EXECUTION COPY



                               AMENDMENT NO. 11

                          Dated as of November 26, 1999

                                       to

                                CREDIT AGREEMENT

                           Dated as of March 12, 1997

      PENNCORP  FINANCIAL GROUP,  INC., a Delaware  corporation (the "Company"),
the lenders  signatory to the Credit Agreement  referred to below (the "Banks"),
the Managing  Agents and the Co-Agents named therein (the "Agents") and THE BANK
OF NEW YORK, as administrative agent for the Banks (the "Administrative Agent"),
hereby agree as follows:

                                       I.

                                CREDIT AGREEMENT

     1. Credit Agreement.  (a) Reference is hereby made to the Credit Agreement,
dated as of March 12,  1997,  among the Company,  the Banks,  the Agents and the
Administrative  Agent (as amended,  modified or waived prior to the date hereof,
the "Credit Agreement").  Terms used in this Amendment No. 11 (this "Amendment")
that are defined in the Credit  Agreement and are not otherwise  defined  herein
are used herein with the meanings therein ascribed to them.

     (b) The Credit Agreement as amended by this Amendment is and shall continue
to be in full force and effect and is hereby in all respects confirmed, approved
and ratified.

     2. Amendments to the Credit Agreement.  Upon and after the Amendment No. 11
Effective  Date (as defined  below),  the Credit  Agreement  shall be amended as
follows:

     (a) Section 1.01 is hereby amended (i) to add, in alphabetical  order,  the
following new definitions:

     "Amendment  No. 11" shall mean  Amendment  No. 11, dated as of November __,
1999, to the Agreement.

     "Amendment No. 11 Effective  Date" shall have the meaning  ascribed to that
term in Amendment No. 11.

     "American Amicable Holdings  Corporation  Management  Contracts" shall mean
each of the  following:  (i)  Service  Agreement  dated  April 1,  1999  between
American Amicable Holdings  Corporation and Pennsylvania Life Insurance Company,
(ii) Service Agreement dated


                                       1
<PAGE>



April  1,  1999  between  the  American   Amicable   Holdings   Corporation  and
American-Amicable Life Insurance Company of Texas, (iii) Service Agreement dated
April 1, 1999 between the American  Amicable  Holdings  Corporation  and Pioneer
American Life Insurance Company,  and (iv) Service Agreement dated April 1, 1999
between the American  Amicable  Holdings  Corporation and Pioneer  Security Life
Insurance Company.

     "American  Amicable  Holdings  Corporation  Operating  Expenses" shall mean
expenses incurred by American  Amicable Holdings  Corporation in the performance
of its obligations under the American Amicable Holdings  Corporation  Management
Contracts.

     "Executive  Director  Escrow  Amount" shall mean the $994,879 to be paid by
the  Company to fund the escrow  account  established  pursuant to ss.3.3 of the
Release and  Indemnity  Agreement  dated  December  24, 1998 among the  Company,
Pennsylvania  Life Insurance  Company,  PennCorp Life Insurance  Company and the
individual set forth on the signature pages thereto (the  "Executive  Director")
and attached  hereto as Exhibit A, as such  agreement may be amended or modified
from time to time after the Amendment No. 11 Effective Date,  provided that that
any such amendment or  modification  was, in the sound business  judgment of the
Company and its Board of Directors,  in the best  interests of the Company,  and
was consented to in writing by the Majority Banks.

     "KB  Investment"  shall  mean KB  Investment  L.L.C.,  a New  York  limited
liability company.

