Exhibit 10(iii)(c)

                                    As Amended and restated effective 9/21/98

                                 HSB GROUP, INC.
                            LONG-TERM INCENTIVE PLAN

1.   Purposes of Plan

     The purposes of this Plan are: (a) to provide an  additional  incentive for
     Senior  Officers and other  selected key employees to increase the earnings
     of the  Company on a  long-term  basis;  (b) to  attract  and retain in the
     employ of the Company  persons of  outstanding  abilities;  and (c) to more
     closely align the interests of the Senior  Officers and other  selected key
     employees with those of the shareholders of the Company.

2.   Definitions

     (a)  "Affiliate" shall have the meaning set forth in Rule 12b-2 promulgated
          under Section 12 of the Exchange Act.

     (b)  "Beneficial  Owner"  shall  have the  meaning  set forth in Rule 13d-3
          under the Exchange Act.

     (c)  "Board" shall mean the Board of Directors of the Company.

     (d)  "Change in Control" shall be deemed to have occurred if the events set
          forth in any one of the following paragraphs shall have occurred:

          (i) any  Person  is or  becomes  the  Beneficial  Owner,  directly  or
          indirectly,  of  securities  of  the  Company  (not  including  in the
          securities  beneficially owned by such Person any securities  acquired
          directly from the Company or its affiliates)  representing 25% or more
          of the  combined  voting  power  of  the  Company's  then  outstanding
          securities,  excluding any Person who becomes such a Beneficial  Owner
          in connection with a transaction  described in clause (A) of paragraph
          (iii) below; or

          (ii) the  following  individuals  cease for any reason to constitute a
          majority of the number of directors then serving:  individuals who, on
          December 23, 1996,  constitute  the Board and any new director  (other
          than a director  whose  initial  assumption of office is in connection
          with an actual  or  threatened  election  contest,  including  but not
          limited  to a  consent  solicitation,  relating  to  the  election  of
          directors of the Company)  whose  appointment or election by the Board
          or nomination for election by the Company's  shareholders was approved
          or recommended by a vote of at least two-thirds (2/3) of the directors
          then still in office who either were 
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          directors  on  December  23,  1996 or whose  appointment,  election or
          nomination for election was previously so approved or recommended; or

          (iii) there is consummated a merger or consolidation of the Company or
          any  direct  or  indirect  subsidiary  of the  Company  with any other
          corporation,  other  than (A) a merger or  consolidation  which  would
          result in the voting securities of the Company outstanding immediately
          prior to such merger or consolidation  continuing to represent (either
          by remaining  outstanding or by being converted into voting securities
          of the surviving  entity or any parent  thereof),  in combination with
          the  ownership of any trustee or other  fiduciary  holding  securities
          under an employee benefit plan of the Company or any subsidiary of the
          Company,  at least 60% of the combined  voting power of the securities
          of  the  Company  or  such  surviving  entity  or any  parent  thereof
          outstanding  immediately after such merger or consolidation,  or (B) a
          merger or consolidation  effected to implement a  recapitalization  of
          the Company (or similar  transaction) in which no Person is or becomes
          the Beneficial  Owner,  directly or  indirectly,  of securities of the
          Company (not  including in the securities  Beneficially  Owned by such
          Person  any  securities  acquired  directly  from the  Company  or its
          Affiliates)  representing  25% or more of the combined voting power of
          the Company's then outstanding securities; or

          (iv)  the  shareholders  of the  Company  approve  a plan of  complete
          liquidation  or  dissolution of the Company or there is consummated an
          agreement  for  the  sale  or  disposition  by the  Company  of all or
          substantially  all of  the  Company's  assets,  other  than a sale  or
          disposition  by  the  Company  of  all  or  substantially  all  of the
          Company's  assets to an entity,  at least 60% of the  combined  voting
          power of the voting  securities of which are owned by  shareholders of
          the Company in  substantially  the same proportions as their ownership
          of the Company immediately prior to such sale.

