QUOTA SHARE RETROCESSION AGREEMENT


This Agreement is made and entered into by and between AMERICAN HALLMARK
INSURANCE COMPANY OF TEXAS, Dallas, Texas (hereinafter called the
"Company") and the Reinsurer specifically identified on the signature
page of this Agreement (hereinafter called the "Reinsurer").

ARTICLE 1

BUSINESS REINSURED

This Agreement is to share with the Reinsurer the interests and
liabilities of the Company under all Policies classified by the Company
as Private Passenger Automobile Business (including Motorist Bodily
Injury and Property Damage, Physical Damage, Uninsured/Underinsured
Motorist Bodily Injury and Property Damage and Personal Injury
Protection) in force, written or renewed by or through American Hallmark
General Agency, Inc., Dallas, Texas for and on behalf of State and
County Mutual Insurance Company, Ft. Worth, Texas (hereinafter called
the  Issuing Carrier ) and assumed by the Company as reinsurance from
the Issuing Carrier, during the term of this Agreement, subject to the
terms and conditions herein contained.

It is understood that the business reinsured under this Agreement is
deemed to include coverages extended for non-resident drivers under the
Motor Vehicle Financial Responsibility Law or the Motor Vehicle
Compulsory Insurance Law, or any similar law of any state or province,
following the provisions of the Issuing Carrier s Policies when they
include or are deemed to include so called  out of state insurance 
provisions.

ARTICLE 2

COVER

The Company will cede, and the Reinsurer will accept as reinsurance, a
75% share of all business reinsured hereunder.


ARTICLE 3

COMMENCEMENT AND TERMINATION

This Agreement shall become effective at 12:01 a.m., Central Standard
Time, January 1, 1997, and shall remain in full force. However, in the
event that any Policy is required by law or regulation to be continued
in force, the Reinsurer will continue to remain liable with respect to
each such Policy until the Issuing Carrier may legally cancel, non-renew
or otherwise eliminate liability under such Policy or Policies.  This
provision will include but is not limited to Policies which must be
issued or renewed because a producing agent, broker or managing general
agent cannot be canceled or has not been timely canceled, until the
expiration date of such Policies.

Upon termination, the Company, at its option, may elect to terminate the
Reinsurer's liability for all losses occurring subsequent to
termination.
<PAGE>
The Reinsurer will return to the Company a portfolio representing the
unearned premium reserve under this Agreement appropriate to the mode of
termination.


ARTICLE 4

TERRITORY

This Agreement will cover wherever the Issuing Carrier's Policies cover.


ARTICLE 5

WARRANTY

It is warranted for purposes of this Agreement that the maximum Policy
limits for which American Hallmark General Agency, Inc. shall have the
authorization to bind the Issuing Carrier for business ceded hereunder
shall be as follows or so deemed:

A.   Bodily Injury, per person/per accident$      20,014/$40,014

B.   Property Damage, per accident                $15,014

C.   Physical Damage                              Actual Cash Value
                                                  (ACV) not to exceed
                                                  $40,014 per vehicle

D.   Personal Injury Protection, per person/per
     accident                                     $2,514

E.   Uninsured/Underinsured Motorist Bodily
     Injury,per person/per accident               20,014/$40,014

F.   Uninsured/Underinsured Motorist Property
     Damage, per accident                         $15,014

In the event of a statutory increase in limits by the State of Texas, or
travel by an insured to a state with greater statutory requirements, the
maximum Policy limits shall be increased to statutory limits in effect.


