay any tax which may be payable in respect
of any transfer involved in the issue and delivery of shares of Common Stock in
a name other than that in which the shares of $3.00 Preferred Stock so converted
were registered, and no such issue or delivery shall be made unless and until
the person requesting such issue has paid to the corporation the amount of any
such tax, or has established, to the satisfaction of the corporation, that such
tax has been paid.

                   (Amended:       Date of Certificate last
                                   amending, December 31, 1970)

     FIFTH:   That the amount of capital with which the Corporation will begin
business is Nine Hundred ($900.00) Dollars.

                   (Not amended since incorporation)

     SIXTH:   The members of the Governing Board shall be styled Directors and
the number of such Directors, which shall be not less than three, shall be the
number thereof provided in the By-Laws of this Corporation.  The names and post
office addresses of the first Board of Directors are as follows:

<PAGE>   9

<TABLE>
<CAPTION>



Name                                                 Residence
<C>                                                  <C> 
LOUIS H. DIDIER                                      PUENTE, CALIFORNIA
EDWARD R. MOORE                                      ROUTE #3, SANTA ANA, CALIFORNIA
FRANK A. BORCHARD                                    OXNARD, CALIFORNIA
THOMAS E. LEAVEY                                     616 BROADWAY ARCADE BLDG.
                                                     LOS ANGELES, CALIFORNIA
JOHN C. TYLER                                        616 BROADWAY ARCADE BLDG.
                                                     LOS ANGELES, CALIFORNIA
HARRY L. PERSON                                      616 BROADWAY ARCADE BLDG.
                                                     LOS ANGELES, CALIFORNIA
A. B. PERSON                                         616 BROADWAY ARCADE BLDG.
                                                     LOS ANGELES, CALIFORNIA
GEO. D. RODGERS                                      616 BROADWAY ARCADE BLDG.
                                                     LOS ANGELES, CALIFORNIA
J. K. MAHONEY                                        616 BROADWAY ARCADE BLDG.
                                                     LOS ANGELES, CALIFORNIA

                   (Amended:        Date of Certificate last
                                    amending, May 22, 1974)

</TABLE>

     SEVENTH:   The names and post office addresses of the original Subscribers
of these Articles of Incorporation, and the number of shares and amount
subscribed for by each respectively, are as follows:

<TABLE>
<CAPTION>
                                                             NO. OF
                                                             SHARES
NAME                      RESIDENCE                          PREFERRED    AMOUNT

<C>                       <C>                                <C>          <C> 
LOUIS H. DIDIER           PUENTE, CALIFORNIA                 ONE (1)      $1.00
EDWARD R. MOORE           ROUTE #3, SANTA ANA                ONE (1)      $1.00
                                  CALIFORNIA
FRANK R. BORCHARD         OXNARD, CALIFORNIA                 ONE (1)      $1.00
THOMAS E. LEAVEY          616 BROADWAY ARCADE BLDG.          ONE (1)      $1.00
                           LOS ANGELES, CALIFORNIA
JOHN C. TYLER             616 BROADWAY ARCADE BLDG.          ONE (1)      $1.00
                           LOS ANGELES, CALIFORNIA
HARRY L. PERSON           616 BROADWAY ARCADE BLDG.          ONE (1)      $1.00
                           LOS ANGELES, CALIFORNIA
A. B. PERSON              616 BROADWAY ARCADE BLDG.          ONE (1)      $1.00
                           LOS ANGELES, CALIFORNIA
GEO. D. RODGERS           616 BROADWAY ARCADE BLDG.          ONE (1)      $1.00
                           LOS ANGELES, CALIFORNIA
J. K. MAHONEY             616 BROADWAY ARCADE BLDG           ONE (1)      $1.00
                           LOS ANGELES, CALIFORNIA

                   (Not amended since incorporation)
</TABLE>

     EIGHTH:   The Capital Stock of this Corporation, after the amount of the
subscription price or par value has been paid in, shall not be subject to
assessment to pay debts of this

<PAGE>   10

Corporation, and not stock issued as fully paid up shall ever be assessable or
assessed, and the Articles of Incorporation shall not be amended in this
particular.