     Notwithstanding the foregoing, a "Change in Control" shall not be deemed to
     have occurred by virtue of the consummation of any transaction or series of
     integrated  transactions  immediately following which the record holders of
     the common stock of the Company  immediately  prior to such  transaction or
     series  of   transactions   continue   to  have   substantially   the  same
     proportionate ownership in an entity which owns all or substantially all of
     the assets of the Company immediately  following such transaction or series
     of transactions.

     (e)  "Code" shall mean the Internal Revenue Code of 1986, as amended.

     (f)  "Committee"  shall mean the Human  Resource  Committee of the Board or
          any future committee of the Board performing similar functions.
<PAGE>

     (g)  "Company" shall mean HSB Group,  Inc. and, except in determining under
          this Plan  whether or not any Change in  Control  of the  Company  has
          occurred,  shall include any  successor to its business  and/or assets
          which assumes this Plan by operation of law, or otherwise.

     (h)  "Disability"  shall mean any condition which would entitle an employee
          of the  Company  to receive  benefits  under the  Company's  Long-Term
          Disability Plan.

     (i)  "Dividend Equivalent" shall mean an amount equal to the cash dividends
          that  would  have been paid with  respect  to an award of  Performance
          Contingent Units paid hereunder if the award  constituted  Stock, duly
          issued and  outstanding  on the date on which a dividend is payable on
          the Shares.

     (j)  "Exchange  Act" shall mean the  Securities  Exchange  Act of 1934,  as
          amended.

     (k)  "Fair Market  Value" shall mean the average of the high and low prices
          per share of the  Company's  Shares as  reported by the New York Stock
          Exchange Composite Transaction Reporting System (NYSE) on the date for
          which the Fair Market Value is being  determined,  or if no quotations
          are available for the Company's  Shares,  for the next  preceding date
          for which such a quotation  is  available.  If Company  Shares are not
          then  listed  on the  NYSE,  Fair  Market  Value  shall be  reasonably
          determined by the Committee in its sole discretion.

     (l)  "Participant"  shall mean an  employee of the Company to whom an award
          has been made under the Plan.

     (m)  "Performance  Contingent  Award"  shall  mean an award of  Performance
          Contingent Units.

     (n)  "Performance  Contingent  Unit"  shall mean the right to receive up to
          100% of the  value of  Shares,  which  value  may be paid in cash or a
          Stock Grant,  as  determined  by the  Committee,  contingent  upon the
          achievement of Performance Goals established by the Committee.

     (o)  "Performance  Goals"  shall  mean  specific  levels  of  one  or  more
          Performance  Measures  at  a  corporate  and/or  business  unit  level
          established  in writing by the Committee for a particular  Performance
          Period.

     (p)  "Performance Measures" shall mean any of the following:
           - Insurance Combined Ratio
           - Expense Ratio
           - Net Income Per Share
           - Return on Equity

<PAGE>

           - Total Shareholder Return
           - Return on Assets
           - Revenues
           - Operating Margin
           - Increase in Book Value
           - Market Share

     (q)  "Performance  Period"  shall mean a three-year  period,  or such other
          period established by the Committee during which any Performance Goals
          set by the Committee  with respect to a Performance  Contingent  Award
          are to be measured.

     (r)  "Person"  shall  have the  meaning  given in  Section  3(a)(9)  of the
          Exchange  Act,  as  modified  and used in  Sections  13(d)  and  14(d)
          thereof,  except  that such term shall not  include (i) the Company or
          any of its  subsidiaries,  (ii) a trustee or other  fiduciary  holding
          securities under an employee benefit plan of the Company or any of its
          Affiliates,   (iii)  an  underwriter  temporarily  holding  securities
          pursuant  to an  offering of such  securities,  or (iv) a  corporation
          owned,  directly or indirectly,  by the shareholders of the Company in
          substantially  the same proportions as their ownership of stock of the
          Company.

     (s)  "Plan" shall mean the HSB Group, Inc. Long-Term Incentive Plan.

