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                                                               Exhibit 10.4
                              
                                   AMENDMENT NUMBER THREE
                                   THE FARMERS GROUP, INC.
                                 1993 PREMIER AWARD UNIT PLAN    
                                       


     The Farmers Group, Inc., 1993 Premier Award Unit Plan shall be amended as
follows, effective November 10, 1997, in respect of all awards granted in
connection with Performance Periods beginning after 1997.

     A.     The text of Section 2(b), defining "Award Period," shall be
            eliminated and substituted therefor shall be inserted "Reserved."

     B.     Section 2(q) shall be amended by substituting "three (3)" for
            "four (4)" in the first line thereof.

     C.     Section 2(u) shall be eliminated in its entirety.

     D.     Section 3(c) by substituting "5(d)(iv)" for "5(c)(iv)" in the last
            line thereof.

     E.     Section 5(b) shall be amended in its entirety to read as follows:

                   "The total amount of Premier Unit Awards to be granted over
            the Performance Period, will be divided into three equal
            installments.  Premier Award Unit grants will be made in
            installments to Participants on the basis of individual
            performance and the discretion of the Committee.  The final
            value of each installment will be determined at the end of
            the Performance Period."

     F.     The opening paragraph of Section 5(e) shall be amended in its
            entirety to read as follows:

                 Premier Award Units shall generally be paid to a Grantee
            as soon as practicable following the end of the applicable
            Performance Period.  Should a Grantee's continuous employment
            with the Corporation or any Affiliate terminate prior to payout
            for any reason other than death, retirement, or total and
            permanent disability, all outstanding Premier Award Units awards
            (i.e., those that have been awarded but which have not been paid,
            as described in the previous sentence, or deferred, as described
            in Section 6(a) hereof) shall thereupon be forfeited by the
            Grantee; provided, however, that in the case of special
            circumstances the Committee may waive, in whole or in part,
            any or all of the remaining Performance Criteria or any time
            period of service requirement.

     G.     The first paragraph of Section 6(a) shall be amended in its
            entirety to read as follows:

                 "Any individual eligible to participate in the Premier Award
            Unit Plan may request that the payment of all or a portion of any
            payout from any installment of Premier Award Units be deferred for
            annual periods up to five years from the date such amount would
            otherwise be paid under Section 5(e) hereof, or until the
            occurrence of retirement, death or permanent disability, if
            earlier.  Individuals who are "highly compensated" (as defined
            below) as of the date of any election to defer may request that
            the payment of all or a portion of any payout from any installment
            of Premier Award Units be deferred until the occurrence of
            retirement, death or permanent disability.  Any requests for
            deferral must be made to the Committee, in writing, on or before
            March 31 of the last year of the applicable Performance Period
            (e.g., a request must be made on or before March 31, 2000,
            relating to any Premier Award Units granted in 1998, whose value,
            if any, might be determined in 2000, and payable in 2001,
            assuming that the applicable Performance Period is three years
            starting in 1998).  Such requests shall specify that either
            25%, 50%, 75%, or 100% of the payout which might be made is to
            be deferred.  A Participant who is "highly compensated" may elect
            at the time of initially requesting deferral to

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            commence payment of benefits within ninety (90) days of
            retirement, death or the date it is established to the
            satisfaction of the Compensation Committee that the Participant
            has a permanent disability, either in a single payment or in five
            (5) or ten (10) equal annual payments to which will be added an
            interest equivalent from the first payment date computed as
            provided above.  Any participant who is not "highly compensated"
            as of the date of his or her election and who elects in accordance
            with this paragraph to defer payout for a term not to exceed five
            (5) years, shall at the end of such term or as soon as thereafter
            as practicable, receive his or her deferred amount plus earnings
            thereon in one lump sum.  For purposes of this Section 6, the
            Committee shall, in its discretion, determine which Grantees are
            "highly compensated" consistent with the intent that such
            individuals be part of a select group of management or highly
            compensated employees within the meaning of Section 201(2) of the
            Employee Retirement Income Security Act of 1974, as amended."

IN WITNESS WHEREOF, this instrument of Amendment is executed this 10 day of
November, 1997.

By:  /s/ Alan Porter
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