     "KB Management  Service  Contracts"  shall mean each of the following:  (i)
Amended and Restated  Investment  Agreement  dated  January 1, 1997,  between KB
Management L.L.C. and Southwestern Life Insurance  Company,  (ii) the Investment
Management  Agreements  dated January 1, 1998 between KB Management  L.L.C.  and
American-Amicable   Life  Insurance  Company  of  Texas,  (iii)  the  Investment
Management  Agreements  dated January 1, 1998 between KB Management  L.L.C.  and
Integon  Life  Insurance  Corporation  (now  known as  Security  Life and  Trust
Insurance Company),  (iv) the Investment  Management Agreements dated January 1,
1998  between KB  Management  L.L.C.  and Pacific  Life and  Accident  Insurance
Company, (v) the Investment  Management Agreements dated January 1, 1998 between
KB Management  L.L.C.  and Occidental Life Insurance  Company of North Carolina,
(vi) the  Investment  Management  Agreements  dated  January 1, 1998  between KB
Management  L.L.C.  and Pioneer  American  Insurance  Company,  (vii) Investment
Management  Agreement  dated  January 1, 1998 between KB Management  L.L.C.  and
Pioneer Security Life Insurance Company, (viii) Advisory and Management Services
Agreement  effective as of January 1, 1998 by and among KB Management L.L.C. and
American-Amicable  Life  Insurance  Company  of Texas,  Integon  Life  Insurance
Corporation  (now known as Security Life and Trust Insurance  Company),  Pacific
Life and Accident Insurance Company, Pioneer American Insurance Company, Pioneer
Security  Life  Insurance  Company,  Southwestern  Life  Insurance  Company  and
Occidental Life Insurance  Company,  and (ix) Employee  Benefit Cost Sharing and
Service  Agreement  effective as of September 1, 1998 by and among KB Management
L.L.C.,  Southwestern  Financial Services  Corporation,  American-Amicable  Life
Insurance  Company of Texas,  Marketing  One,  Inc.,  Occidental  Life Insurance
Company of North Carolina, PennCorp Financial Group, Inc. and PennCorp Financial
Services, Inc.

                                  2
<PAGE>



     "KB Management  Operating  Expenses" shall mean operating expenses incurred
by KB Management  L.L.C.  in the  performance  of its  obligations  under the KB
Management Service Contracts.

     "Shareholder  Litigation Settlement Amount" shall mean the $1,500,000 to be
paid by the Company to settle In re PennCorp  Financial Group,  Inc.  Securities
Litigation,  Master File No. 98 Civ.  5998 (LAP) (the  "Shareholder  Litigation"
pursuant to the Memorandum of  Understanding  dated November 11, 1999, a copy of
which is attached as Exhibit B to Amendment  No. 11, as such form may be amended
or  modified  from  time to time or as such may be more  fully  documented  in a
settlement  agreement after the Amendment No. 11 Effective  Date,  provided that
that any such  amendment,  modification.  or  documentation  was,  in the  sound
business  judgment  of the  Company  and its  Board  of  Directors,  in the best
interests of the Company, and was consented to in writing by the Majority Banks.

     (ii) to amend the following existing definitions to read as follows:

     "Commitment" shall mean (i) the amount set opposite each Bank's name on the
signature pages of Amendment No. 11 under the caption "Reduced Commitment",  or,
in the case of a Bank that becomes a Bank pursuant to an assignment,  the amount
of the assignor's  Commitment  assigned to such Bank (in either case as the same
may be  terminated  or  reduced  at any time or from  time to time  pursuant  to
Section 2.04, canceled pursuant to Section 9 or increased or reduced at any time
or from time to time pursuant to  assignments  made in  accordance  with Section
11.06) or (ii) as the context may require,  the  obligation of each Bank to make
RC Loans in an aggregate unpaid principal amount not exceeding such amount.

     "Commitment Stepdown Date" shall mean the Amendment No. 11 Effective Date.

     "Operating  Bank  Account"  shall mean a Bank Account of an Operating  Bank
Account  Subsidiary that is listed on Amended  Schedule 8.29(a) to Amendment No.
11.

     "Permitted  Operating  Account  Withdrawal" shall mean a withdrawal from an
Operating Bank Account to make a payment listed or described on Amended Schedule
8.29(b) to Amendment No. 11, subject to any limitations there set forth.

     "Reduced  Commitment"  shall mean,  as applied to any Bank,  the amount set
forth  opposite such Bank's name under the caption  "Reduced  Commitment" on the
signature pages of Amendment No. 11.

