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                                                                   EXHIBIT 10.34


GUY CARPENTER
                                                                      COVER NOTE
                                                    No.  01-98-0022

Memorandum of Reinsurance
effected through Guy Carpenter & Company, Inc.
180 Maiden Lane, New York, NY 10038-4993


REINSURED:        SCPIE HOLDINGS, INC.,
                  AND/OR S.C.P.I.E. INDEMNITY COMPANY,
                  AND/OR AMERICAN HEALTHCARE INDEMNITY COMPANY,
                  AND/OR AMERICAN HEALTHCARE SPECIALTY COMPANY,
                  AND/OR S.C.P.I.E. INSURANCE SERVICES, INC.
                  AND/OR S.C.P.I.E. MANAGEMENT SERVICES, INC.
                  BEVERLY HILLS, CALIFORNIA

TYPE:             FOURTH EXCESS OF LOSS REINSURANCE

BUSINESS
COVERED:          Physicians, and Surgeons Comprehensive Professional and
                  Business Liability Policies, including Clinics and Clinical
                  Laboratories, Professional and Business Liability Policies for
                  Hospitals and Errors and Omissions Liability Policies for
                  Managed Care Organizations.

TERM:             January 1, 1998 to December 31, 1998 as respects claims made
                  during the calendar year 1998.

                  Retroactive date January 1, 1976, except for Extra Contractual
                  Obligations which is January 1, 1979.

                  In respect of recoveries made under A.1:

                  The term "claims made" as used herein shall mean (A) In
                  respect of Claims Made Policies, claims first notified to the
                  Company during the term of this Agreement on any inforce
                  policy or reporting endorsement arising out of incidents
                  subsequent to the retroactive date of said policy as the
                  result of the rendering of or failure to render a professional
                  service or the reporting of losses, which arise from the
                  insured premises and operations incidental to the practice of
                  a physician, hospital or managed care organization and/or (B)
                  In respect of Occurrence Policies, claims or losses first
                  notified to the Company during the term of this Agreement.

                  In the event of cancellation, and at the option of the
                  Reinsured, Reinsurers agree to run-off policies in force until
                  natural expiration not to exceed 12 months from the expiration
                  date hereon, subject to a Premium equal to exceed 50% of the
                  Actual Earned Reinsurance Premium.

TERM:             In respect of recoveries made tinder Section A.2.

                  The term "claims made" shall mean claims first reported to the
                  Reinsured during the period January 1, 1992 to December 31,
                  1992 and first reported to Reinsurers during the term of this
                  Agreement.



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TERRITORY:        As per the Company's original policies, contracts, or binders,

EXCLUSIONS:       1.       Insolvency Funds.
                  2.       Nuclear Incident - Liability - Reinsurance,

LIMIT AND
RETENTION:          A.1.   To pay $10,000,000 each and every loss in excess of
                           $10,000,000 each every loss.

                    A.2.   $10,000,000 each and every loss in excess of
                           $10,000,000 each and every loss covering losses which
                           were first reported to the Company during the period
                           January 1, 1992 to December 31, 1992 and are first
                           reported to the Reinsurers during the term of this
                           Agreement. The coverage provided hereunder shall be
                           no narrower nor broader in scope than that which was
                           provided to the Company under their Fourth Excess of
                           Loss Reinsurance Agreement in force for the same
                           period (see attached Cover Note No. 01-92-0599.)

WARRANTY:           1.     In respect of Physicians and Surgeons Comprehensive
                           Professional old Business Liability Policies,
                           including Clinics and Clinical Laboratories, the
                           Maximum Original Policy Limit is $10,000,000, subject
                           to inuring protection of $8,000,000 in excess of
                           $2,000,000 or so deemed.

                    2.     As respects Professional and Business Liability
                           Policies for Hospitals written on or after January 1,
                           1996 and prior to October 1, 1997, Policy Limits
                           greater than $500,000 reinsured elsewhere on an
                           Excess of Loss basis or so deemed.

                    3.     As respects Professional and Business Liability
                           Policies for Hospitals written prior to January 1,
                           1996, Policy Limits greater than $5,000,000 reinsured
                           elsewhere on in Excess of Loss basis or so deemed.

                    4.     As respects Professional and Business Liability
                           Policies for Hospitals written on or after October 1,
                           1997, Policy Limits greater than $1,000,000 reinsured
                           elsewhere on an Excess of Loss basis or so deemed.

                    5.     In respect of Errors and Omissions Liability Policies
                           for Managed Care Organizations, Maximum Original
                           Policy Limit $5,000,000.

PREMIUM:            .445% of G.N.E.P.I.

                    Deposit Premium:  $475,000, payable $118,750 quarterly.

                    Minimum - $475,000.


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REINSTATEMENT(S): A- 1.    One in all at the option of the Company computed Pro
                           Rata as to amount 100% as to premium.

                           All calculations of reinstatement premiums shall be
                           based on paid losses only. The decision of the
                           Company to exercise its reinstatement option must be
                           relayed to Reinsurers within three (3) months from
                           the time any reserve invades this Contract.

                                               PLUS

                  A.2.     In the event of a paid loss arising under this
                           Section, additional to the reinstatement premium
                           payable above, a further reinstatement premium shall
                           be payable, to be calculated at pro rata as respects
                           amount and 100% as respects premium based on annual
                           premium of $120,000.

                           It is understood and agreed that the payment of
                           reinstatement premiums arising from losses
                           recoverable under Section A.2. above shall be
                           mandatory and not at the option of the Company.

                  Maximum Annual Aggregate Amount Recoverable under A.1. and
                  A.2. combined is $20,000,000 in all.

ATTACHMENT OF
LIABILITY:          (A)    For purposes of determining the attachment of the
                           Reinsurer's liability hereunder as respects any one
                           loss, all losses (including Discovery Period Losses)
                           involving one or more Original Insureds, arising from
                           the same medical incident, and in which First Notice
                           of Claim or Circumstance is notified to the Company
                           during the term of this Agreement shall be covered
                           hereunder. Where first notice falls in Agreement
                           Years incepting prior to January 1, 1992 the
                           "Interlocking Clause" to apply hereon for Physicians
                           and Surgeons Comprehensive Professional Liability
                           Policies only.

                  (B)      The date of a loss hereunder shall be the earliest
                           date. within the term of this Contract that the
                           company has received First Notice of Claim or
                           Circumstance.

GENERAL
CONDITIONS:       Loss Adjustment Expenses to be Pro-Rated.
                  Excess of Original Policy Limits Clause,
                  80% Extra Contractual Obligations Clause.
                  Ultimate Net Loss Clause including Declaratory
                  Judgement Expenses incurred in connection with
                  coverage questions and legal actions related
                  to a specific claim.
                  Net Retained Lines Clause.
                  Notice of Loss Clause.
                  Loss Funding Clause - Including IBNR (See Attached).
                  Special Funding Clause.
                  Confidentiality Clause.
                  Commutation Clause.
                  Federal Excise Tax Clause.
                  Errors and Omissions Clause.
                  Insolvency Clause.


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                  Service of Suit Clause.
                  Arbitration Clause.
                  Access to Records Clause.
                  Guy Carpenter & Company, Inc. Intermediary Clause.

REINSURERS
HEREON:           Domestic:
<TABLE>
<S>               <S>                                             <C>
                  Gulf Insurance Company                            5.00%
                                                                    -----
                                          Domestic Total            5.00%

                  Australia:
                  Through Guy Carpenter & Company, Pty. Ltd.
                    GIO Insurance Ltd.
                    trading as:
                    GIO Reinsurance                                10.00%
                                                                   ------
                                         Australia Total           10.00%

                  France:
                  Axa Reinsurance Company                           5.00%
                                                                    -----
                                        France Total                5.00%

                  Germany:
                  Hannover Ruckversicherungs AG                     5.00%
                                                                    -----
                                          Germany Total             5.00%

                    United Kingdom:
                  Through Guy Carpenter & Company, Ltd. (UK)
                            London England
</TABLE>

<TABLE>
<S>               <C>              <C>          <C>              <C>
                  Underwriters at Lloyd's
                        SVH        1007                            6.568%
                        DFM        435                            10.946%
                        SJC        1003         28.00%
                                   2003         72.000%            5.000%
                        JHV        376          45.80%
                                   2376         54.20%             1.982%
                        FRW        190                             3.303%
                        ROS        227          73.00%
                                   2227         27.00%             0.991%
                        RJH        122                             0.991%
                        BFC        780                             1.651%
                        SJB        1212                            1.982%
                        GNR        570                             1.982%
                        MEL        1223                            6.606%
                        RAS        1096                            1.321%
                        HGJ        205                             3.633%
                        WEH        362                             5.000%
                        RAE        219                             3.964%
                        MFN        1027         30.97%
                                   2027         69.03%             1.321%
                        GSC        958                             0.661%
                        ANT        51                              0.991%
</TABLE>



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<TABLE>
<S>               <C>              <C>          <C>              <C>
                        CFP        314                             0.826%
                        SAM        727                             1.651%
                        MHE        529                             1.321%
                        AFB        623                             3.303%
                        BAR        990                             0.495%
                        CNA International Reinsurance Co., Ltd.    4.379%
                        Sphere Drake Insurance PLC                 1.982%
                        Unionamerica Insurance Company, Ltd,       2.150%
                                         United Kingdom Total     75.000%
                                                                 --------
                                         Domestic Total             5.00%
                                         Foreign Total             95.00%
                                                                 --------
                                         Grand Total             100.000%
</TABLE>


This Cover Note is to confirm the terms and conditions which have been
negotiated between Guy Carpenter & Company, Inc. and the participating
Reinsurers on your behalf. We request that you review this Cover Note with
regard to the specific placement details and subscribing Reinsurers listed
herein. In the event that any of these details do not meet with your approval or
security of the subscribing Reinsurers does not meet with your requirements,
please notify this office immediately. If all is found to be in order please
sign and return the enclosed duplicate copy of this Cover Note for completion of
our files.


/s/ Donald J. Zuk
-------------------------------
Signature


March 13, 1998
-------------------------------
Date

                                         Guy Carpenter & Company, Inc.



                                         By  /s/ Managing Director
                                             ---------------------------------
                                             Managing Director