                   (Not amended since incorporation)

     NINTH:   This Corporation is to have perpetual existence.

                   (Not amended since incorporation)

     TENTH:   In furtherance and not in limitation of the powers conferred by
Statute the Board of Directors is expressly authorized:

     To make, alter and amend the By-Laws of this Corporation, to fix the
amount to be reserved as working capital over and above its capital stock paid
in, to authorize and cause to be executed mortgages and liens upon the real and
personal property of this Corporation;

     From time to time to determine whether and to what extent, and at what
times and places, and under what conditions and regulations, the accounts and
books of this Corporation, (other than the stock ledger), or any of them, shall
be open to inspection of stockholders, and no stockholders shall have any right
of inspecting any account, book or document of this Corporation except as
conferred by the Statute, unless authorized by resolution of the stockholders
or Directors;

     If the By-Laws so provide, to designate two (2) or more of its number to
constitute an executive committee, which committee shall for the time being as
provided in said resolution or in the By-Laws of this Corporation have and
exercise any or all of the powers of the Board of Directors in the management
of the business affairs of the Corporation, and to have power to authorize the
seal of this Corporation to be affixed to all papers which may require it.

     Pursuant to the affirmative vote of the holders of at least a majority of
the stock issued and outstanding, having voting power, given at a stockholders'
meeting duly called for that purpose, or when authorized by the written consent
of at least a majority of the holders of the voting stock issued and
outstanding, the Board of Directors shall have power and authority at any
meeting to sell, lease or exchange all of the property and assets of this
Corporation, including its Good Will and its Corporate franchises, upon such
terms and conditions as its Board of Directors deem expedient for the best
interests of the Corporation.

     This Corporation may in its By-Laws confer power upon its Directors in
addition to the foregoing, and in addition to the powers and authorities
expressly conferred upon them by the Statute.

     Both stockholders and Directors shall have power if the By-Laws so
provide, to hold their meetings, and to have one or more offices within or
without the State of Nevada, and to keep the books of this Corporation (subject
to the provisions of the Statutes), outside of the State of Nevada, at such
place or places as may be from time to time designated by the Board of
Directors.

<PAGE>   11

                   (Amended: Date of Certificate last
                    amending, March 28, 1958)

     ELEVENTH:   This Corporation reserves the right to amend, alter, change or
repeal any provisions contained in these Articles of Incorporation (except such
as are expressly stated herein as not to be amended), in the manner now or
hereafter prescribed by Statute, and all rights conferred upon stockholders
herein, and granted subject to this reservation.

                   (Not amended since incorporation)

     WE, THE UNDERSIGNED, being each of the original subscribers to the capital
stock hereinbefore named, for the purpose of forming a Corporation to do
business both within and without the State of Nevada, and in pursuance of the
General Corporation Laws of the State of Nevada, effective March 31st, 1925,
and the acts amendatory thereof and supplemental thereto, do make and file
these Articles of Incorporation, hereby declaring and certifying that the facts
herein stated are true, and do respectfully agree to take the number of shares
of stock herein set forth and accordingly have hereunto set our hands and seals
this 14th day of October, 1927.

                                               LOUIS H. DIDIER
                                               EDWARD R. MOORE
                                               FRANK A. BORCHARD
                                               THOMAS E. LEAVEY
                                               JOHN C. TYLER
                                               HARRY L. PERSON
                                               A. B. PERSON
                                               GEO. D. RODGERS
                                               J. K. MAHONEY

                                       FARMERS GROUP, INC.



                                       /s/ Robert E. Early
                                       Robert E. Early, President



                                       /s/ Thomas C. Underwood
                                       Thomas C. Underwood, Secretary

<PAGE>   12

                        CERTIFICATE OF AMENDMENT
                                    OF
                        ARTICLES OF INCORPORATION
                                    OF
                           FARMERS GROUP, INC.

