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                                                                EXECUTION COPY
     
     
     
                   ASSIGNMENT AGREEMENT dated as of June 24, 1997, between ARM
             FINANCIAL GROUP, INC., a Delaware corporation (the "BORROWER"),
             Integrity Holdings, Inc., a Delaware corporation ("HOLDINGS" and
             together with the Borrower, the "ASSIGNORS") and THE CHASE
             MANHATTAN BANK, a New York banking corporation ("CHASE
             MANHATTAN"), as representative for the Secured Parties (as
             defined herein) (in such capacity, the "REPRESENTATIVE").
     
        Reference is made to the Credit Agreement dated as of June 24, 1997
(as amended, supplemented or otherwise modified from time to time, the "CREDIT
AGREEMENT"), among the Borrower, the financial institutions party thereto as
lenders (the "LENDERS") and Chase Manhattan, as administrative agent (in such
capacity, the "ADMINISTRATIVE AGENT"). The Lenders have agreed to extend credit
to the Borrower pursuant to, and subject to the terms and conditions specified
in, the Credit Agreement. The obligations of the Lenders to extend credit under
the Credit Agreement are conditioned upon, among other things, the execution and
delivery by the Assignors of and the consent of certain parties to, an
assignment agreement in the form hereof to secure (a) the due and punctual
payment by the Borrower of (i) the principal of and interest on the Loans, when
and as due, whether at maturity, by acceleration, upon one or more dates set for
prepayment or otherwise and (ii) all other monetary obligations of the Borrower
to the Secured Parties under the Credit Agreement and the other Loan Documents
to which the Borrower is a party, (b) the due and punctual performance of all
other obligations of the Borrower under the Credit Agreement and the other Loan
Documents to which the Borrower is a party, (c) the due and punctual payment by
the Borrower of all obligations in respect of all Permitted Swaps that provide,
in the respective instruments creating such Permitted Swaps, that such Permitted
Swaps are to be secured pursuant hereto (each such Permitted Swap being referred
to herein as a "PERMITTED SECURED SWAP") and (d) the due and punctual
performance of all Obligations under the Guarantee Agreement (all the foregoing
obligations being collectively called the "OBLIGATIONS").
     
     Accordingly, the Assignors and the Representative hereby agree as follows:
     
ARTICLE I. DEFINITIONS
     
     SECTION 1. TERMS DEFINED IN THE CREDIT AGREEMENT. Terms used herein
and not otherwise defined herein shall have the meanings set forth in the Credit
Agreement.
     
     SECTION 2. ASSIGNMENT. As security for the payment or performance, as
the case may be, of the Obligations, each Assignor hereby assigns and grants a
security interest in all of its right, title and interest, claims and remedies
and all other benefits in, to and under all tax sharing agreements between the
Borrower and the Subsidiaries and all management agreements between the Borrower
and the Subsidiaries (together, the "ASSIGNED AGREEMENTS"). The foregoing
assignment shall include (a) any and all rights of such Assignor to receive and
demand payments under any and all Assigned Agreements, (b) any and all rights of
such Assignor to receive and compel performance under any and all Assigned
Agreements and (c) any and all rights, interests and claims of such Assignor now
existing or hereinafter arising under any and all Assigned Agreements.

     SECTION 3. NO ASSUMPTION OF LIABILITY. The assignment and security
interest granted herein is granted as security only and shall not subject the
Representative or any of (a) the Lenders party to the Credit Agreement, (b) the
Administrative Agent in its capacity under each Loan Document, (c) the
beneficiaries of any indemnification obligation undertaken by any Pledgor or
Grantor under any Loan Document, (d) the successors and assigns of the foregoing
or (e) the Lenders in their respective capacities as counterparties in respect
of any Permitted Secured Swaps (collectively, the "SECURED PARTIES") to, or in
any way alter or modify, any obligation or liability of any Assignor with
respect to or arising out of any of the Assigned Agreements.

     SECTION 4. ACTIONS PRIOR TO AN EVENT OF DEFAULT. Unless and until the
Representative shall have notified the Borrower that an Event of Default shall
have occurred and be continuing, each Assignor may perform its respective
obligations under the Assigned Agreements and may take any other actions in
respect of such Assigned Agreement in any lawful manner not inconsistent with
the provisions of this Agreement, the Credit Agreement or any other Loan
Document.

     SECTION 5. GOVERNING LAW. THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

     SECTION 6. COUNTERPARTS. This Assignment Agreement may be executed in
two or more counterparts, each of which shall constitute an original, but all of
which when taken together shall constitute one and the same instrument. Delivery
of an executed counterpart of a signature page of this Assignment Agreement by
telecopier shall be effective as delivery of a manually executed counterpart of
this Assignment Agreement.


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     SECTION 7. EFFECTIVENESS. This Assignment Agreement shall not be
effective until each of Integrity, National Integrity and National Mutual of
Australasia shall have given written consent to the assignment of the Assigned
Agreements to which it is a party.

     SECTION 8. TERMINATION. This Assignment Agreement and the security
interests granted hereby shall terminate when the principal of and interest on
all the Loans shall have been indefeasibly paid in full, the Commitments shall
have been terminated and (if due and payable on the first date that the
principal of and interest on all Loans have been paid in full and the
Commitments have been terminated) all Fees, expenses and other amounts payable
under any Loan Document shall have been paid.


     IN WITNESS WHEREOF, the parties hereto have duly executed this
Assignment Agreement as of the day and year first above written.


                                 ARM FINANCIAL GROUP, INC.,

                                  by
                                  -------------------------------
                                   Name:
                                   Title:


                                  by
                                  -------------------------------
                                   Name:
                                   Title:
     
                                 INTEGRITY HOLDINGS, INC.,
     
                                  by
                                  -------------------------------
                                   Name:
                                   Title:
     
     
                                 THE CHASE MANHATTAN BANK, as representative for
                                 the Secured Parties,
     
                                  by
                                  -------------------------------
                                   Name: 
                                   Title: 
     
Consented to by:

INTEGRITY LIFE
INSURANCE COMPANY,
     
 by
 ----------------------------
  Name: 
  Title:
     
     
NATIONAL INTEGRITY
LIFE INSURANCE COMPANY,

 by
 ----------------------------
  Name:
  Title: