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EIGHTH AMENDMENT
TO  EIGHTH AMENDED AND RESTATED LOAN AGREEMENT
 th DIRECT GENERAL FINANCIAL
SERVICES, INC., DIRECT GENERAL PREMIUM FINANCE
COMPANY DIRECT GENERAL CORPORATION DIRECT GENERAL INSURANCE AGENCY, INC. DIRECT
GENERAL INSURANCE AGENCY, INC. DIRECT GENERAL INSURANCE AGENCY, INC. DIRECT GENERAL INSURANCE AGENCY OF LOUISIANA, INC. DIRECT GENERAL AGENCY OF KENTUCKY, INC. DIRECT ADJUSTING
COMPANY, INC. DIRECT ADMINISTRATION, INC. DIRECT GENERAL INSURANCE AGENCY, INC. DIRECT GENERAL CONSUMER PRODUCTS, INC. FIRST TENNESSEE BANK NATIONAL ASSOCIATION CAPITAL ONE BANK, N.A. U.S. BANK NATIONAL
ASSOCIATION th CAROLINA FIRST BANK JPMORGAN CHASE BANK, N.A. REGIONS BANK th NATIONAL
CITY BANK OF KENTUCKY th FIFTH THIRD BANK, N.A.
(Tennessee) MIDFIRST BANK




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Recitals of Fact
       2




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Agreements
    3




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Exhibit B,
     4




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Exhibit B
         5




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6




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The Revolving Credit Facility.
 7




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Revised Exhibit B
 8




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Revised Exhibit E Revised Exhibit H
   [SEPARATE SIGNATURE PAGES FOLLOW]
 9




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BORROWERS:DIRECT GENERAL FINANCIAL SERVICES, INC., 
a Tennessee corporationBy:

/s/ Brian
G. MooreBrian G. Moore, President DIRECT GENERAL PREMIUM FINANCE COMPANY, 
a Tennessee corporationBy:

/s/ Brian
G. MooreBrian G. Moore, President GUARANTORS: DIRECT GENERAL CORPORATION,
a Tennessee corporationBy:

/s/ William J. HarterWilliam J. Harter,Senior Vice-President DIRECT GENERAL INSURANCE AGENCY, INC., 
a Tennessee corporationBy:

/s/ William
J. HarterWilliam J. Harter,Senior Vice-President [SIGNATURE PAGE CONTINUED]
 S-1




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DIRECT GENERAL INSURANCE AGENCY, INC., 
an Arkansas corporationBy:

/s/ William J. HarterWilliam J. Harter,Senior Vice-President DIRECT GENERAL INSURANCE AGENCY, INC., 
a Mississippi corporationBy:

/s/ William J. HarterWilliam J. Harter,Senior Vice-President DIRECT GENERAL INSURANCE AGENCY OF LOUISIANA, 
INC., a Louisiana corporationBy:

/s/ William J. HarterWilliam J. Harter,Senior Vice-President DIRECT GENERAL AGENCY OF KENTUCKY, INC., 
a Kentucky corporationBy:

/s/ William J. HarterWilliam J. Harter,Senior Vice-President DIRECT ADJUSTING COMPANY, INC., 
a Tennessee corporationBy:

/s/ J. Todd HagelyJ. Todd Hagely,Senior Vice-President and Chief Financial Officer DIRECT ADMINISTRATION, INC., 
a Tennessee corporationBy:

/s/ J. Todd HagelyJ. Todd Hagely,Senior Vice-President and Chief Financial Officer [SIGNATURE PAGE CONTINUED]
 S-2




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DIRECT GENERAL INSURANCE AGENCY, INC., 
a Texas corporationBy:

/s/ William J. HarterWilliam J. Harter,Senior Vice-President DIRECT GENERAL CONSUMER PRODUCTS, INC., 
a Tennessee corporationBy:

/s/ J. Todd HagelyJ. Todd Hagely, President BANKS: FIRST TENNESSEE BANK NATIONAL ASSOCIATIONBy:

/s/
Sam JenkinsTitle:
    Senior Vice President CAPITAL ONE BANK, N.A.By:

/s/
Janet O. RackTitle:
    Senior Vice President U.S. BANK NATIONAL ASSOCIATIONBy:

/s/
Eric CosgroveTitle:
    Assistant Vice President CAROLINA FIRST BANKBy:

/s/
Charles D. ChamberlainTitle:
    Executive Vice President JPMORGAN CHASE BANK, N.A.By:

/s/
Robert D. BondTitle:
    Senior Vice President [SIGNATURE PAGE CONTINUED]
 S-3




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REGIONS BANKBy:

/s/
Nathan RainesTitle:
    Senior Vice President NATIONAL CITY BANK OF KENTUCKYBy:

/s/
Kevin L. AndersonTitle:
    Senior Vice President FIFTH THIRD BANK, N.A. (Tennessee)By:

/s/
Justin P. FontenotTitle:
    Corporate Officer MIDFIRST BANKBy:

/s/
Shawn D. BrewerTitle:
    Vice President AGENT:FIRST TENNESSEE BANK NATIONAL ASSOCIATIONBy:

/s/
Sam JenkinsTitle:
    Senior Vice President S-4




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REVISED EXHIBIT B
 FACILITY COMMITMENTS OF THE BANKS
 AS OF THE EFFECTIVE DATE
  First Tennessee Bank National Association
    
    $
    40,000,000.00
    *Capital One
    
    
    20,000,000.00U. S. Bank National Association
    
    
    30,000,000.00Regions Bank
    
    
    25,000,000.00Carolina First Bank
    
    
    15,000,000.00National City Bank
    
    
    15,000,000.00Fifth Third Bank
    
    
    10,000,000.00JPMorgan Chase Bank, N.A.
    