ARTICLE 6

EXCLUSIONS

This Agreement does not cover:

A.   All business not specifically described in the BUSINESS REINSURED 
     ARTICLE of this Agreement.
B.   Garagekeepers legal liability.
C.   Vendors single interest.
D.   Vehicles principally used as ambulances, fire and police units.
E.   Commercial vehicles rated as such, and all automobile fleets.
F.   Mobile homes.
G.   Automobile dealers.
<PAGE>
H.   War risks as excluded in the attached North American War Exclusion 
     Clause (Reinsurance) No. 08-45.
I.   Business excluded by the attached Nuclear Incident Exclusion     
Clauses - Liability - Reinsurance - U.S.A., No. 08-31.1 and Canada,   
No. 08-32.1.
J.   Business excluded by the attached Nuclear Incident Exclusion     
Clauses - Physical Damage - Reinsurance - U.S.A., No. 08-33 and  Canada
No. 08-34.2.
K.   Assumed reinsurance, except for reinsurance assumed by the Company 
     from State and County Mutual Insurance Company.
L.   Vehicles used in racing or speed events.
M.   Taxis, limos, buses and livery.
N.   Pools, Associations and Syndicates, except losses from Assigned  
     Risk Plans or similar styled plans/pools are not excluded.
O.   Loss or damage or costs or expenses arising from seepage and/or  
pollution and/or contamination, other than contamination from smoke   
damage.  Nevertheless, this exclusion does not preclude any payment of
the cost of the removal of debris of property damaged by a loss 
otherwise covered hereunder, but subject always to a limit of 25% of
the Company's Property Business loss under the original Policy.

Should the Issuing Carrier be assigned a risk under an Assigned Risk
Plan, or similar mandatory plan, which is otherwise excluded by the
foregoing exclusions list, the Reinsurer will waive such exclusions
(other than exclusions H., I. and J.) in respect of such assigned risks.

Errors and omissions notwithstanding, if without the knowledge and
contrary to the instructions of its supervisory personnel, the Issuing
Carrier is bound on a risk specifically excluded hereunder, other than
exclusions H., I., and J., or by an existing insured extending its
operations, such reinsurance as would have been afforded but for the
exclusion shall apply for a period of 30 days following receipt of said
underwriting personnel of knowledge thereof.


ARTICLE 7

ACCOUNTS AND REMITTANCES

A.   Within 60 days following the end of each month, the Company will
render a net account to the Reinsurer for the current Agreement Year. 
Prior Agreement Years having activity during the month will be accounted
for  separately in a similar manner.  Such account will contain the
following:

1.   Net written premium accounted for during the period, being the
gross written premium (including 75% of 50% of the Company's Policy
fees) less returns and cancellations; less

2.   The ceding commission as provided for in this Agreement; less

3.   Loss and loss expense paid on losses occurring during the current
Agreement Year; plus

4.   Subrogation, salvage, or other recoveries on losses occurring
during the current Agreement Year.
<PAGE>
Within 60 days following the end of the month the debtor party will
remit to the creditor party any balance due.

This account will also bear a notation advising of the following
information, separately for each Agreement Year:

1.   Outstanding loss and loss expense reserve at the end of the period. 

2.   The unearned premium reserve at the end of the month.

3.   Should loss attributable to an ISO catastrophe(s) be involved, the
account should bear a notation showing the ISO number(s) and the paid
loss and loss expense and the outstanding loss and loss expenses
applicable.

B.   Within 60 days following the end of each Agreement Year, the
Company shall furnish to the Reinsurer for the Agreement Year any other
information which the Reinsurer may require for its Annual Convention
Statement which may be reasonably available to the Company.


ARTICLE 8

CEDING COMMISSION

The Reinsurer will allow the Company a provisional ceding commission of
30.0% of the written premiums ceded (including 75% of 50% of the
Company's Policy fees) hereunder.  Return commission shall be allowed on
return premiums at the same rate.

ARTICLE 9

COMMISSION ADJUSTMENT

A.   1.   The final ceding commission shall be determined by the loss
experience under this Agreement for each period comprising three
consecutive Agreement Years or lesser period should the Agreement be  
terminated prior to the end of a three Agreement Year period.  There
shall be provisional adjustments and a final adjustment for each period,
all in accordance with the other paragraphs of this Article.

     2.   Within 60 days following the end of each Agreement Year within
each three Agreement Year period, the Company will calculate an adjusted
ceding commission for the portion of the three Agreement Year period
then expired based on premiums earned and losses incurred.  The ceding
commission paid to that date, whether provisional or prior adjustment,
shall be adjusted between the parties as appropriate.  At the end of
each three Agreement Year period, adjustments will continue to be made
annually until all losses have been paid or closed, at which time the
ceding commission will become final.

     3.   Premium earned for the period shall mean all written premium
ceded to this Agreement during the period, including 75% of 50% of the
Company s Policy fees, (less cancellations and returns) plus the
unearned premium reserve at the beginning of the period and less the
unearned premium reserve at the end of the period.
<PAGE>
     4.   Losses incurred for the period shall mean the loss and loss
expense paid by the Reinsurer (less salvages and recoveries received) on
losses occurring during the period, plus loss and loss expense reserves
outstanding on losses occurring during the period and plus an amount for
incurred but not reported losses (IBNR) as provided by the Company.

B.   1.   Should the ratio of losses incurred to premium earned be 73.0%
or higher, then the adjusted ceding commission shall be 23.0%.

     2.   Should the ratio of losses incurred to premium earned be less
than 73.0%, then the adjusted commission shall be determined by adding
one percent (1.0%) to the ceding commission for each one percent
reduction of loss ratio subject to a ceding commission of 30.0% at a
loss ratio of 66.0%.

     3.   Should the ratio of losses incurred to premium earned be less
than 66.0%, then the adjusted commission shall be determined by adding
one percent (1.0%) to the ceding commission for each one percent
reduction of loss ratio subject to a ceding commission of 32.0% at a
loss ratio of 64.0%.

     4.   Should the loss ratio be less than 64.0%, then the commission
shall be further adjusted by adding seven-tenths of one percent (.70%)
to the ceding commission for each one percent reduction in the loss
ratio below 64.0%, subject to a maximum ceding commission of 35.5% at a
loss ratio of 59.0% or less.

C.   1.   Upon termination, any period of less than 12 months from
inception shall be considered as an Agreement Year for purposes of this
Article; any period of less than 12 months from anniversary will be   
considered as part of the preceding Agreement Year.

     2.   Should this Agreement be terminated on a runoff basis wherein
the Reinsurer is liable for losses occurring after the date of
termination, then such runoff period shall be considered as part of the
last Agreement Year.<PAGE>
D.   Should the Reinsurer's participation in this Agreement increase or
decrease within a multi-year adjustment period, the incremental
participation percentage increase or decrease shall be treated as a
separate new or terminated participation, respectively, for purposes of
calculating amounts due hereunder.


ARTICLE 10

DEFINITIONS

A.   The term "Policy" as used in this Agreement shall mean any binder,
policy, or contract of insurance or reinsurance issued, accepted or held
covered provisionally or otherwise, by or through American Hallmark   
General Agency, Inc., Dallas, Texas for and on behalf of the Issuing
Carrier.

B.   The term "Agreement Year" as used in this Agreement shall mean the
12 consecutive months commencing with each July 1 except that the first
Agreement Year shall be the period from inception to July 1, 1997.  In
the event of termination of this Agreement at other than the anniversary
date, the period from the anniversary date to the termination date will
<PAGE>
be considered as part of the last full Agreement Year.  Any period
following termination of this Agreement in which the Reinsurer remains
liable for losses arising out of Policies in force at the date of
termination will be considered as part of the concluding Agreement Year.


ARTICLE 11

ORIGINAL CONDITIONS

All insurances falling under this Agreement shall be subject to the same
terms, rates, conditions and waivers, and to the same modifications,
alterations and cancellations as the respective Policies of the Issuing
Carrier (except that in the event of the insolvency of the Company the
provisions of the INSOLVENCY ARTICLE of this Agreement shall apply) and
the Reinsurer shall be credited with its exact proportion of the
original gross premiums received by the Company. 


ARTICLE 12

CURRENCY

The currency to be used for all purposes of this Agreement shall be
United States of America currency.