     (b)  Section  2.04(b)(iv)  of the Credit  Agreement  shall be  amended  and
restated as follows:

            "on the Commitment Stepdown Date, the Commitments
            shall be reduced to the amounts set forth under the
            caption "Reduced Commitment," on the signature pages
            attached to Amendment No. 11 (the aggregate of the
            reduction totaling $2,000,000);"

                                       3
<PAGE>



     (c) Section 8.19(b) shall be amended by

          (i)  changing  "(vi)" to "(viii)"  and by adding the  following  after
     subclause (v):

          ", (vi)  withdrawing  the  Shareholder  Litigation  Settlement  Amount
     provided that such payment shall not exceed $1,500,000 and provided further
     that, pursuant to this Section 8.19(b),  should the Company become entitled
     to and receive any portion of the Shareholder  Litigation Settlement Amount
     such amount shall be immediately deposited in the Collateral Account, (vii)
     withdrawing the Executive Director Escrow Amount provided that such payment
     shall not exceed $994,875,  and,  provided  further that,  pursuant to this
     Section  8.19(b),  should the  Company  become  entitled to and receive any
     portion of the  Executive  Director  Escrow  Amount  such  amount  shall be
     immediately deposited in the Collateral Account,"

          (ii) by adding the following sentence at the end thereof:

          "The fact that a  particular  current or future  expenditure  has been
     identified  to the  Administrative  Agent,  the  Banks  or  their  advisors
     pursuant to information  furnished by the Company under this Agreement does
     not mean that the Banks have approved of such expenditure or that funds may
     be withdrawn from the Collateral Account for such expenditure."

          (d) Section 8.29 shall be amended by

          (i) amending Section  8.29(b)(i)(C) by inserting "(1)" after "(C)" and
     by deleting  the "." at the end of that  Section and  replacing it with the
     following:

          "; and (2)  Operating  Bank  Account  Subsidiary  Indebtedness  may be
     repaid by the Company only to permit the Operating Bank Account  Subsidiary
     to which such Indebtedness is owed to fund Permitted Operating Bank Account
     Withdrawals,  and then only to the extent such  payments have not otherwise
     been funded, including a funding with funds that constitute Excluded Funds.
     Any withdrawal by the Company from the  Collateral  Account for the payment
     of  Operating  Bank  Account  Subsidiary  Indebtedness  shall  be  deemed a
     representation  and  warranty  by the  Company  made  at the  time  of such
     withdrawal  that such  withdrawal  is in  accordance  with the  immediately
     preceding sentence."

          (ii) amending Section 8.29(b)(ii)(A) to read as follows:

          "(A) Funds  determined  to be Excluded  Funds by the  Majority  Banks,
     pursuant to Section 8.29(b)(i)(D) hereof, are set forth on Amended Schedule
     8.29(b)(ii)(A).  Funds  referred  to in the  proviso to the  definition  of
     "Excluded  Funds"  shall  constitute  "Excluded  Funds",   whether  or  not
     specified in such Schedule.


                                       4
<PAGE>


                                       II.

                                     GENERAL

      1.    Representations and Warranties.

      In order to induce the Banks to execute and deliver this Amendment No. 11,
the Company hereby represents and warrants as follows:

      (a) The  Company  has  the  power,  and has  taken  all  necessary  action
(including any necessary stockholder action) to authorize,  to execute,  deliver
and perform in accordance with their  respective  terms,  this Amendment and the
Credit  Agreement.  This  Amendment  has been duly executed and delivered by the
duly  authorized  officers of the Company and is, as amended by this  Amendment,
the legal, valid and binding obligation of the Company enforceable in accordance
with its  terms,  except as  enforceability  may be  limited  by any  applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement  of  creditors'  rights  generally.  The  execution,   delivery  and
performance  in accordance  with their  respective  terms by the Company of this
Amendment  and the Credit  Agreement,  as amended by this  Amendment  do not and
(absent any change in any  Applicable  Law or applicable  Contract) will not (A)
require any Governmental  Approval (hereinafter defined) or any other consent or
approval,  including any consent or approval of the  stockholders of the Company
or of any Subsidiary,  to have been obtained,  or any Governmental  Registration
(hereinafter  defined) to have been made, other than Governmental  Approvals and
other  consents and  approvals  and  Governmental  Registrations  that have been
obtained or made, are final and not subject to review on appeal or to collateral
attack, are in full force and effect, or (B) violate, conflict with, result in a
breach of,  constitute a default under,  or result in or require the creation of
any Lien (other than the Security  Interests)  upon any assets of the Company or
any Subsidiary under (1) any Contract to which the Company, or any Subsidiary is
a party or by which the Company,  or any  Subsidiary or any of their  respective
properties  may  be  bound,   or  (2)  any  Applicable   Law.  As  used  herein,
"Governmental Approval" shall mean any authority, consent, approval, license (or
the like) or exemption  (or the like) of any  governmental  unit;  "Governmental
Registration"  shall  mean any  registration  or filing (or the like)  with,  or
report or notice (or the like) to, any governmental unit.

