Exhibit 10.1

                           DEFERRED COMPENSATION PLAN
                          FOR NON-EMPLOYEE DIRECTORS OF
                             PMA CAPITAL CORPORATION


  ARTICLE I.  DEFINITIONS
  ---------   -----------

  The following are defined terms wherever they appear in the Plan.

         1.1 "Administrator"  shall mean the person, or committee,  appointed by
the  President  and Chief  Executive  Officer of PMA  Capital,  and charged with
responsibility for administration of the Plan.

         1.2 "Board of  Directors"  or "Board" shall mean the Board of Directors
of PMA Capital.

         1.3 "Business  Day" shall mean any day during which trades occur on the
Nasdaq Stock Market.

         1.4 "Change of  Control"  shall mean a change of control of PMA Capital
of a nature  that would be  required  to be reported in response to Item 6(e) of
Schedule 14A promulgated  under the Securities  Exchange Act of 1934, as amended
(the  "Exchange  Act")  whether  or not  PMA  Capital  is then  subject  to such
reporting  requirements;  provided that,  without  limitation,  such a Change of
Control shall be deemed to occur if,

                  (a) Any  "person"  (as such term is used in Section  13(d) and
14(d) of the  Exchange  Act) is or first  becomes  the  "beneficial  owner"  (as
determined for purposes of Regulation  13D-G under the Exchange Act as currently
in effect),  directly or indirectly,  in a transaction or series of transaction,
of securities of PMA Capital  representing  more than 50% of the combined voting
power of PMA Capital's Common Stock and Class A Common Stock (collectively,  the
"Voting Capital Stock"), or

                  (b)  The   consummation   of  a  merger,   or  other  business
combination  after  which  the  holders  of  the  Voting  Capital  Stock  do not
collectively own 50% or more of the voting capital stock of the entity surviving
such merger or other business combination, or the sale, lease, exchange or other
transfer in a transaction or series of transactions of all or substantially  all
of the assets of PMA Capital, or

                  (c) As a result or in connection with any cash tender offer or
exchange  offer,  merger  or  other  business  combination,  sale of  assets  or
contested election of directors or any combination of the foregoing transactions
(a "Transaction"),  the persons who constituted a majority of the members of the
Board of Directors of PMA Capital  effective before the event that constitutes a
Change of Control,  no longer  constitutes such a majority of the members of the
Board of Directors of PMA Capital then in office.  A Transaction  constituting a
Change in Control  shall only be deemed to have occurred upon the closing of the
Transaction.

         1.5 "PMA Capital  Common Stock" or "Common Stock" or "Stock" shall mean
the Class A Common  Stock of PMA Capital,  par value of five dollars ($5.00) per
share.



                                       1
<PAGE>

         1.6 "Committee"  shall mean the Compensation  Committee of the Board of
Directors of PMA Capital, or the successor to such committee.

         1.7  "Deferral  Election"  shall  mean  the  instrument  executed  by a
Participant  which  specifies  amounts and items of  compensation to be deferred
into the Deferred Compensation Account.

         1.8 "Deferred Compensation Account" shall mean the separate bookkeeping
account established under the Plan for each Participant, as described in Section
3.1.

         1.9 "Director"  shall mean any  individual  serving on the Board who is
not an employee of PMA Capital or any of its subsidiaries or affiliates.

         1.10 "Participant"  shall mean each individual who as a Director of PMA
Capital  participates in the Plan in accordance with the terms and conditions of
the Plan.

         1.11  "Payment  Election"  shall  mean  the  instrument  executed  by a
Participant which specifies the method of payment of deferred compensation.

         1.12 "PMA Capital" shall mean PMA Capital Corporation.

         1.13 "Plan" shall mean the Deferred  Compensation Plan for Non-Employee
Directors of PMA Capital,  as it may be amended or restated from time to time by
the Board of Directors.

