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                                                                  EXHIBIT 10.16


                   AMENDMENT dated as of January 6, 1999 (this "Amendment"), 
              to the Credit Agreement dated as of June 24, 1997, as amended by 
              the Release and Amendment dated as of December 15, 1997, the 
              Amendment dated as of April 20, 1998, the Amendment dated as of 
              October 23, 1998 and the Amendment dated as of October 30, 1998 
              (the "Credit Agreement"), among ARM FINANCIAL GROUP, INC., a 
              Delaware corporation (the "Borrower"), the financial institutions 
              from time to time party thereto (the "Lenders") and THE CHASE 
              MANHATTAN BANK, a New York banking corporation, as agent for the 
              Lenders (in such capacity, the "Agent").

         WHEREAS, the Borrower has requested that the Lenders amend certain 
provisions of the Credit Agreement as set forth herein;

         WHEREAS, the Lenders are willing, on the terms, subject to the 
conditions and to the extent set forth below, to provide such amendments; and

         WHEREAS, capitalized terms used and not otherwise defined herein 
shall have the meanings assigned to them in the Credit Agreement.

         NOW, THEREFORE,    in consideration of the premises and the 
agreements, provisions and covenants herein contained, the parties hereto 
hereby agree, on the terms and subject to the conditions set forth herein, 
as follows:

         SECTION 1.   AMENDMENT TO CREDIT AGREEMENT
Subparagraph (iii) of the definition of "Designated Activity" in section 1.01 
of the Credit Agreement is amended in its entirety to read as follows:

         "(iii) the acquisition and maintenance by such Person of fixed 
         income securities with an average credit quality of the higher of 
         (a) A or (b) the average credit quality required by the investment 
         guidelines set forth in the Investment Management Agreement 
         (or other similar document) executed as part of the issuance of 
         face-amount certificates by such Person:"

         SECTION 2.   AMENDMENT TO CREDIT AGREEMENT  Section 6.01(m) of the 
Credit Agreement  is amended in its entirety to read as follows:

         "(m)   Indebtedness of the Designated Subsidiaries (evidenced by or 
         incurred pursuant to any agreements, instruments, commitments or 
         arrangements, irrespective of their individual or aggregate face 
         amount, in each case arising from or related to one or more 
         Designated Activities) in an aggregate outstanding principal 

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         amount not to exceed at any time $1,150,000,000 plus accrued but 
         unpaid interest thereon."

         SECTION 3.   REPRESENTATIONS AND WARRANTIES.  The Borrower hereby 
represents and warrants to each Lender, on and as of the date hereof, and 
after giving effect to this Amendment, that:

         (a)   the representations and warranties set forth in Article III of 
     the Credit Agreement are true and correct in all material respects on and 
     as of the date hereof, except to the extent such representations and 
     warranties relate to an earlier date; and

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

         SECTION 4.   EFFECTIVENESS.  The amendments to the Credit Agreement 
set forth in Sections 1 and 2 shall become effective only upon receipt by the 
Agent of duly executed counterparts hereof which, when taken together, bear 
the authorized signatures of the Borrower and the Required Lenders.

         SECTION 5.   GOVERNING LAW.  THIS AMENDMENT SHALL BE CONSTRUED IN 
ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK.

         SECTION 6.   COUNTERPARTS.  This Amendment may be executed in any 
number of counterparts, each of which shall be an original but all of which, 
when taken together, shall constitute but one instrument.  Delivery of an 
executed counterpart of a signature page of this Amendment by facsimile 
transmission shall be as effective as delivery of a manually executed 
counterpart of this Amendment.

         SECTION 7.   EXPENSES.  The Borrower agrees to pay all expenses 
incurred by the Agent in connection with the preparation, execution and 
delivery of this Amendment, including the fees, charges and disbursement of 
counsel.

         SECTION 8.   HEADINGS.  Section headings used herein are for the 
convenience of reference only, are not part of this Amendment and are not to 
affect the construction of, or to be taken into consideration in 
interpreting, this Amendment.

         SECTION 9.   EFFECT OF THIS AMENDMENT GENERALLY.  Except as 
expressly set forth herein this Amendment shall not by implication or 
otherwise limit, impair, constitute a waiver of, or otherwise affect the 
rights and remedies of the Lenders under the Credit Agreement or any other 
Loan Document, and shall not alter, modify, amend or in any way affect any of 
the terms, conditions, obligations, covenants or agreements contained in the 
Credit Agreement or any other Loan Document, all of which are ratified and 
affirmed in all respects and shall continue in full force and effect.  
Nothing herein shall be deemed to entitle the Borrower to a consent to, or a 
waiver, amendment, modification or other change of, any of the terms, 
conditions, obligations, covenants or agreements contained in this Credit 
Agreement or any other Loan


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Document in similar or different circumstances. This Amendment shall apply and
be effective only with respect to the provisions of the Credit Agreement 
specifically referred to herein.

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

                                        ARM FINANCIAL GROUP, INC.,

                                        by /s/ Peter S. Resnik
                                          ------------------------
                                        Name: /s/ Peter s. Resnik
                                        Title: Treasurer


                                        by /s/ Edward L. Zeman
                                          ------------------------
                                        Name: Edward L. Zeman
                                        Title: C F C

                                        THE CHASE MANHATTAN BANK,
                                        individually, and as
                                        Administrative Agent,

                                        by /s/ Peter F. Plattin
                                          ------------------------
                                        Name:  Peter F. Plattin
                                        Title: Vice President


                                        BANK OF TOKYO-MITSUBISHI TRUST
                                        COMPANY,

                                        by
                                          ------------------------
                                        Name:
                                        Title:


                                        DEUTSCHE BANK AG, NEW YORK
                                        AND/OR CAYMAN ISLAND BRANCHES,

                                        by
                                          ------------------------
                                        Name:
                                        Title:


                                        by
                                          ------------------------
                                        Name:
                                        Title:

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                                        DRESDNER BANK AG, NEW YORK BRANCH
                                        AND GRAND CAYMAN BRANCH,

                                        by /s/ Rajiv Gupta
                                          ------------------------
                                        Name:    RAJIV GUPTA
                                        Title:    ASSOCIATE


                                       by /s/ Anthony C. Valencourt
                                         ---------------------------
                                        Name: ANTHONY C. VALENCOURT
                                        Title: SENIOR VICE PRESIDENT


                                        THE FIRST NATIONAL BANK OF
                                        CHICAGO,

                                        by /s/ Peter L. Crawford
                                          ------------------------
                                        Name:  Peter L. Crawford
                                        Title: First Vice President


                                        FIRST UNION NATIONAL BANK,

                                        by /s/ T. L. Stichberry
                                          ------------------------
                                        Name:  T. L. Stichberry
                                        Title: S V P


                                        PNC BANK, N.A.,

                                        by
                                          ------------------------
                                        Name:
                                        Title:


                                        SUNTRUST BANK, CENTRAL FLORIDA,
                                        NATIONAL ASSOCIATION,

                                        by
                                          ------------------------
                                        Name:
                                        Title: