EXHIBIT 10 (d)


 November 7, 2001


 Dorinco Reinsurance Company
 1320 Waldo Avenue, Suite 200
 Midland, Michigan  48642

 Attention:  David E. Chamberlain

 RE:  Loan Agreement dated  March 10, 1997,  and amended by  Amendment No.  1
      executed August 14, 1998, Amendment No.  2 effective March 5, 1999  and
      Amendment No.  3 effective  November 19,  1999 (as  amended, the  "Loan
      Agreement") between Hallmark Financial Services, Inc. ("Borrower")  and
      Dorinco Reinsurance Company ("Lender")

 Dear Mr. Chamberlain:

 The purpose of this letter is  to obtain written acknowledgment of  Lender's
 waiver of the "triggering events" under Subsections 3.a and 3.b. of the Loan
 Agreement for the quarter ended September 30, 2001.

 As you  know,  effective  July 1,  2000,  Borrower's  insurance  subsidiary,
 American Hallmark  Insurance Company  of Texas  ("AH"), entered  into a  new
 reinsurance agreement  with  Lender  which  altered  several  terms  of  the
 previous reinsurance arrangement  between the parties.  Among other  things,
 the new reinsurance  agreement provides that  policy fees are  ceded on  the
 same basis as  premiums rather  than retained by  AH as  provided under  the
 prior arrangement.  This change in treatment of policy fees has  predictably
 had an adverse impact on AH's statutory accounting Loss Ratio (as defined in
 the  Loan  Agreement).  Effective  April 1,  2001,  AH and  Dorinco  further
 amended the reinsurance  agreement to include  a loss  corridor on  policies
 written effective April 1, 2001.  Thus, for losses that fall within the loss
 corridor AH assumes  100% of  the risk.   Additionally,  during the  quarter
 ended September 30, 2001,  AH incurred extraordinary weather-related  losses
 principally in  connection  with a  catastrophic  flood in  Houston,  Texas.
 Finally, although AH has implemented premium rate increases of approximately
 32% during the last twenty-one month period, a significant portion of earned
 premiums as reflected in financial statements ended September 30, 2001,  are
 still at depressed rates.

 The Combined Ratio and the Loss Ratio of AH for the nine month period  ended
 September 30, 2001, exceeded the respective  thresholds of 83% and 107%  set
 forth in Subsections 3.a and 3.b. of the Loan Agreement. AH's Loss Ratio was
 100% and the Combined Ratio was 115%. However, in the absence of the  change
 in treatment of policy fees, the addition of the loss corridor and  weather-
 related claims (particularly the Houston flood which significantly  impacted
 the loss corridor),  the Combined Ratio and  Loss Ratio  for the  nine month
 period  ended  September  30,  2001,   would  have  been  90.5%  and  75.3%,
 respectively.   Further, the change in treatment  of policy  fees  favorably
 impacted  AH's premium  to  surplus  ratio,  as  intended.  The  premium  to
 surplus  ratio  was  at an acceptable  2.73:1 on reported  surplus  of  $6.2
 million  at September  30, 2001.  Therefore,  Borrower requests  a waiver of
 the  "triggering  events"  under  Subsections  3.a. and  3.b.  of  the  Loan
 Agreement for the nine month period ended September 30, 2001.

 Please acknowledge Lender's consent to the requested waiver by executing and
 returning to the undersigned the enclosed duplicate original of this letter.
 Thank you for your courtesy and cooperation in this matter.


 Very truly yours,



 Linda H. Sleeper
 President and CEO


 CONSENTED TO AND AGREED AS OF __________________, 2001:

 DORINCO REINSURANCE COMPANY



 By:  ______________________________

      Name:_________________________

      Title:__________________________