**Exhibit
      10.12**














**SECOND
      AMENDMENT**


**TO
      THE**


**PMA
      CAPITAL CORPORATION EXECUTIVE DEFERRED COMPENSATION PLAN**


**(As
      Amended and Restated Effective January 1, 2000)**
























**July
      2004**

















**SECOND
      AMENDMENT**


**TO
      THE**


**PMA
      CAPITAL CORPORATION EXECUTIVE DEFERRED COMPENSATION PLAN**


**(As
      Amended and Restated Effective January 1, 2000)**




**WHEREAS,
      PMA Capital Corporation** (then
      known as the Pennsylvania Manufacturers Corporation) (the “Plan Sponsor”) adopted
      the **PMA
      Capital Corporation Executive Deferred Compensation Plan** (then
      known as the PMC Executive Deferred Compensation Plan) (the “Plan”) originally
      effective February 1, 1988, to permit eligible executives to defer receipt
      of a
      portion of their annual compensation; and




**WHEREAS,** the
      Plan
      is intended to be an unfunded arrangement, maintained primarily for the purpose
      of providing deferred compensation for a select group of management and/or
      highly compensated employees of the Plan Sponsor and its affiliated employers
      within the meaning of Sections 201(2) and 401(a)(1) of the Employee Retirement
      Income Security Act of 1974, as amended; and




**WHEREAS** ,
      the
      Plan was last amended and restated effective January 1, 2000 and was amended
      by
      the First Amendment thereto effective January 1, 2003; and




**WHEREAS** ,
      the Plan
      Sponsor now desires to amend the Plan to clarify the disposition of forfeitures
      under the Plan, effective January 1, 2004; and




**WHEREAS,** under
      Sections 8.1(a) and 10.4 of the Plan, the Plan Sponsor has reserved the right
      to
      amend the Plan with respect to all Participating Companies at any time, subject
      to certain inapplicable limitations;




**NOW,
      THEREFORE** ,
      effective January 1, 2004, except as otherwise specifically provided herein,
      the
      Plan Sponsor hereby amends the Plan as follows:




**1.**  **Section
      6.2(b)(3) of the Plan is amended to read as follows:**




(3)  Upon
      receipt of a Participant's election, the Administrator shall (i) reduce the
      balance of the Participant's Deferred Benefit Accounts by the full amount that
      the Participant has requested, and (ii) direct the Plan Sponsor to pay the
      Participant the reduced benefit. The amount by which the benefit is reduced
      shall be automatically forfeited without any further action or consent of the
      Participant. Any forfeiture made as a result of this Section 6.2(b) shall be
      used as follows: first, to pay Plan administrative expenses, and second, to
      reduce the amount of Participating Company contributions to the
      Plan.







**IN
      WITNESS WHEREOF, PMA CAPITAL CORPORATION** has
      caused these presents to be duly executed, under seal, this 1st day of July,
      2004.









**Attest:**
            
            **PMA
                CAPITAL CORPORATION****[SEAL]**/s/
                Robert L. Pratter
            
            /s/
                William E. HitselbergerRobert
                L. Pratter, Secretary
            
            William
                E. Hitselberger,Senior
                Vice President,Treasurer
                & Chief Financial Officer









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