      (b) The  payment  of the  Executive  Director  Escrow  Amount  is the only
remaining  specific cash Liability of the Company in connection with the Release
and Indemnity Agreement that is attached hereto as Exhibit A.

      2.    Conditions to Effectiveness; Amendment No. 11 Effective Date.
This Amendment No. 11 shall be effective as of the date first written above,
but shall not become effective as of such date until the time (such time, the
"Amendment No. 11 Effective Date") as:

      (a)   this Amendment No. 11 has been executed and delivered by the
Company, each of the Banks and the Administrative Agent; and

      (b) all amounts payable  pursuant to Section 11.03 of the Credit Agreement
for which  invoices have been delivered to the Company on or prior to such date,
have been paid in full.


                                       5
<PAGE>

     3. Governing  Law. The rights and duties of the Company,  the Agent and the
Banks under this Amendment shall,  pursuant to New York General  Obligations Law
Section 5-1401, be governed by the law of the State of New York.

     4.   Counterparts.   This   Amendment  may  be  signed  in  any  number  of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto were upon the same instrument.

     5. Headings.  Section  headings in this  Amendment are included  herein for
convenience and reference only and shall not constitute a part of this Amendment
for any other purpose.


                                        6
<PAGE>


      IN WITNESS  WHEREOF,  the parties hereto have caused this Amendment No. 11
to be duly executed as of the day and year first above written.


                                      PENNCORP FINANCIAL GROUP, INC.



                                      By: /s/Scott D. Silverman
                                          -------------------------------------
                                          Name:   Scott D. Silverman
                                          Title:  Executive Vice President


                                      THE BANK OF NEW YORK, as  Administrative
                                      Agent,  Collateral Agent and as a Bank
                                      $17,233,333.38 Reduced Commitment


                                      By: /s/Peter W. Helt
                                          -------------------------------------
                                          Name:   Peter W. Helt
                                          Title:  Vice President


                                      THE CHASE MANHATTAN BANK, as a Managing
                                      Agent and as a Bank
                                      $15,399,999.99 Reduced Commitment


                                      By: /s/Elizabeth A. Kelley
                                          -------------------------------------
                                          Name:   Elizabeth A. Kelley
                                          Title:  Managing Director


                                      FIRST NATIONAL BANK OF CHICAGO, as a
                                      Managing Agent and as a Bank
                                      $15,399,999.99 Reduced Commitment

                                      By:
                                          -------------------------------------
                                          Name:
                                          Title:


                                      BANK OF AMERICA, N.A., formerly known as
                                      Nations Bank, N.A., as a Managing
                                      Agent and as a Bank
                                      $15,399,999.99 Reduced Commitment

                                      By: /s/William E. Livingstone IV
                                          -------------------------------------
                                          Name:   William E. Livingston IV
                                          Title:  Managing Director


                                      FLEET NATIONAL BANK, as a
                                      Co-Agent  and as a Bank
                                      $16,866,666.67 Reduced Commitment

                                      By: /s/Donald R. Nicholson
                                          -------------------------------------
                                          Name:   Donald R. Nicholson
                                          Title:  Senior Vice President



                                      MELLON BANK, N.A., as a Co-Agent
                                      and as a Bank
                                      $13,200,000.00 Reduced Commitment


                                      By: /s/Gary A. Saul
                                          -------------------------------------
                                          Name:   Gary A. Saul
                                          Title:  First Vice President