         1.14  "Termination of Service" shall mean  termination of services as a
Director of PMA Capital, including but not limited to termination by retirement,
death or disability.

         1.15  "Unforeseeable  Emergency" shall mean a severe financial hardship
to the Participant resulting from a sudden and unexpected illness or accident of
the  Participant or of a dependent (as defined in section 152(a) of the Internal
Revenue Code of 1986, as amended) of the Participant,  loss of the Participant's
property due to  casualty,  or other  similar  extraordinary  and  unforeseeable
circumstances  arising  as  a  result  of  events  beyond  the  control  of  the
Participant.

         1.16  "Valuation  Date"  shall mean the close of  business  on the last
business day of each month.












                                       2
<PAGE>

ARTICLE II.  PARTICIPATION

           2.1    Eligibility to Participate in the Plan.
                  --------------------------------------

           The individuals who are eligible to participate in the Plan are those
persons who serve as Directors of PMA Capital and who are not also  employees of
PMA Capital.

           2.2    Participation in the Plan.
                  -------------------------

                  (a) A  Participant  may  elect  to defer  receipt  of all or a
portion  of the  annual  Board  retainer  fee  and  Board  and  Board  committee
attendance  fees, and such other  compensation for services as a Director as are
specified by the Administrator.

                  (b) The  election  to defer is made by  delivering  a properly
executed  Deferral  Election to the  Administrator.  The Deferral Election shall
specify the item or items of compensation to be deferred, and the amount of such
compensation to be deferred.  The election for payment of compensation  deferred
is made by delivering a properly executed Payment Election to the Administrator.
The  Payment   Election   shall  specify  the  method  by  which  such  deferred
compensation  is to be paid,  and the date or dates for payment of such deferred
compensation.

                  (c) An  election  to defer  compensation  must be filed by the
Participant  prior to the  commencement  of a calendar  year  during  which such
compensation will be paid.

                  (d)  Notwithstanding  Section  2.2(c),  an  election  to defer
compensation  made by an individual who subsequently  begins active service as a
Director of PMA  Capital  that is filed prior to the date upon which such active
service begins, shall be effective according to Section 2.2(e)(2), below.

                  (e) An election to defer  compensation  is effective:  (1) for
the calendar year  beginning  after the election,  and for  subsequent  calendar
years,  unless modified or revoked;  or, (2) if Section 2.2(d) applies,  for the
remainder  of the first  year of active  service,  as of the first day of active
service, and for subsequent calendar years, unless modified or revoked.

           2.3    Elections Pertaining to Payments.
                  --------------------------------

                  (a) No payments  may be made or commence  under the Plan until
the later of (1) at least six (6) months  elapses after a Termination of Service
occurs or (2) the first day of the first  calendar  year  following the date the
Payment Election is filed with the Administrator, except as provided in Sections
4.2, 4.3 and 4.4 below.

                  (b) In executing a Payment  Election,  the  Participant  shall
elect among the following methods of payment:

                        (1) Lump sum payment, or




                                       3
<PAGE>

                        (2) Periodic  Payments - the  payments  shall be made at
least  annually,  (but no more  frequently  than  monthly)  over a period not to
exceed fifteen (15) years.

                  (c)  The  balance  of a  Participant's  Deferred  Compensation
Account  shall be paid,  in all events,  no later than January of the  fifteenth
year following Termination of Service.

                  (d) If there is not in effect as of Participant's  Termination
of Service a valid Payment  Election,  the Participant's  Deferred  Compensation
Account shall be paid in a lump sum.

         All  payments  under the Plan shall be in cash only and no  Participant
shall have any right to obtain payment in any other form.

         2.4 Modification of Elections Pertaining to Payments.
             -------------------------------------------------

         A Participant may request modification of his existing Payment Election
at any time before a Termination  of Service.  The Board shall consider any such
modification request and may grant or deny the request, in its discretion, which
decision shall be final and binding on the Participant.  In determining  whether
the  request  should  be  allowed,  the  Board may  consider  the  Participant's
financial needs, including any changed  circumstances,  as well as the projected
financial needs of PMA Capital.  If the Board determines that the request should
be allowed,  the requested  modifications  shall be made. The Participant  shall
effect the  modifications  through  execution of a new Payment  Election,  which
shall constitute the only Payment Election which is outstanding and effective.

         2.5 Reduction or Termination of Future Deferral.
             --------------------------------------------

                  (a) A  Participant  may  elect  to  reduce  or to  revoke  his
deferral  of  compensation  into his  Deferred  Compensation  Account,  but such
election  shall have effect only  prospectively.  A Participant  shall effect an
election to reduce his deferral of  compensation  by execution of a new Deferral
Election, which shall constitute the only Deferral Election which is outstanding
and effective on a prospective  basis. A Participant shall effect an election to
revoke his deferral of compensation  into his Deferred  Compensation  Account by
informing  the  Administrator  in writing.  Only one  election to reduce and one
election to revoke may be made under this Section 2.5 by each  Participant  in a
calendar year.

                  (b)  An   election   to  reduce  or  to  revoke   deferral  of
compensation  under Section 2.5(a) above shall become  effective on the later of
(1) the first day of the first  calendar  year  following  the date on which the
election  to reduce  or  revoke is made or (2) on the first day of the  calendar
month following receipt of such election by the Administrator except in the case
of an Unforeseeable Emergency under the circumstances described below in Section
4.2.




                                       4
<PAGE>

  ARTICLE III.  COMPENSATION DEFERRED
  -----------   ---------------------

           3.1    Deferred Compensation Account.
                  -----------------------------

           A Deferred Compensation Account shall be established as a bookkeeping
   account  for  each  Director  when  the  Director   becomes  a   Participant.
   Compensation  deferred by a  Participant  under the Plan shall be credited to
   the  Deferred  Compensation  Account  on the  date  such  compensation  would
   otherwise have been paid to the Participant.  Hypothetical income on deferred
   compensation  shall be  credited  to the  Deferred  Compensation  Account  as
   provided in Section 3.3, below.

           3.2    Balance of Deferred Compensation Account.
                  ----------------------------------------

           The balance  credited  to each  Participant's  Deferred  Compensation
  Account  shall  include  compensation   deferred  by  the  Participant,   plus
  hypothetical income, dividends and gains credited with respect to hypothetical
  investments.  Losses from  hypothetical  investments  shall  reduce the amount
  credited to the  Participant's  Deferred  Compensation  Account  balance.  The
  balance credited to each Participant's  Deferred Compensation Account shall be
  determined as of each Valuation Date.

           3.3    Hypothetical Investment.
                  -----------------------

                  (a) Compensation deferred under the Plan which would have been
  paid in cash shall be assumed to be invested,  without charge,  in one or more
  hypothetical  investment vehicles. The hypothetical  investment vehicles shall
  be  specified  from  time  to  time  by  the  Administrator,   except  that  a
  hypothetical Common Stock investment vehicle shall be available.  With respect
  to such  hypothetical  investments  other than the  hypothetical  Common Stock
  investment vehicle, which is discussed in Section 3.3(b) below:

                             (1) Cash  compensation  deferred shall be deemed to
  earn  investment  returns  under  the  hypothetical  investment  vehicle.  The
  Administrator   shall  credit  such  income  to  the  Participant's   Deferred
  Compensation Account, pursuant to Section 3.4 below.

                             (2) The  Committee,  in its  sole  discretion,  may
  provide Plan Participants with options for one or more additional hypothetical
  investment  vehicles for  investment of cash  compensation  deferred under the
  Plan, with respect to which:

                                (A) A  Participant  may modify his  election  of
  hypothetical   investment  and  may  make  any  transfers  between  and  among
  hypothetical  investments,  through a written  request  to the  Administrator,
  provided that,

                                (B) Only one such modification or transfer shall
  be allowed during any calendar quarter;

                                (C) Any such  modification  or transfer shall be
  effective in the second calendar month following receipt of the request by the
  Administrator; and



                                       5
<PAGE>

                                (D) Such  modifications and transfers will be in
  accordance with rules and procedures adopted by the Administrator.

                    (b)  Compensation  deferred under the Plan and credited as a
  bookkeeping entry to the Participant's  Deferred  Compensation  Account may be
  deemed  to be  invested,  hypothetically  and  without  charge,  in  shares of
  hypothetical  Common  Stock.  Shares of  hypothetical  Common  Stock  shall be
  subject to adjustment in order to reflect Common Stock dividends,  splits, and
  reclassifications.  Except  in the  event  of a  Change  of  Control,  amounts
  credited  to  the  Participant's  Deferred  Compensation  Account  and  deemed
  invested in  hypothetical  Common Stock must remain so invested,  and no other
  hypothetical   investment  vehicle  available  hereunder  may  be  substituted
  therefor until the January following the Participant's Termination of Service.
  Thereafter,  changes to the deemed hypothetical investment in Common Stock may
  be made only in accordance  with Section 3.3(a) above;  provided that all such
  changes  occurring  within six months after the  Participant's  Termination of
  Service shall be subject to approval by the Administrator to ensure compliance
  with Section 16 of the Securities Exchange Act of 1934.

                    (c) Amounts  equal to cash  dividends  which would have been
  paid on  shares  of  Common  Stock  shall be  deemed  paid on whole  shares of
  hypothetical Common Stock in the Participant's  Deferred Compensation Account.
  Such amounts shall be deemed reinvested in shares of hypothetical Common Stock
  in the Participant's Deferred Compensation Account.

                    (d) In the event of a Change of Control, the Committee shall
  provide   Participants  with  the  option  for  investment  in  at  least  one
  hypothetical investment vehicle, the annual income earned on which must be not
  less than 50 basis points over the Ten-Year  Constant  Treasury Maturity Yield
  as reported by the Federal Reserve Board, based upon the November averages for
  the preceding year.

          3.4       Time of Hypothetical Investment.
                    -------------------------------

                    (a) The balance of each Participant's  Deferred Compensation
  Account shall be deemed  hypothetically  invested on each Valuation  Date, and
  income  shall  accrue  on such  balance  upon  such  date,  from the  previous
  Valuation Date.

                    (b) Compensation which would have been paid in cash shall be
  deemed  invested in the  Participant's  Deferred  Compensation  Account on the
  Valuation Date next following such hypothetical investment or credit.

                    (c)  Compensation  hypothetically  invested in Common  Stock
   shall be  deemed  invested  in  shares  of  Common  Stock as of the date such
   compensation otherwise would have been payable to the Participant. The number
   of shares  of Common  Stock in which  compensation  is deemed  hypothetically
   invested  in  the  Deferred  Compensation  Account  shall  be  determined  by
   reference  to the average of the high and low price as reported on the Nasdaq
   Stock Market for the day that the said compensation otherwise would have been
   payable to the  Participant  (or the next  Business Day, if such day is not a
   Business Day) provided, that in absence of such information, the Common Stock
   value shall be determined by the Committee.


                                       6
<PAGE>
           3.5     Statement of Account.
                   --------------------

           The  Administrator  shall provide each Participant a statement of his
  Deferred Compensation Account at least annually.


  ARTICLE IV.  PAYMENT OF DEFERRED COMPENSATION
  -----------  --------------------------------

           4.1    Payment of Deferred Compensation.
                  --------------------------------

                    (a) The  Administrator  shall make payments  measured by the
  hypothetical  amounts  credited  to the  Participant's  Deferred  Compensation
  Account in accordance with the Participant's Payment Election.