ARTICLE 13

LOSS AND UNEARNED PREMIUM RESERVE FUNDING

With respect to loss and unearned premium reserves, funding will be in
accordance with the attached Loss Funding Clause No. 13-04.

                                                                         
ARTICLE 14

TAXES

The Company will be liable for taxes (except Federal Excise Tax) on
premiums reported to the Reinsurer hereunder.

Federal Excise Tax applies only to those Reinsurers, excepting
Underwriters at Lloyd's, London and other Reinsurers exempt from the
Federal Excise Tax, who are domiciled outside the United States of
America.

The Reinsurer has agreed to allow for the purpose of paying the Federal
Excise Tax 1% of the premium payable hereon to the extent such premium
is subject to Federal Excise Tax.

In the event of any return of premium becoming due hereunder, the
Reinsurer will deduct 1% from the amount of the return, and the Company
or its agent should take steps to recover the Tax from the U.S.
Government.

<PAGE>
ARTICLE 15

LOSS AND LOSS EXPENSE

Any loss settlement made by the Company, whether under strict Policy
conditions or by way of compromise, shall be unconditionally binding
upon the Reinsurer in proportion to its participation, and the Reinsurer
shall benefit proportionally in all salvages and recoveries.

The Reinsurer shall bear its proportionate share of all expenses
incurred by the Company in the investigation, adjustment, appraisal or
defense of all claims under Policies reinsured hereunder (excluding,
however, office expenses and salaries of officials of the Company) and
shall receive its proportionate share of any recoveries of such
expenses.

The Company will advise the Reinsurer by separate report, regardless of
any question on liability or coverage, any claim involving the
following:

1.   Fatalities.
2.   Bodily injuries involving:
     a.   Brain stem, quadriplegia, paraplegia or severe paralysis,
     b.   Serious burns,
     c.   Amputations of major limbs,
     d.   Serious impairment of vision.
3.   Potential coverage disputes or bad faith situations which may give 
     rise to a payment for Excess of Policy Limits or Extra Contractual 
     Obligations.
4.   Any claims that do not fall within these categories, but have a  
potential of significant liability to the Reinsurer.


ARTICLE 16

EXTRA CONTRACTUAL OBLIGATIONS AND EXCESS OF POLICY LIMITS

This Agreement shall protect the Company, where the loss includes any
Extra Contractual Obligations for 100% of such Extra Contractual
Obligations.  "Extra Contractual Obligations" are defined as those
liabilities not covered under any other provision of this Agreement and
which arise from handling of any claim on business covered hereunder,
such liabilities arising because of, but not limited to, the following: 
failure by the Issuing Carrier or Company to settle within the Policy
limit, or by reason of alleged or actual negligence, fraud or bad faith
in rejecting an offer of settlement or in the preparation of the defense
or in the trial of any action against its insured or in the preparation
or prosecution of an appeal consequent upon such action.

The date on which any Extra Contractual Obligation is incurred by the
Company shall be deemed, in all circumstances, to be the date of the
original loss.<PAGE>
In the event a loss includes an amount in excess of the Issuing
Carrier s Policy limit, 100% of such amount, in excess of the Issuing
Carrier's Policy limit shall be added to the amount of the Issuing
Carrier s Policy limit, and the sum thereof shall be covered.
<PAGE>
For the purpose of this Article, the word "loss" shall mean any amounts
for which the Issuing Carrier would have been contractually liable to
pay had it not been for the limit of the original Policy.

Notwithstanding the above, as respects any loss which includes either
Extra Contractual Obligations or Excess of Policy Limits or both, the
Reinsurer s limit of liability for Extra Contractual Obligations and/or
Excess of Policy Limits shall be limited to $2,000,000 each loss in
addition to the indemnity loss.

However, this Article shall not apply where the loss has been incurred
due to the fraud of a member of the Board of Directors or a corporate
officer of the Issuing Carrier or Company acting individually or
collectively or in collusion with any individual or corporation or any
other organization or party involved in the presentation, defense or
settlement of any claim covered hereunder.


ARTICLE 17

ASSESSMENTS AND ASSIGNMENTS

The Reinsurer hereby assumes liability for any and all assessments and
assignments imposed as a result of Policies reinsured hereunder (whether
before or after the termination of the Agreement) levied or made by a
guaranty fund, insolvency fund, plan, pool, association or other
arrangement created by statute or regulation including, but not limited
to, fees associated with the Auto Theft Prevention Pool.  The Company
shall account to the Reinsurer for any recovery of such assessments, or
any credit allowed to and realized by the Company from the Issuing
Carrier, and return to the Reinsurer its share of any recovery or
credit.


ARTICLE 18

DELAY, OMISSION OR ERROR

Any inadvertent delay, omission or error shall not be held to relieve
either party hereto from any liability which would attach to it
hereunder if such delay, omission or error had not been made, providing
such delay, omission or error is rectified upon discovery.


ARTICLE 19

INSPECTION

The Company shall place at the disposal of the Reinsurer at all
reasonable times, and the Reinsurer shall have the right to inspect,
through its authorized representatives, all books, records and papers of
the Company in connection with any reinsurance hereunder or claims in
connection herewith.
 
<PAGE>
ARTICLE 20

ARBITRATION

Any irreconcilable dispute between the parties to this Agreement will be
arbitrated in Dallas, Texas in accordance with the attached Arbitration
Clause No. 22-01.1.


ARTICLE 21

SERVICE OF SUIT

The attached Service of Suit Clause No. 20-01.5 - U.S.A. will apply to
this Agreement.


ARTICLE 22

INSOLVENCY

In the event of the insolvency of the Company, the attached Insolvency
Clause No. 21-01 - 1/1/86 will apply.


ARTICLE 23

ENTIRE AGREEMENT

This Agreement sets forth all of the duties and obligations between the
Company and the Reinsurer and supersedes any and all prior or
contemporaneous or written agreements with respect to matters referred
to in this Agreement.  The Agreement may not be modified, amended or
changed except by an agreement in writing signed by both parties.


ARTICLE 24

INTERMEDIARY

Sedgwick Re, Inc. is hereby recognized as the Intermediary negotiating
this Agreement for all business hereunder.  All communications,
including notices, premiums, return premiums, commissions, taxes,
losses, loss adjustment expenses, salvages and loss settlements relating
thereto shall be transmitted to the Reinsurer or the Company through
Sedgwick Re, Inc., 1501 Fourth Avenue, Suite 1400, Seattle, Washington
98101.  Payments by the Company to the Intermediary shall be deemed to
constitute payment to the Reinsurer.  Payments by the Reinsurer to the
Intermediary shall be deemed only to constitute payment to the Company
to the extent that such payments are actually received by the Company.

<PAGE>
ARTICLE 25

PARTICIPATION: QUOTA SHARE RETROCESSION AGREEMENT
               EFFECTIVE:  January 1, 1997

This Agreement obligates the Reinsurer for _______% of the interests and
liabilities set forth under this Agreement.

The participation of the Reinsurer in the interests and liabilities of
this Agreement shall be separate and apart from the participations of
other reinsurers and shall not be joint with those of other reinsurers,
and the Reinsurer shall in no event participate in the interests and
liabilities of other reinsurers.

IN WITNESS WHEREOF, the parties hereto, by their authorized
representatives, have executed this Agreement as of the following dates:


PARTICIPATING REINSURERS

Dorinco Reinsurance Company                         25.00%  


AMERICAN HALLMARK INSURANCE COMPANY OF TEXAS


Date_______________________________________

By_________________________________________
(signature)

___________________________________________
(name)

___________________________________________
(title)



QUOTA SHARE RETROCESSION AGREEMENT

          issued to

AMERICAN HALLMARK INSURANCE COMPANY OF TEXAS