                                       BANK OF MONTREAL, as a Co-Agent
                                       and as a Bank
                                       $11,000,000.01 Reduced Commitment


                                       By: /s/Thomas E. McGraw
                                          -------------------------------------
                                          Name:   Thomas E. McGraw
                                          Title:  Director



                                      CIBC INC., as a Co-Agent and as a Bank
                                      $11,000,000.01 Reduced Commitment


                                      By: /s/Gerald Girardi
                                          -------------------------------------
                                          Name:   Gerald Girardi
                                          Title:  Execuitve Director
                                                  CIBC World Markets Corp,
                                                  As Agent

                                       7
<PAGE>


                                      DRESDNER BANK AG, NEW YORK AND
                                      GRAND CAYMAN BRANCHES, as a Co-Agent
                                      and as a Bank
                                      $11,000,000.01 Reduced Commitment


                                      By: /s/Lloyd C. Stevens
                                          -------------------------------------
                                          Name:   Lloyd C. Stevens
                                          Title:  Vice President

                                      By: /s/Anthony C. Valencourt
                                          -------------------------------------
                                          Name:   Anthony C. Valencourt
                                          Title:  Senior Vice President


                                      SUNTRUST BANK, CENTRAL FLORIDA NATIONAL
                                      ASSOCIATION
                                      $7,333,333.32 Reduced Commitment


                                      By: /s/T. Michael Logan
                                          -------------------------------------
                                          Name:   T. Michael Logan
                                          Title:  Managing Director


                                      FIRST UNION NATIONAL BANK
                                      $7,333,333.33 Reduced Commitment


                                      By: /s/Thomas L. Stitchberry
                                          -------------------------------------
                                          Name:   Thomas L. Stitchberry
                                          Title:  Senior Vice President


                                      BANK ONE TEXAS, NA
                                      $7,333,333.32 Reduced Commitment


                                      By:
                                          -------------------------------------
                                          Name:
                                          Title:


                                      BEAR STEARNS & CO., INC.
                                      $12,833,333.31 Reduced Commitment



                                      By: /s/Gregory A. Hanley
                                          -------------------------------------
                                          Name:   Gregory A. Hanley
                                          Title:  Senior Managing Director


                                      SG COWEN SECURITIES CORPORATION
                                      $1,833,333.34 Reduced Commitment


                                      By:
                                          -------------------------------------
                                          Name:
                                          Title:



                                       8
<PAGE>


                                      ING (U.S.) CAPITAL CORPORATION
                                      $1,833,333.33 Reduced Commitment


                                       By:
                                          -------------------------------------
                                          Name:
                                          Title:

                                       9
<PAGE>


<TABLE>
<CAPTION>

                                                      Amended Schedule 8.29(a)

                             OPERATING BANK ACCOUNTS

Operating Bank                Operating Bank
Account Subsidiary            Accounts               Depositary Bank
------------------            ---------------        ---------------
<S>                           <C>                    <C>
KB Management LLC             890-0324-708           Bank of New York,
                              (ZBA Disb)             NY, NY

                              890-0168-935           Bank of New York,
                              (DDA)                  NY, NY

                              1574898050 (DDA)       Bank One Texas,
                              (DDA)                  Dallas, Texas

KB Investment LLC             890-0169-060           Bank of New York,
                              (DDA)                  NY, NY

American Amicable Holdings    15606                  Provident Inst.,
Corp.                         (Money Market)         Wilmington, DE

                              890-0168-897           Bank of New York,
                              (DDA)                  NY, NY

Southwestern Financial        890-0169-192           Bank of New York,
Corporation                   (DDA)                  NY, NY

</TABLE>


                                       10
<PAGE>

<TABLE>
<CAPTION>

                                                      Amended Schedule 8.29(b)

                   PERMITTED OPERATING ACCOUNT WITHDRAWALS
           (Capitalized terms used in this Amended Schedule 8.29(b)
               that are not defined in the Credit Agreement are
                         defined on Annex A hereto.)


Operating Bank          Operating Bank
Account Subsidiary      Accounts               Payments Permitted to be Funded
------------------      ---------------        -------------------------------

<S>                     <C>                    <C>
KB Management LLC       890-0168-935           (DDA) KB Management
                                               Operating  Expenses,  to (BNY)
                                               the extent not otherwise Funded.