                    (b)  Compensation  deferred  under the Plan shall be paid to
  the Participant in cash pursuant to Section 4.1(a).

          4.2.    Unforeseeable Emergency Payment.
                  -------------------------------

           Notwithstanding  any other provision of the Plan, if the Board, after
  consideration of a Participant's application,  determines that the Participant
  has an  Unforeseeable  Emergency of such a substantial  nature that  immediate
  payment of compensation deferred under the Plan is warranted, the Board in its
  sole and  absolute  discretion  may  direct  that a payment  equal to all or a
  portion of the balance of the Participant's  Deferred  Compensation Account be
  paid to the Participant in cash. The amount of any such distribution  shall be
  limited to the amount deemed necessary by the Board to alleviate or remedy the
  Unforeseeable Emergency. The payment shall be made in a manner and at the time
  specified by the Board.  A Participant  receiving an  Unforeseeable  Emergency
  payment is deemed to have revoked his  election  for deferral of  compensation
  under  the  Plan,  as of the  time of  Unforeseeable  Emergency  payment.  Any
  subsequent  deferral of  compensation  under the Plan shall  require  that the
  Participant  execute a new  Deferral  Election,  subject  to terms of  Section
  2.2(e)(1)  hereof.  The  circumstances  that will constitute an  Unforeseeable
  Emergency will depend upon the facts of each case,  but, in any case,  payment
  may not be made to the extent that such hardship is or may be relieved:

              (a) Through   reimbursement   or  compensation  by  insurance  or
  otherwise;

              (b) By liquidation of the Participant's  assets, to the extent the
  liquidation of such assets would not itself cause severe  financial  hardship;
  or

              (c) By cessation of deferrals under the Plan.

           Examples of what are not considered to be  Unforeseeable  Emergencies
  include  the need to send a  Participant's  child to  college or the desire to
  purchase a home.

           4.3      Certain Accelerated Payments.
                    ----------------------------

                    (a) If a Participant  terminates service as a Director under
  circumstances  which are such that the Board deems it in the best  interest of
  PMA Capital that payment of the Participant's Deferred Compensation Account be
  accelerated,  then the Board,  upon its own motion and in its sole discretion,



                                       7
<PAGE>

  may direct that the Participant's Deferred Compensation Account be paid to him
  immediately in a lump sum.

                    (b) If, as a result of substantial  and  unforeseen  changes
  affecting  (1)  the  business  of  PMA  Capital,   or  (2)  the  operation  or
  administration  of  the  Plan,  the  Board,  upon  its  own  motion  and  sole
  discretion,  determines  that  the  interests  of the  Participant  and of PMA
  Capital  are best  served  through  accelerated  payment of the  Participant's
  Deferred  Compensation  Account,  the Board on its own  motion and in its sole
  discretion may direct that the  Participant's  Deferred  Compensation  Account
  balances be paid to him immediately in a lump sum.

                    (c) A  Participant  who is not  entitled  to  payment of his
  Deferred Compensation Account under any other provision of Article IV may make
  a written  request  to the  Board for an  accelerated  payment  of his  entire
  Deferred  Compensation  Account balance. If the Board receives such a request,
  it shall make a final  valuation of the  Participant's  Deferred  Compensation
  Account and pay ninety  percent  (90%) of the  Deferred  Compensation  Account
  balance to the  Participant.  The Participant  shall forfeit the remaining ten
  percent (10%) of his Deferred Compensation Account balance to PMA Capital.

           4.4    Payments of a Deceased Participant's Account
                  --------------------------------------------

                    (a)  If  a  Participant  dies  before  his  entire  Deferred
  Compensation  Account  has been paid to him,  the  Administrator  shall pay an
  amount equal to the amount credited to the Deferred  Compensation Account in a
  single lump sum payment to the person(s) or trust(s)  designated in writing by
  the Participant as his  beneficiary(ies)  under the Plan. The Administrator is
  authorized to establish rules and procedures for designations of beneficiaries
  and  shall  have the sole  discretion  to make  determinations  regarding  the
  existence  and  identity of  beneficiaries  and the  validity  of  beneficiary
  designations.