     FARMERS GROUP, INC., a corporation organized under the laws of the State 
of Nevada, by its President, GEORGE MASLACH, and Secretary, HARRY BOYD, does 
hereby certify:
     1.   That the Board of Directors of said corporation, at a meeting duly 
convened and held on the 4th day of February, 1977, adopted a resolution 
declaring that the change and amendment in the Restated Articles of 
Incorporation hereinafter set forth is advisable, and called a meeting of the 
stockholders to take action thereon.
     2.   That thereafter, and on the 20th day of May, 1977, pursuant to such 
call of the Board of Directors, and upon notice given to each stockholder of 
record entitled to vote on the amendment to the Restated Articles of 
Incorporation as provided by law and the By-Laws, the Annual Meeting of 
Stockholders of said corporation was held, at which meeting more than a 
majority in interest of the stockholders having voting powers, to wit, holding 
22,027,330 shares of the 26,489,474 shares of Common Stock issued and 
outstanding on the record date for the meeting were present in person or 
represented by proxy, and that more than a majority in interest of the 
stockholders having voting powers voted in favor of such change and amendment 
to the Restated Articles of Incorporation, such change and amendment being as 
follows:
     Restated Articles of Incorporation of Farmers Group, Inc. be amended to 
     read as follows:

          "FOURTH: The amount of the total authorized capital stock of the 
          Corporation is Fifty-Two Million Dollars ($52,000,000) and the total 

<PAGE>   13

          number of shares which the Corporation shall be authorized to issue 
          is Fifty-Two Million (52,000,000) of which Two Million (2,000,000) 
          shares are to be preferred stock having a par value of One Dollar 
          ($1.00) per share; and Fifty Million (50,000,000) shares are to be 
          Common Stock, having a par value of One Dollar ($1.00) per share."

     2.   That the foregoing amendment, stated in paragraph 2 hereinabove, 
was approved and adopted by the affirmative vote of the holders of 21,339,109 
shares, being the holders of more than a majority of the issued and 
outstanding shares of said corporation entitled to vote; that the total number 
of issued and outstanding shares of said corporation, the holders of which are 
entitled to vote is 26,489,474 shares.
     IN WITNESS WHEREOF, FARMERS GROUP, INC. has caused this Certificate to be 
signed by its President and its Secretary and its corporate seal to be hereto 
affixed this 23rd day of May, 1977.

                                          FARMERS GROUP, INC.

                                          By       /s/ George Maslach
                                            ----------------------------------
                                                    George Maslach, President

                                          By       /s/ Harry Boyd 
                                            ----------------------------------
                                                    Harry Boyd, Secretary

<PAGE>   14

                         CERTIFICATE OF AMENDMENT
                                    OF 
                        ARTICLES OF INCORPORATION
                                    OF
                           FARMERS GROUP, INC.

     FARMERS GROUP, INC., a corporation organized under the laws of the State 
of Nevada, by its President, JOSEPH E. METSCHAN, and Secretary, MARYANN 
SELTZER, does hereby certify:
     1.   That the Board of Directors of said corporation at a meeting duly 
convened and held on the 3rd day of February 1984, adopted a resolution 
declaring that the change and amendment in the Restated Articles of 
Incorporation hereinafter set forth is advisable, and called a meeting of the 
stockholders to take action thereon.
     2.   That thereafter, and on the 18th day of May, 1984, pursuant to such 
call of the Board of Directors, and upon notice given to each stock holder of 
record entitled to vote on the amendment to the Restated Articles of 
Incorporation as provided by law and the By-Laws, the Annual Meeting of 
Stockholders of said corporation was held, at which meeting more than a 
majority in interest of the stockholders have voting powers, to wit, holding 
at least 22,565,791 shares of the 33,952,349 shares of Common Stock issued and 
outstanding on the record date for the meeting were present in person or 
represented by proxy, and that more than a majority in interest of the 
stockholders having voting powers in favor of such change and amendment to the 
Restated Articles of Incorporation, such change and amendment being as follows:

