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                                                                  EXECUTION COPY

                                 FIRST AMENDMENT

                  FIRST AMENDMENT (this "Amendment"), dated as of April 2, 1998,
among Frontier Insurance Group, Inc. (the "Borrower"), the lending institutions
party to the Credit Agreement referred to below (each a "Bank" and,
collectively, the "Banks"), and Deutsche Bank AG, New York Branch and/or Cayman
Islands Branch, as Administrative Agent (the "Administrative Agent"). All
capitalized terms used herein and not otherwise defined herein shall have the
respective meanings provided such terms in the Credit Agreement.

                              W I T N E S S E T H :

                  WHEREAS, the Borrower, the Banks and the Administrative Agent
are party to a Credit Agreement, dated as of June 3, 1997 (as amended, modified
and supplemented prior to the date hereof, the "Credit Agreement"); and

                  WHEREAS, the Borrower has requested that the Banks provide the
amendments provided for herein and the Banks have agreed to provide such
amendments on the terms and conditions set forth herein;

                  NOW, THEREFORE, it is agreed:

                  1. On the Amendment Effective Date (as hereinafter defined),
the Commitment of each Bank shall be modified to be the amount set forth
opposite the name of such Bank on Annex I hereto. In connection with the
foregoing, on the Amendment Effective Date, the Borrower shall, in coordination
with the Admininstrative Agent and the Banks, repay outstanding Revolving Loans
of certain Banks and incur additional Revolving Loans from other Banks, in each
case if necessary so that the Banks participate in each Borrowing of Revolving
Loans pro rata on the basis of their Commitments (after giving effect to this
Section 1). It is hereby agreed that the breakage costs incurred by the Banks in
connection with the repayment of Revolving Loans contemplated by this Section 1,
if any, shall be for the account of the Borrower. On the Amendment Effective
Date, Annex I to the Credit Agreement shall be deemed amended to read as set
forth in Annex I attached hereto to give effect to the foregoing.

                  2.  The following definition contained in Section 9 of the
Credit Agreement is hereby amended to read in its entiretly as follows:

                          "Final Maturity Date" shall mean June 2, 2003.

                  3. In order to induce the Banks to enter into this Amendment,
the Borrower hereby represents and warrants that (i) no Default or Event of
Default exists as of the Amendment Effective Date (as defined below) after
giving effect to this Amendment and (ii) on the Amendment Effective Date, both
before and after giving effect to this Amendment, all representations and
warranties contained in the Credit Agreement and in the other Credit



                                      

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Documents are true and correct in all material respects, except (a) to the
extent such representations and warranties expressly relate to an earlier date,
in which case such representations and warranties are true and correct in all
material respects as of such earlier date, and (b) in the case of Section
5.08(e) of the Credit Agreement, for the matters described in the press releases
of the Borrower dated October 6, 1997, February 2, 1998 and February 17, 1998,
copies of which are attached hereto as Annex II.

                  4. This Amendment shall become effective on the date (the
"Amendment Effective Date") when:

                  (a) the Borrower and each Bank shall have signed a counterpart
          hereof (whether the same or different counterparts) and shall have
          delivered (including by way of facsimile transmission) the same to the
          Adiministrative Agent at its Notice Office;

                  (b) the Borrower shall have delivered to the Administrative
         Agent a new Note for each Bank whose Commitment is increasing as a
         result of this Amendment, reflecting its increased Commitment, which
         Note shall be issued in exchange for the Note currently held by such
         Bank; and

                  (c) the Borrower shall have delivered to the Agent a certified
         copy of resolutions duly adopted by the Borrower authorizing the
         increase in the Total Commitment contemplated by this Amendment.

                  5. This Amendment is limited as specified and shall not
constitute a modification, acceptance or waiver of any other provision of the
Credit Agreement or any other Credit Document.

                  6. This Amendment may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which counterparts when executed and delivered shall be an original, but all
of which shall together constitute one and the same instrument. A complete set
of counterparts shall be lodged with the Borrower and the Administrative Agent.

                  7. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK

                                      * * *




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                  IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Amendment to be duly executed and delivered as of the date
hereof.

                                       FRONTIER INSURANCE GROUP, INC.

                                       By:________________________________
                                             Title:

                                       DEUTSCHE BANK AG, NEW YORK
                                          BRANCH AND/OR CAYMAN ISLANDS
                                          BRANCH,

                                       Individually and as Administrative Agent

                                       By:_________________________________
                                             Title:

                                       By:_________________________________
                                              Title:

                                       BANK OF AMERICA NT & SA

                                       By:________________________________
                                             Title:

                                       THE BANK OF NEW YORK

                                       By:________________________________
                                             Title:

                                       THE FIRST NATIONAL BANK OF
                                          CHICAGO

                                       By:________________________________
                                             Title:

                                       FIRST UNION NATIONAL BANK

                                       By:________________________________
                                             Title:

                                       UNION BANK OF CALIFORNIA

                                       By:________________________________
                                             Title:

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                                                                         ANNEX I

                          LIST OF BANKS AND COMMITMENTS

<TABLE>
<CAPTION>
Bank                                                 Commitment                         Percentage
----                                                 ----------                         -----------
<S>                                                  <C>                                    <C>
Deutsche Bank AG, New York Branch
   and/or Cayman Islands Branch                      $ 37,500,000                           25%
Bank of America NT & SA                              $ 21,000,000                           14%
The Bank of New York                                 $ 21,000,000                           14%
The First National Bank of Chicago                   $ 21,000,000                           14%
First Union National Bank                            $ 21,000,000                           14%
Union Bank of California                             $ 28,500,000                           19%

                  Total:                            $ 150,000,000                          100%
</TABLE>

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