ENDORSEMENT NO. 1

Attaching to and forming part of the GUARANTEE AGREEMENT by and among
DORINCO REINSURANCE COMPANY, AMERICAN HALLMARK INSURANCE COMPANY OF
TEXAS, and AMERICAN HALLMARK GENERAL AGENCY, INC.

IT IS AGREED, effective 12:01 a.m., Central Standard Time, July 1, 1997,
that the fifth, seventh, eleventh and nineteenth paragraphs under
PREAMBLE will read as follows and not as heretofore:

DORINCO has entered into a Quota Share Retrocession Agreement, effective
July 1, 1996, with AMERICAN HALLMARK ("Retrocession Agreement"),
pursuant to which AMERICAN HALLMARK has retroceded to DORINCO a 25%
share of the Interest and Liabilities under the Reinsurance Agreement. 
As respects subject business of the REINSURANCE AGREEMENT written or
renewed on or after July 1, 1997, AMERICAN HALLMARK will retrocede to
DORINCO a 50% share of the Interest and Liabilities under the
Reinsurance Agreement.

NOW, THEREFORE, DORINCO hereby agrees, as respects subject business of
the REINSURANCE AGREEMENT written or renewed on or after July 1, 1997,
to guarantee a 50% share of the full and complete performance of all
terms, conditions and covenants by: (a) AMERICAN HALLMARK under the
REINSURANCE AGREEMENT (Exhibit "A"); (b) GENERAL AGENCY under the
GENERAL AGENCY AGREEMENT (Exhibit "B"); and (c) AMERICAN HALLMARK under
the ADMINISTRATIVE SERVICES AGREEMENT (Exhibit "C").  This GUARANTY
constitutes consideration by DORINCO to STATE AND COUNTY MUTUAL for
entering into the subject agreements with AMERICAN HALLMARK and GENERAL
AGENCY.

If, by action of a state insurance regulatory agency or court of
competent jurisdiction, AMERICAN HALLMARK is found to be insolvent or is
placed in supervision, conservation, receivership, rehabilitation or
liquidation, or has a receiver, supervisor or conservator appointed,
then DORINCO shall fully assume 50% of AMERICAN HALLMARK's obligations
owed to STATE AND COUNTY MUTUAL under the subject agreements, including
but not limited to making all payments that were required of AMERICAN
HALLMARK under the subject agreements. STATE AND COUNTY MUTUAL shall
assign to DORINCO its right to recover from AMERICAN HALLMARK any claims
payments or other payments made by DORINCO to STATE AND COUNTY MUTUAL by
reason of AMERICAN HALLMARK being found to be insolvent or placed in
supervision, conservation, receivership, rehabilitation or liquidation. 
Notwithstanding DORINCO s agreement to fully assume AMERICAN HALLMARK's
obligations, if AMERICAN HALLMARK is found to be insolvent or is placed
in supervision, conservation, receivership, rehabilitation or
liquidation, STATE AND COUNTY MUTUAL shall not be required to pay to
DORINCO any amounts paid by STATE AND COUNTY MUTUAL to AMERICAN HALLMARK
as of that date and/or which STATE AND COUNTY MUTUAL is required to pay
in the future to AMERICAN HALLMARK and /or its supervisor, conservator,
rehabilitator or liquidator.

In the event that either (i) the Texas Department of Insurance requires
cancellation or disallows credit for reinsurance under the REINSURANCE
AGREEMENT or (ii) DORINCO s A.M. Best rating at any time is lower than
A-, DORINCO will immediately secure 50% of AMERICAN HALLMARK's
obligations under the REINSURANCE AGREEMENT via a security fund
agreement to be executed by DORINCO and STATE AND COUNTY MUTUAL, which
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security fund agreement shall be in form and content acceptable to STATE
AND COUNTY MUTUAL.

IN WITNESS WHEREOF, the Parties hereto by their respective duly
authorized representatives have executed this Guaranty as of the dates
first above mentioned.


DORINCO REINSURANCE COMPANY

Attest:

By: ____________________________

Title: _________________________
                                                                      
Date: __________________________


AMERICAN HALLMARK INSURANCE
COMPANY OF TEXAS

Attest:

By: ____________________________

Title: _________________________

Date: __________________________

                                                                      
AMERICAN HALLMARK GENERAL AGENCY, INC.

Attest:

By: ____________________________

Title: _________________________

Date: __________________________