     (t)  "Retirement"   shall  mean  the   termination   of  employment   under
          circumstances which entitle an employee to receive retirement benefits
          under the Company's Employees' Retirement Plan.

     (u)  "Shares" shall mean the Common Stock of the Company.

     (v)  "Stock  Grant"  shall  mean a grant of Shares or of a right to receive
          Shares  (or their cash  equivalent  or a  combination  of both) in the
          future subject to such  conditions and  restrictions  as the Committee
          shall determine at the time of grant.

3.   Administration of the Plan

     The Plan shall be  administered  by the Committee as defined  herein.  Each
     member of the  Committee  shall be a  "disinterested  director"  within the
     meaning  of Rule 16b-3 of the  General  Rules and  Regulations  promulgated
     under the  Exchange  Act and an  "outside  director"  within the meaning of
     Section  162(m) of the Code.  The  Committee is authorized to interpret the
     Plan and shall adopt  guidelines  for  carrying out the Plan as it may deem
     appropriate.  Such  guidelines  shall be  consistent  with the Plan and may
     include,  but need not be  limited  to,  the size and terms of awards to be
     made and the  conditions  for  payment  of such  awards.  Decisions  of the
     Committee  shall  be  final,   conclusive  and  binding  upon  all  parties
     concerned,  unless  otherwise  determined  by a vote of a  majority  of the
     disinterested members of the Board of Directors.
<PAGE>

4.   Shares Subject To the Plan

     Subject to Section 9 of the Plan the  maximum  number of Shares that may be
     delivered to Participants and their  beneficiaries  under the Plan shall be
     250,000.  Any  Shares  covered  by a Stock  Grant  which  are  subsequently
     forfeited,  withheld to cover tax  withholding  or settled in cash shall be
     deemed to have not been delivered for purposes of  determining  the maximum
     number of Shares available for delivery under the Plan.

5.   Eligibility

     (a)  All  Senior  Officers  of the  Company  (presently  defined  as  Chief
          Executive Officer,  President,  Executive Vice President,  Senior Vice
          President,  Corporate Secretary,  Treasurer, General Counsel and Chief
          Financial Officer) other than any individual expressly excluded by the
          Committee, are eligible to participate in this Plan. An individual who
          is elected by the Board as a Senior Officer following the commencement
          of a Performance  Period  shall,  unless  otherwise  determined by the
          Committee,  be eligible  for an award for such  Performance  Period(s)
          based on such  individual's  Base Salary in effect at the time of such
          election,  and  prorated  for the number of full  months  within  such
          Performance Period that such individual was a Senior Officer.

     (b)  The Committee, in its sole discretion, may designate from time to time
          certain other officers or key employees of the Company, its affiliates
          and subsidiaries who may participate in this Plan.

6.   Establishment of Performance Goals and Performance Contingent Awards

     (a)  Prior to or within ninety days (or such shorter  period as is required
          under Section 162(m) of the Code)  following the  commencement of each
          Performance  Period, the Committee shall establish in writing for each
          Participant,  or all  Participants  as a group,  specific  Performance
          Goals based on one or more Performance Measures.  For each Performance
          Goal an  award  schedule  of  Performance  Contingent  Units  shall be
          established for minimum,  target and maximum  attainment of such goal.
          The actual Performance Contingent Award to be paid to a Participant at
          the conclusion of the  Performance  Period shall be based on the level
          of attainment of the  Performance  Goals  established for such period.
          The Committee may designate that Performance  Contingent  Awards shall
          be credited with Dividend  Equivalents  during the Performance  Period
          which shall be paid when and if such awards are paid.

     (b)  After  Performance  Goals  have been  established,  they  shall not be
          modified in respect to the Performance Period to which they relate.
<PAGE>

7.   Payment of Performance Contingent Awards and Dividend Equivalents

     (a)  Following  the  end  of a  Performance  Period,  the  Committee  shall
          ascertain  and certify in writing  whether and the degree to which the
          Performance  Goals for such period have been met. A Participant  shall
          be entitled  to receive  payment of an amount not  exceeding  the Fair
          Market  Value of the maximum  award of  Performance  Contingent  Units
          established  by the Committee  pursuant to Section 6 hereof based upon
          the level of attainment  of the  Performance  Goals  determined by the
          Committee.  The Committee shall have the authority to reduce the award
          of any Participant even if the Performance Goals  attributable to such
          award have been met. The Committee  shall have no authority  hereunder
          to increase any award calculated under this Plan, except in accordance
          with Section 16.