American-Amicable       890-0168-897           American-Amicable Holdings
Holdings Corporation    (DDA)                  Corporation Operating Expenses,
                        (BNY)                  to the extent not otherwise
                                               Funded.

                        15606                  Payments, to the extent not otherwise
                        (Money Market)         funded, required to pay dividends to
                        (Provident Inst.)      the Company, as described in the Weil
                                               Letter, provided, that such dividend
                                               is, in fact, paid on the date of such
                                               withdrawal.

Southwestern Financial    890-0169-192         Southwestern Financial Corporation
Corporation               (DDA)                Operating Expenses, to the extent not
                          (BNY)                otherwise Funded.

</TABLE>





                                       11
<PAGE>

<TABLE>
<CAPTION>


                                               Amended Schedule 8.29(b)(ii)(A)

                           SCHEDULE OF EXCLUDED FUNDS

          (Numbered Footnote references are to the attached Footnote
         Appendix. Such Footnote Appendix and the Footnotes there set
                forth are an integral part of this Schedule.)

Operating Bank          Operating Bank
Account Subsidiary      Accounts             Depositary Bank               Excluded Funds
------------------      --------             ---------------               --------------
<S>                     <C>                  <C>                           <C>
KB Management  LLC      890-0324-708         Bank of New York,  NY, NY          100%(1)
                        (ZBA Disb)

                        890-0168-935         Bank of New York, NY, NY           0%(3)
                        (DDA)

                        1574898050 (DDA)     Bank One Texas, Dallas,            100%(2)
                                             Texas

KB Investment LLC       890-0169-060         Bank of New York, NY, NY           0%(3)
                        (DDA)

American Amicable       15606                Provident Inst.,                   100%(4)
Holdings Corp.          (Money Market)       Wilmington, DE

                        890-0168-897         Bank of New York, NY, NY           0%(3)
                        (DDA)

Southwestern Financial  890-0169-192         Bank of New York, NY, NY           0%(1)
Corporation             (DDA)



</TABLE>

                                       12
<PAGE>


                                FOOTNOTE APPENDIX

                          TO SCHEDULE OF EXCLUDED FUNDS

1.    Balances in this account shall  constitute  Excluded Funds only if, to the
      extent, and so long as, deposits in this account are used for the purposes
      specified  in the letter  dated,  November  24, from Angela L.  Fontana to
      Charles Vejvoda (the "Weil Letter") attached hereto as Exhibit C.

2.    Balances  in this  account  shall  constitute  Excluded  Funds  until this
      account is closed,  provided  that this  account is closed  promptly  upon
      finalization of the necessary paperwork referenced in the Weil Letter, but
      in any event no later than  January  31,  2000,  or such later date as the
      Administrative Agent may agree to.

3.    Balances shall constitute Excluded Funds only to the extent they represent
      amounts  required for gross payroll and employee  benefits,  provided that
      such amounts are deposited in the applicable  payroll and benefit accounts
      on the day  received.  For this  purpose,  "gross"  payroll  shall include
      withholding taxes, and "employee  benefits" shall include medical,  dental
      and the like employee benefits.

4.    Balances in this account shall  constitute  Excluded Funds only if, and to
      the  extent,  and so long as  balances  in this  account  are  required to
      demonstrate  liquidity in an amount necessary to maintain the intercompany
      notes  referred  to in the Weil  Letter  as  admitted  assets  ("Liquidity
      Balances").

      Balances in excess of such amounts shall not  constitute  Excluded  Funds,
      but the Operating Bank Account Indebtedness resulting from the transfer of
      such  balances to the Company,  pursuant to Section  8.29(b) of the Credit
      Agreement, may be repaid on each date that a dividend in the amount of the
      repayment is paid to the Company, provided that such dividend is, in fact,
      paid on such date.

      If, for  regulatory  purposes,  it is necessary to maintain the  Liquidity
      Balances in a separate  account,  this account  should be divided into two
      accounts,  one containing Liquidity Balances, and the other containing all
      other balances.




                                       13