                    (b) Notwithstanding  Section 4.4(a), the Administrator shall
  make payment pursuant to Section 4.4(a), as soon as administratively feasible,
  in a single lump sum payment to the Participant's estate if:

                           (1)  The  Participant  dies  without  having  a valid
  beneficiary designation in effect;

                           (2)  The  Participant's  designated  beneficiary  has
  predeceased him;

                           (3) The Participant's  designated  beneficiary cannot
  be found after what the Administrator determines, in his sole discretion,  has
  been a reasonably diligent search; or

                           (4)  The  Administrator   determines,   in  his  sole
  discretion,  that a  payment  in such  form  is in the  best  interest  of PMA
  Capital.




                                       8
<PAGE>

ARTICLE V.  GENERAL PROVISIONS
---------   ------------------

         5.1 Participant Requests
             --------------------

         A  Participant  shall  take  no part in any  decision  pertaining  to a
request by such Participant under Sections 2.4, 4.2, and 4.3 hereof.

         5.2 Participant's Rights Unsecured.
             -------------------------------

         This  Plan is  intended  to be an  unfunded  plan  for the  benefit  of
Participants.  No Participant shall have any property interest whatsoever in any
specific  assets of PMA Capital.  No action taken  pursuant to the provisions of
this  Plan  shall  create  or be  construed  to  create a trust of any kind or a
fiduciary   relationship   between  PMA  Capital   and  the   Participant,   the
Participant's designated beneficiaries,  or any other person. To the extent that
any person  acquires a right to receive  payments  from PMA  Capital  under this
Plan,  such right shall be no greater  than the right of any  unsecured  general
creditor  of  PMA  Capital  or  of  any  successor  company  which  assumes  the
liabilities of PMA Capital.  The Board may, however, in the event of a Change of
Control of PMA  Capital or for  administrative  reasons,  fully fund the Plan by
means of a contribution to a "rabbi" trust selected by the Administrator.

         5.3 Assignability.
             --------------

                  (a)  No  right  to  receive   payments   hereunder   shall  be
transferable  or  assignable  by a  Participant.  Any  attempted  assignment  or
alienation  of payments  hereunder  shall be void and of no force or effect.  No
such payment,  prior to receipt thereof  pursuant to the provisions of the Plan,
shall be in any  manner  liable  for,  or  subject  to,  the  debts,  contracts,
liabilities, engagements or torts of the Participant.

                  (b)  Notwithstanding  Section  5.3(a),  if  a  Participant  is
indebted to PMA Capital at any time when  payments are to be made by PMA Capital
to the Participant  under the provisions of the Plan, PMA Capital shall have the
right to reduce  the amount of  payment  to be made to the  Participant  (or the
Participant's  beneficiary) to the extent of such indebtedness.  Any election by
PMA Capital  not to reduce such  payment  shall not  constitute  a waiver of its
claim for such indebtedness.

         5.4 Administration.
             ---------------

         Except as otherwise  provided herein, the Plan shall be administered by
the  Administrator  who shall have the authority to adopt rules and  regulations
for carrying out the Plan, and who shall  interpret,  construe and implement the
provisions of the Plan.

         5.5 Amendment.
             ----------

         The Plan may be amended, restated, modified, or terminated by the Board
of  Directors,  except  that  Section  3.3(d) of the Plan may not be  amended or
modified  following a Change of Control without the consent of the  Participant.
No amendment, restatement,  modification, or termination shall reduce the dollar
value  of a  Participant's  Deferred  Compensation  Account  balance  as of  the
Valuation Date immediately preceding such action.



                                       9
<PAGE>

           5.6 Correction of Errors and Inconsistencies.
               -----------------------------------------

           The  Committee  upon  its  own  motion,  or at  the  request  of  the
Administrator  or  of  a  Participant,   shall  have  the  authority  to  effect
consistency  among  deferral  elections,   payment  elections,  or  hypothetical
investment with respect to amounts deferred by a Participant  under the Plan, so
as to avoid or rectify  difficulties in Plan  administration.  In no event shall
such action by the Committee reduce the dollar value of a Participant's Deferred
Compensation Account balance as of the Valuation Date immediately preceding such
action, nor shall the Committee take any action inconsistent with Section 3.3(b)
hereof.  The  Committee  may take such  action with  respect to a  Participant's
Deferred  Compensation  Account,  regardless  of whether  such  Participant  may
continue as a Director of PMA Capital, or whether he may have terminated service
as a Director of PMA Capital.

           5.7 Compliance with Section 16.
               ---------------------------

           If the Administrator determines that, in order to comply with Section
16 of the Securities  Exchange Act of 1934, as amended,  it is necessary for the
Board rather than the Committee to take any action which the Plan authorizes the
Committee to take, the Administrator shall request the Board to do so.

           5.8 Withholding/Employment Taxes.
               -----------------------------

           As required by applicable  tax law, PMA Capital may withhold,  deduct
and  adjust  a  Participant's  Deferred  Compensation  Account  for all  amounts
necessary to satisfy any federal, state or other governmental  withholding taxes
arising  directly or  indirectly  in  connection  with the Plan or any  deferral
hereunder whether under current or future tax laws.

           5.9 No Liability for Interpretation and Administration of Plan.
               -----------------------------------------------------------

           No officer, director, or member of PMA Capital shall be liable to any
person for any action taken or omitted in connection with the interpretation and
administration of this Plan unless  attributable to willful misconduct or fraud.
To the extent coverage is not provided by any applicable  insurance policy,  PMA
Capital  hereby agrees to indemnify the  Administrator  and to hold him harmless
against any and all  liability  for his acts,  omissions and conduct and for the
acts,  omissions  and  conduct of his duly  appointed  agents made in good faith
pursuant to the  provisions  of the Plan,  including,  without  limitation,  any
out-of-pocket  expenses reasonably incurred in the defense of any claim relating
thereto;  provided,  however,  that he shall not voluntarily assume or admit any
liability,  nor, except at his own cost,  shall he make any payment,  assume any
obligations  or incur any  expense  without  the prior  written  consent  of PMA
Capital.

           5.10   Incapacity of Recipient.
                  -----------------------

           If PMA  Capital  finds that any person to whom any payment is payable
under this Plan is unable to take care of his or her affairs  because of illness
or accident,  any payment due (unless a prior claim  therefor has been made by a
duly appointed guardian, committee or other legal representative) may be paid to
the intended recipient's spouse, child, parent,  brother or sister, or any other
person deemed by PMA Capital to have incurred  expense for the person  otherwise
entitled  to  payment,  in  such  manner  and  proportions  as PMA  Capital  may
determine.  Any such  payments,  to the  extent  thereof,  shall  be a  complete
discharge of PMA Capital's obligation under this Plan.



                                       10
<PAGE>

           5.11 Construction.
                -------------

           The masculine  gender where  appearing in the Plan shall be deemed to
include the feminine gender.  The singular shall be deemed to include the plural
and the plural the singular.

           5.12 Successors and Heirs.
                --------------------

           The Plan  and any  properly  executed  elections  hereunder  shall be
binding  upon  PMA  Capital  and the  Participants,  and upon  any  assignee  or
successor in interest to PMA Capital and upon the heirs,  legal  representatives
and beneficiaries of any Participant

           5.13 Governing Law.
                -------------

           This  Plan  shall  be  governed  by the laws of the  Commonwealth  of
Pennsylvania and by applicable Federal law.





Adopted by Board of Directors:      November 3, 1999
















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