FIRST AMENDMENT TO CREDIT AGREEMENT

     THIS FIRST AMENDMENT TO CREDIT  AGREEMENT,  dated as of the 4th day of May,
1999 (this  "Amendment"),  is made among ORION CAPITAL  CORPORATION,  a Delaware
corporation (the "Borrower"),  the banks and financial institutions from time to
time  party to the Credit  Agreement  (as  defined  herein)  (collectively,  the
"Lenders"),  and FIRST UNION NATIONAL BANK ("First  Union"),  as  administrative
agent for the Lenders (in such capacity, the "Administrative Agent").

                                    RECITALS

     The  Borrower,  the Lenders and the  Administrative  Agent are parties to a
Credit Agreement, dated as of July 8, 1998 (as amended, the "Credit Agreement"),
providing for the availability of certain credit facilities to the Borrower upon
the terms and  conditions  set forth  therein.  Capitalized  terms  used  herein
without  definition  shall  have  the  meanings  given  to  them  in the  Credit
Agreement.   

     The Borrower has requested certain amendments to the Credit Agreement,  and
the Lenders have agreed to effect such amendments and waivers upon the terms and
conditions  set  forth  herein.   

                             STATEMENT OF AGREEMENT

     NOW,  THEREFORE,  in  consideration  of the  foregoing  and other  good and
valuable  consideration,  the  receipt  and  sufficiency  of  which  are  hereby
acknowledged,  the parties hereto agree as follows:  

                                   ARTICLE I
                                   AMENDMENTS

     1.1 No Material  Adverse  Change.  Section 4.10 of the Credit  Agreement is
hereby     amended    and    restated    in    its    entirety    as    follows:

     4.10 Material  Adverse  Change.  There has been no Material  Adverse Change
since December 31, 1998, and there exists no event,  condition or state of facts
that  could  reasonably  be  expected  to result in a Material  Adverse  Change;
provided, however, that an increase to the Borrower's reserves and the resultant
pre-tax  charge as of March 31,  1999 in an  amount  not to exceed  $170,000,000
shall  not,  in and of  itself,  be  deemed  to be a  Material  Adverse  Change.

     1.2  Capitalization  Ratio.  Section 6.1 of the Credit  Agreement is hereby
amended and restated in its  entirety as follows:  

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     6.1  Capitalization  Ratio. The Borrower will not permit the Capitalization
Ratio to be greater  than 0.35 to 1.0 as of the last day of any fiscal  quarter,
beginning  with  the  fiscal  quarter  ending   December  31,  1998.   

     1.3  Combined  Statutory  Surplus.  Section 6.2 of the Credit  Agreement is
hereby amended by (a) deleting the reference to "$650,000,000"  and replacing it
with  "$600,000,000"  (b)  deleting the  reference  to  "December  31, 1998" and
replacing  it  with  "December  31,  1999".  

                                   ARTICLE II
                         REPRESENTATIONS AND WARRANTIES

     The Borrower hereby represents and warrants to the Administrative Agent and
each Lender as follows: 

     2.1 Representations and Warranties.  After giving effect to this Amendment,
each of the  representations  and  warranties  of the Borrower  contained in the
Credit Agreement and in the other Credit Documents is true and correct on and as
of the date  hereof with the same effect as if made on and as of the date hereof
(except to the extent any such representation or warranty is expressly stated to
have been made as of a  specific  date,  in which  case such  representation  or
warranty is true and correct as of such date).

     2.2 No Default. After giving effect to this Amendment,  no Default or Event
of Default  has  occurred  and is  continuing.  

                                   ARTICLE III
                                 MISCELLANEOUS

     3.1  Effect  of  Amendment.  From  and  after  the  effective  date  of the
amendments  to the Credit  Agreement  set forth  herein,  all  references to the
Credit  Agreement set forth in any other Credit  Document or other  agreement or
instrument shall, unless otherwise  specifically  provided, be references to the
Credit  Agreement as amended by this  Amendment  and as may be further  amended,
modified,  restated or supplemented from time to time. This Amendment is limited
as specified  and shall not  constitute or be deemed to constitute an amendment,
modification  or waiver  of any  provision  of the  Credit  Agreement  except as
expressly  set forth  herein.  Except as expressly  amended  hereby,  the Credit
Agreement  shall remain in full force and effect in  accordance  with its terms.

     3.2 Governing  Law. This  Amendment  shall be governed by and construed and
enforced in  accordance  with the laws of the State of North  Carolina  (without
regard to the conflicts of law provisions thereof).

     3.3  Expenses.  The  Borrower  agrees  to pay upon  demand  all  reasonable
out-of-pocket  costs and  expenses of the  Administrative  Agent and each Lender
(including,  without limitation,  the reasonable fees and expenses of counsel to
the  Administrative  Agent and each Lender) in connection with the  preparation,
negotiation,  execution  and  delivery of this  Amendment  and the other  Credit
Documents delivered in connection herewith. 

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     3.4  Severability.  To the  extent  any  provision  of  this  Amendment  is
prohibited  by or invalid under the  applicable  law of any  jurisdiction,  such
provision  shall  be  ineffective  only to the  extent  of such  prohibition  or
invalidity  and  only  in  any  such   jurisdiction,   without   prohibiting  or
invalidating  such  provision  in  any  other   jurisdiction  or  the  remaining
provisions of this  Amendment in any  jurisdiction. 

     3.5 Successors and Assigns.  This Amendment shall be binding upon, inure to
the benefit of and be enforceable  by the  respective  successors and assigns of
the  parties  hereto.   

     3.6  Construction.  The headings of the various sections and subsections of
this Amendment have been inserted for convenience  only and shall not in any way
affect  the  meaning  or   construction   of  any  of  the  provisions   hereof.

     3.7  Counterparts;  Effectiveness.  This  Amendment  may be executed in any
number of counterparts and by different parties hereto on separate counterparts,
each of which when so executed and  delivered  shall be an original,  but all of
which shall together constitute one and the same instrument. After execution and
delivery by the parties  hereto,  this Amendment shall be deemed to be effective
as of January 1, 1999.  

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     IN WITNESS  WHEREOF,  the parties  hereto have caused this  Amendment to be
executed by their duly authorized officers as of the date first above written.

                                     FIRST UNION NATIONAL BANK,
                                     as Administrative Agent and as Lender


                                     By:      _______________________________

                                     Title:   _______________________________

















                             [Signatures Continued]

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                                     ORION CAPITAL CORPORATION


                                     By:      _______________________________

                                     Title:   _______________________________




































                             [Signatures Continued]

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                                     BANK OF AMERICA NATIONAL TRUST
                                     AND SAVINGS ASSOCIATION


                                     By:      _______________________________

                                     Title:   _______________________________






































                             [Signatures Continued]




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                                     FLEET NATIONAL BANK


                                     By:      _______________________________

                                     Title:   _______________________________





































                             [Signatures Continued]

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                                     FIRST NATIONAL BANK OF CHICAGO


                                     By:      _______________________________

                                     Title:   _______________________________






































                             [Signatures Continued]




                                       8
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                                     MELLON BANK, N.A.


                                     By:      _______________________________

                                     Title:   _______________________________







































                             [Signatures Continued]

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<PAGE>

                                     STATE STREET BANK AND TRUST COMPANY


                                     By:      _______________________________

                                     Title:   _______________________________



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