<PAGE>   15

          That the first paragraph of Article Fourth of the Restated Articles 
of Incorporation of Farmers Group, Inc. be amended to read as follows:

          "FOURTH:   The total number of shares which the corporation shall 
          be authorized  to issue is seventy-nine million (79,000,000), of 
          which four million (4,000,000) shares are to be Preferred Stock and 
          seventy-five million (75,000,000) shares are to be Common Stock.  
          All of the shares of capital stock of the corporation shall have a 
          par value of One Dollar ($1.00) per share."

     3.   That the foregoing amendment, stated in paragraph 2 hereinabove, was 
approved and adopted by the affirmative vote of the holders of 20,757,079 
shares, being the holders of more than a majority of the issued and outstanding
shares of said corporation entitled to vote; that the total number of issued 
and outstanding shares of said corporation, the holders of which are entitled 
to vote is 33,952,349 shares.
          IN WITNESS WHEREOF, FARMERS GROUP, INC. has caused this Certificate 
to be signed by its President and its Secretary and its corporate seal to be 
hereto affixed this 24th day of September, 1984.

                                          FARMERS GROUP, INC.



                                          By       /s/ Joseph E. Metschan   
                                            ----------------------------------
                                                       JOSEPH E. METSCHAN




                                          By       /s/ Maryann Seltzer   
                                            ----------------------------------
                                                       MARYANN SELTZER

<PAGE>   16

                         CERTIFICATE OF AMENDMENT 
                                    OF
                    RESTATED ARTICLES OF INCORPORATION
                                    OF
                           FARMERS GROUP, INC.

     FARMERS GROUP, INC., a corporation organized under the laws of the State 
of Nevada, by its President,  LEO E. DENLEA, JR. and Secretary, MARYANN 
SELTZER, does hereby certify:
     1.   That the Board of Directors of said corporation at a meeting duly 
convened and held on the 7th day of February, 1986, adopted a resolution 
declaring that the change and amendment in the Restated Articles of 
Incorporation hereinafter set forth is advisable, and called a meeting of the 
stockholders to take action thereon.
     2.   That thereafter, and on the 16th day of May, 1986, pursuant to such 
call of the Board of Directors, and upon notice given to each stockholder of 
record entitled to vote on the amendment to the Restated Articles of 
Incorporation as provided by law and the By-Laws, the Annual Meeting of 
Stockholders of said corporation was held, at which meeting more than a 
majority in interest of the stockholders having voting powers, to wit, holding 
at least 22,946,625 shares of the 34,446,910 shares of Common Stock issued and 
outstanding on the record date for the meeting were present in person or 
represented by proxy, and that more than a majority in interest of the 
stockholders having voting power voted in favor of such change and amendment 
to the Restated Articles of Incorporation, such change and amendment being as 
follows:

<PAGE>   17

     That the first paragraph of Article Fourth of the Restated Articles of 
Incorporation of Farmers Group, Inc. be amended to read as follows:
          "FOURTH:   The total number of shares which the corporation shall 
          be authorized to issue is two hundred and thirty-seven million 
          (237,000,000), of which twelve million (12,000,000) shares are to 
          be Preferred Stock, having a par value of One Dollar ($1.00) per 
          share, and two hundred and twenty-five million (225,000,000) shares 
          are to be Common Stock having a par value of One Dollar ($1.00) per 
          share."

     3.   That the foregoing amendment, stated in paragraph 2 hereinabove, 
was approved and adopted by the affirmative vote of the holders of 19,954,586 
shares, being the holders of more than a majority of the issued and 
outstanding shares of said corporation entitled to vote; that the total number 
of issued and outstanding shares of said corporation, the holders of which 
were entitled to vote on the record date was 34,446,910 shares.
     IN WITNESS WHEREOF, FARMERS GROUP, INC. has caused this Certificate to be 
signed by its President and its Secretary and its corporate seal to be hereto 
affixed this 19th day of May, 1986.


                                          FARMERS GROUP, INC.

                                          By       /s/ Leo E. Denlea, Jr.   
                                            ----------------------------------
                                                       Leo E. Denlea, JR.,
                                                       President

                                          By       /s/ Maryann Seltzer   
                                            ----------------------------------
                                                       Maryann Seltzer,
                                                       Secretary






<PAGE>   18








                         CERTIFICATE OF AMENDMENT
                                    OF
                     RESTATED ARTICLES OF INCORPORATION
                                    OF
                           FARMERS GROUP, INC.

     FARMERS GROUP, INC., a corporation organized under the laws of the State 
of Nevada (the "Company"), by its President, LEO E. DENLEA, JR. and Secretary, 
MARYANN SELTZER, does hereby certify:

     1.   That the Board of Directors of said Company at a meeting duly 
convened and held on the 24th day of August 1988, adopted a resolution 
approving that certain Agreement and Plan of Merger dated as of August 24, 
1988 among BATUS Inc., BATUS Financial Services Inc. and the Company and the 
transactions contemplated thereby, including an amendment (the "Amendment") 
to Article Fourth of the Restated Articles of Incorporation of the Company 
such that said Article should read in its entirety:

<PAGE>   19

          The total number of shares of all classes of stock which the 
          Corporation shall have authority to issue is 1,000.  All 1,000 such 
          shares shall consist of Common Stock, par value $1.00 per share,

     2.   That thereafter, and on the 14th day of December, 1988, pursuant 
to the call of the Board of Directors, and upon due notice given to each 
stockholder of record entitled to vote, a Special Meeting of Stockholders of 
said Company was held;

     3.   That at such Special Meeting, of the 68,539,942 shares of common 
stock of the Company ("Shares") that were issued, outstanding and entitled to 
vote as of the close of business on November 7, 1988, the record date for such 
Special Meeting, 5,215,991 shares abstained from voting on, 45,257,788 Shares 
voted in favor of, and 2,603,694 Shares voted against the adoption and 
approval of the Merger Agreement and transactions contemplated thereby, 
including the Amendment;

     4.   That said affirmative vote represented a majority of the Shares 
and that thereby, the Amendment was duly adopted by the stockholders of the 
Company.
     WITNESS our hands and the seal of the Company on this 3rd day of 
     February, 1989.

                                                   /s/ Leo E. Denlea, Jr.   
                                            ----------------------------------
                                                       LEO E. DENLEA, JR.
                                                       Chairman of the Board,
                                                       President and Chief 
                                                       Executive Officer

                                                   /s/ Maryann Seltzer   
                                            ----------------------------------
                                                       MARYANN SELTZER
                                                       Secretary

<PAGE>   20

                         CERTIFICATE OF AMENDMENT
                                    OF
                    RESTATED ARTICLES OF INCORPORATION
                                    OF
                           FARMERS GROUP, INC.


     FARMERS GROUP, INC., a corporation organized under the laws of the State 
of Nevada (the "Corporation"), by its Vice President, Howard E. Falk, Jr., and 
Secretary, Doren E. Hohl, does hereby certify:

     1.   That the Board of Directors of said Corporation at a meeting duly 
convened and held on the fifth day of August, 1998, adopted a resolution 
approving an amendment (the "Amendment") to Article Fourth of the Restated 
Articles of Incorporation of the Corporation such that said Article should read 
in its entirety:

          "FOURTH:   The amount of the total authorized capital stock of the 
     corporation is One Thousand Dollars ($1,000.00) and the total number of 
     shares which the corporation shall be authorized to issue is one thousand 
     (1,000), of which five hundred (500) shares are to be Class A Common 
     Stock, having a par value of One Dollar ($1.00) per share, and five 
     hundred (500) shares are to be Class B Common Stock, having a par value 
     of One Dollar ($1.00) per share.

          The holders of the shares of Class A Common Stock shall be entitled 
     to one (1) vote per share upon the election of directors and on all other 
     matters upon which stockholders generally are entitled to vote.  The 
     holders of the shares of Class B Common Stock shall be entitled to 
     one-ninth (1/9) vote per share upon the election of directors and on all 
     other matters upon which stockholders generally are entitled to vote.  
     The holders of the shares of Class A Common Stock and the holders of the 
     shares of Class B Common Stock shall be entitled to notice of any 
     stockholders' meeting in accordance with the By-Laws of the corporation, 
     and the holders of the shares of Class A Common Stock and the holders of 
     the shares of Class B Common 

<PAGE>   21

     Stock shall vote together as a single class with respect to any matter 
     brought to a stockholder vote, except as otherwise provided by law.

          The holders of the shares of Class A Common Stock and the holders 
     of the shares of Class B Common Stock shall be entitled to receive, 
     when and if declared by the board of directors, out of funds of the 
     corporation at the time legally available therefor, dividends or 
     distributions payable either in cash, in stock, or otherwise; provided, 
     however, that the board of directors may, in its sole discretion, declare 
     dividends or distributions payable exclusively to the holders of the 
     shares of Class A Common Stock, or payable exclusively to the holders of 
     the shares of Class B Common Stock, or payable to the holders of the 
     shares of Class A Common Stock and the holders of the shares of Class B 
     Common Stock in equal or unequal amounts, notwithstanding the amount of 
     prior dividends or distributions declared on either such class or any 
     other factor.

          In the event of a liquidation, dissolution or winding up of the 
     corporation, the holders of the shares of Class A Common Stock shall 
     be entitled to receive any and all distributions of money or other 
     property of the corporation to the exclusion of the holders of the 
     shares of Class B Common Stock."

     2.   That thereafter, on the 4th day of September, 1998, pursuant to 
the call of the Board of Directors, a Special Meeting of Stockholder of said 
Corporation was held;

     3.   That at such Special Meeting, all 1,000 shares of common stock of 
the Corporation ("Shares") that were issued and outstanding voted in favor 
of the adoption and approval of the Amendment and that the Amendment was 
thereby duly adopted by the sole stockholder of the Corporation; and

     4.   As authorized by the Board of Directors and the sole stockholder 
of the Corporation, at the time this Certificate of Amendment is filed in the 
office of the Secretary of State of Nevada (the "Effective Time"), each share 
of common stock of the Corporation outstanding immediately prior to the 
Effective Time shall, automatically and without further action by any holder 
of any such shares, be converted into and shall become (a) one-half of a 
fully-paid and non-assessable share of 

<PAGE>   22

Class A Common Stock and (b) one-half of a fully-paid and non-assessable 
share of Class B Common Stock (the "Recapitalization").  Promptly after the 
Effective Time, each record holder of a certificate that, immediately prior 
to the Effective Time, represented a share of common stock of the Corporation 
shall be entitled to receive in exchange for such certificate, upon surrender 
of such certificate to the Corporation at its principal office, certificates 
for the number of shares of Class A Common Stock and Class B Common Stock to 
which such holder is entitled as a result of the Recapitalization.  Until 
surrendered and exchanged in accordance herewith, each certificate that, 
immediately prior to the Effective Time, represented shares of common stock 
of the Corporation shall represent the number of shares of Class A Common 
Stock and Class B Common Stock to which the holder is entitled as a result of 
the Recapitalization.

     WITNESS our hands and the seal of the Corporation on this 4th day of 
     September, 1998.


                                                   /s/ Howard E. Falk, Jr.   
                                            ----------------------------------
                                                       Vice President



                                                   /s/ Doren E. Hohl   
                                            ----------------------------------
                                                       Secretary