     (b)  As  soon  as  practicable  following  certification  by the  Committee
          pursuant to Section 7(a),  payment of awards to Participants  shall be
          made.  Payments  shall be made in cash, a Stock Grant or a combination
          of the  foregoing as  prescribed by the Committee and shall be subject
          to such other  conditions  and  restrictions  as the  Committee  shall
          establish.

     (c)  Payment of any award of Dividend Equivalents shall be made at the same
          time as  payment  of the  Performance  Contingent  Award  to  which it
          relates  and shall be made in cash or a Stock Grant as  prescribed  by
          the Committee.

     (d)  The maximum  aggregate  Fair Market  Value of  Performance  Contingent
          Units  (determined  as of the  first  trading  day of the  Performance
          Period)  and  Dividend   Equivalents  which  may  be  awarded  to  any
          Participant for any Performance Period shall not exceed $2 million.

8.   Deferral of Payment

     (a)  A  Participant  may, with  permission of the Committee  elect to defer
          receipt of all or a specified part of any Performance Contingent Award
          and related Dividend Equivalents. Such an election shall be subject to
          such terms and conditions as are prescribed by the Committee. Deferral
          elections are  irrevocable and must be made during the time period and
          in the manner prescribed by the Committee.

     (b)  To the extent that the Committee,  in its discretion,  determines that
          the payment of a Performance  Contingent Award would not be deductible
          by the Company  pursuant to Section  162(m) of the Code, the Committee
          may defer payment of all or the  non-deductible  portion of such award
          until  such time as such  amount  would be  deductible.  The terms and
          conditions of any such deferral shall be prescribed by the Committee.
<PAGE>

     (c)  The right of a Participant to receive any unpaid portion of any amount
          deferred  hereunder  shall be an unsecured  claim  against the general
          assets of the Company.

9.   Adjustments in the Event of Change in Common Stock of the Company

     In the event of any  change in the  Shares of the  Company by reason of any
     stock  dividend,  stock split,  recapitalization,  reorganization,  merger,
     consolidation,  split-up,  combination,  or exchange  of shares,  or rights
     offering  to  purchase  Shares at a price  substantially  below Fair Market
     Value,  or of any  similar  change  affecting  the  Shares,  the  number of
     Performance  Contingent  Units  awarded  which  have not been  paid and the
     number of Shares  covered by a Stock Grant  which have not been  delivered,
     and the  number  of  Shares  which  may be  delivered  hereunder,  shall be
     appropriately  adjusted  consistent  with such change in such manner as the
     Board in its discretion may deem equitable to prevent substantial  dilution
     or  enlargement  of the awards  and rights  granted  to, or  available  for
     Participants   hereunder.   Any  fractional   shares  resulting  from  such
     adjustments shall be eliminated.

10.  No Right to an Award or Continued Employment

     (a)  Nothing  contained in this Plan or in any resolution  adopted or to be
          adopted by the Board of Directors  will  constitute the granting of an
          award  hereunder.  The granting of an award  pursuant to the Plan will
          take  place only when  authorized  by the  Committee.  No award and no
          rights of ownership  thereunder  will be  transferable  otherwise than
          pursuant  to  Section  12.  There  is no  obligation  imposed  on  the
          Committee for uniformity of treatment of Participants under the Plan.

     (b)  Nothing in the Plan shall interfere with or limit in any way the right
          of the Company to terminate any Participant's  employment at any time,
          nor confer upon any Participant any right to continue in the employ of
          the Company.

11.  Rights on Termination of Employment

     (a)  If a  Participant  in this Plan shall  terminate  employment  with the
          Company on account of Retirement or Disability or otherwise  terminate
          employment  with  the  written  consent  of the  Company  prior to the
          expiration  of any  Performance  Period(s)  in  respect  of which such
          Participant  may be eligible for an award, or if a subsidiary at which
          a  Participant  is  employed  shall  cease to be a  subsidiary  of the
          Company prior to the  expiration  of any  Performance  Period(s),  the
          award(s) paid to such Participant  shall be prorated  according to the
          number of months of employment in each such Performance Period.

     (b)  A Participant whose employment terminates by dismissal with or without
          cause, or who voluntarily  terminates employment without consent prior
          to the  expiration  of a Performance  Period,  shall lose any right to
          receive payment of such award.
<PAGE>

     (c)  In no event  shall an award or a portion  thereof the payment of which
          has been deferred pursuant to Section 8 be subject to forfeiture.

12.  Death of a Participant

     (a)  A Participant  may file with the Corporate  Secretary of the Company a
          designation of a beneficiary or beneficiaries on the appropriate form,
          which designation may be changed or revoked by the Participant's  sole
          action,  provided  that the  change or  revocation  is filed  with the
          Corporate Secretary.  In case of the death of the Participant,  before
          or after  termination of employment,  any earned but unpaid portion of
          an award to which he or she is entitled and any deferred portions of a
          deceased  Participant's award shall be delivered to the beneficiary or
          beneficiaries  so designated or, if no beneficiary has been designated
          or survives such Participant,  shall be delivered to, or in accordance
          with  the  directions  of,  the  executor  or  administrator  of  such
          Participant's estate.

     (b)  If  a  Participant  shall  die  during  a  Performance   Period,  such
          Participant's  beneficiary shall only be entitled to receive the award
          declared  for  the  Performance  Period  ending  in  the  year  of the
          Participant's death.

13.  Tax Withholding

     The Company  shall have the right to require  Participants  to remit to the
     Company an amount sufficient to satisfy any tax withholding requirements or
     to deduct from any payments made pursuant to the Plan amounts sufficient to
     satisfy tax withholding requirements.

14.  Modification or Termination

     (a)  The Committee may at any time terminate or from time to time modify or
          suspend, and if suspended,  may reinstate any or all of the provisions
          of this Plan, provided that the Committee may not, without shareholder
          approval,  take any of the following  actions unless such actions fall
          within the  provisions  of  Section 9 of the Plan:  (i)  increase  the
          number of Shares reserved for delivery under the Plan; (ii) change the
          class  of  persons  eligible  to  participate  in the  Plan;  or (iii)
          increase the maximum  amount of awards to be made to  Participants  as
          determined  pursuant to Section  7(d) of the Plan;  and except that no
          modification of this Plan may be made which will adversely  affect any
          rights or  obligations  with  respect to any awards  theretofore  made
          under the Plan.

     (b)  The  Corporate  Secretary of the Company  shall be  authorized to make
          minor or administrative  changes in the Plan or changes required by or
          made desirable by law or government regulation.
<PAGE>


15.  Change in Control

     (a)  In the event of a Change in  Control of the  Company,  this Plan shall
          continue to be binding upon the Company,  any successor in interest to
          the Company and all persons in control of the Company or any successor
          thereto,  and no transaction or series of transactions  shall have the
          effect of reducing or canceling  the award of a  Participant  that has
          been  declared  but not paid  unless  consented  to in writing by such
          affected Participant.

     (b)  As soon as  practicable  following a Change in Control,  a Participant
          shall be paid a lump sum amount in cash equal to the  aggregate  value
          of the  Performance  Contingent  Awards payable to the Participant for
          each of the Performance Periods within which the date of the Change in
          Control  occurs,  calculated  as to each  such  Performance  Period by
          multiplying  the award that the  Participant  would have earned on the
          last day of such Performance Period,  assuming the achievement of each
          of the  Performance  Goals at the target  level  established  for such
          Performance Period, by the fraction obtained by dividing the number of
          full  months  and  any  fractional  portion  of a  month  during  such
          Performance  Period prior to the Change in Control by the total number
          of months  contained in such Performance  Period.  For purposes of the
          preceding  sentence,  the amount of cash  delivered  in payment of the
          value of the Performance  Contingent  Awards shall equal the number of
          Performance   Contingent  Units  constituting  such  each  such  award
          multiplied  by the  greater of (i) the highest  Fair Market  Value per
          share of Stock at any time  during the  60-day  period  preceding  the
          Change in Control and (ii) if  applicable,  the price of a Share which
          is paid or offered to be paid, by any person or entity,  in connection
          with the transaction  constituting  the Change in Control.  The amount
          paid hereunder shall be in lieu of any other awards payable under this
          Plan for the  Performance  Periods  within which the Change in Control
          occurs.

     (c)  Upon a Change in Control,  the restrictions  and deferral  limitations
          applicable  to any Stock  Grant made  pursuant  to Section 7 hereunder
          shall lapse as of the date of such Change in Control.

     (d)  As soon as  practicable  following a Change in Control,  any awards or
          Dividend Equivalents  previously deferred in accordance with Section 8
          hereof,  plus interest  accrued  thereon up until the date of payment,
          shall be paid in full.

16.  Other Plans and Special Awards

     (a)  Nothing  contained in this Plan shall  prohibit  the  Committee or the
          Board from  granting  other  awards or  establishing  other  incentive
          compensation plans
<PAGE>

          providing  for the payment of  incentive  compensation  to  employees,
          including Participants.

     (b)  Notwithstanding  Section  6 and  the  intention  of the  Committee  to
          maintain tax  deductibility  of awards granted  hereunder  pursuant to
          Section 162(m) of the Code, the Committee  reserves the right to grant
          awards  which do not meet the  requirements  of  Section  162(m) as to
          deductibility  (for  example,  awards  based on  measures  other  than
          Performance Measures or not established in accordance with Section 6 )
          in order to  recognize  unanticipated  business  conditions  or events
          which have,  or are  expected  to have,  a  significant  effect on the
          Company.

17.  Unfunded Obligations; Trust Agreement

     (a)  The  Company  will pay from its  general  assets all awards to be made
          hereunder.  However,  the Company may in its  discretion,  establish a
          trust,  escrow  agreement or similar  arrangement  in order to aid the
          Company in meeting its obligations hereunder.

     (b)  Any assets  transferred by the Company into any such arrangement shall
          remain at all times assets of the Company and subject to the claims of
          the  Company's  general  creditors  in  the  event  of  bankruptcy  or
          insolvency of the Company.  No security  interest in such assets shall
          be created in a Participant's  favor and a Participant's  rights under
          this Plan and under any such  arrangement  shall be those of a general
          unsecured creditor of the Company.

18.  Assignment and Alienation

     Benefits under this Plan may not be anticipated, assigned (either at law or
     in equity),  alienated,  or subjected  to  attachment,  garnishment,  levy,
     execution  or other  legal or  equitable  process.  If any  Participant  or
     beneficiary  under this Plan  becomes  bankrupt or attempts to  anticipate,
     alienate,  sell, transfer,  assign, pledge,  encumber or charge any benefit
     under this Plan,  such benefit  shall,  in the discretion of the Committee,
     cease and  terminate,  in which event the  Committee  may hold or apply the
     same or any part  thereof for the benefit of such  Participant,  his or her
     beneficiary, spouse, children, other dependents or any of such individuals,
     in such manner and in such proportion as the Committee may deem proper.

19.  Effective Date and Termination of the Plan

     This Plan, as amended, shall become effective as of January 1, 1998 subject
     to the approval of the shareholders at their annual meeting in 1998. Unless
     earlier  terminated by the Committee  subject to Section 14, the Plan shall
     terminate on December 31, 2003. No  Performance  Contingent  Award shall be
     made  pursuant  to this Plan after the  
<PAGE>

     termination  date, but awards made prior to its termination date may extend
     beyond that date.