    
    35,000,000.00MidWest Bank
    
    
    -0-TOTAL:
    
    $
    190,000,000.00
 *
    
    Includes $30,000,000.00 Swing Line Commitment of First Tennessee Bank National
Association.
 AS OF JANUARY 1, 2007
  First Tennessee Bank National Association
    
    $
    40,000,000.00
    *Capital One
    
    
    25,000,000.00U. S. Bank National Association
    
    
    30,000,000.00Regions Bank
    
    
    30,000,000.00Carolina First Bank
    
    
    20,000,000.00National City Bank
    
    
    20,000,000.00Fifth Third Bank
    
    
    15,000,000.00JPMorgan Chase Bank, N.A.
    
    
    35,000,000.00MidFirst Bank
    
    
    10,000,000.00TOTAL:
    
    $
    225,000,000.00
 *
    
    Includes $30,000,000.00 Swing Line Commitment of First Tennessee Bank National
Association.




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REVISED EXHIBIT E
 BORROWING BASE CERTIFICATE
  TOTAL RECEIVABLES FROM POLICYHOLDERS FOR PRIOR REPORT
    
    $
    ADD:New Contracts
    
    $
    LESS:Cash Payments
    
    
    ($________________
    )TOTAL RECEIVABLESFROM POLICYHOLDERS FOR THIS REPORT:
    
    $
    LESS INELIGIBLE RECEIVABLES:Amounts Insured with Insurance Companies with an A.M. Best Rating not in
compliance with Section 8.13 of the Loan Agreement
    
    
    ($_______________
    )Past Due Receivables (See clause (a)(iv) of definition of Eligible Receivables.)
    
    
    ($_______________
    )Receivables in Ineligible States
    
    
    ($_______________
    )Unearned Interest, Finance Charges or Service Charges
    
    
    ($_______________
    )PLUS RECEIVABLES FROM INSURERS QUALIFYING UNDER CLAUSE (b) OF DEFINITION OF ELIGIBLE
RECEIVABLES
    
    $
    SUBTOTAL:Eligible Receivables (See Section 1.1)
    
    $
    TIMES ADVANCE RATE
    
    
    x 85
    %TOTAL AVAILABILITY
    
    $
    LESS LOAN OUTSTANDING (not to exceed $225,000,000.00)
    
    
    ($_______________
    )NET LOAN AVAILABILITY
    
    $
    _______________
   DIRECT GENERAL FINANCIAL SERVICES INC.By:
    __________________________________Title:
    _______________________________ DIRECT GENERAL PREMIUM FINANCE COMPANYBy:
    __________________________________Title:
    _______________________________




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REVISED EXHIBIT H
 COMPLIANCE CERTIFICATE
      ACTUAL
    
    
    COVENANTAFFIRMATIVE COVENANTS (AS TO BORROWER):Section 6.13
    
    Tangible Net Worth
    
    
    
    
    
    
    >$9,500,000Section 6.14
    
    Ratio of Eligible Receivables to Debt
    
    
    
    
    
    
    >1.05:1.00Section 6.15
    
    Ratio of Unearned Premiums to Loan Amount
    
    
    
    
    
    
    >1.1:1.0AFFIRMATIVE COVENANTS (AS TO DGC):Section 6.12
    
    Loan Amount to Net Worth
    
    
    
    
    
    
    <1.75:1.00Section 6.13
    
    Tangible Net Worth
    
    
    
    
    
    
    >$200,000,000
    **Section 6.16
    
    Debt Service Coverage
    
    
    
    
    
    
    >1.50:1.00




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EVENTS OF DEFAULT AS MEASURED ON AFFILIATED INSURERS:
 Section 8.4
    
    Capital Adequacy Ratio
    
    ___
    
    Event of Default if=4.00 to 1.00Section 8.5
    
    Liquidity Ratio
    
    ___
    
    Event of Default if<1.0:1.0Section 8.6
    
    Minimum Capital Surplus
    
    ___
    
    Event of Default if<$150,000,000.00Section 8.8
    
    Risk Based Capital*
    
    ___
    
    Event of Default if<250%
 FUNDED DEBT / EBITDA CALCULATION:
  _______
    
    Greater than 2.0 to 1.0
    
    (Actual Ratio:_________________)_______
    
    Less      than 2.0 to 1.0
    
    (Actual Ratio:_________________)
 
 *
    
    Measured Annually**
    
    Adjusted as provided in Section 6.13.   DIRECT GENERAL FINANCIAL SERVICES INC.By:
    ____________________________________Title:
    _________________________________ DIRECT GENERAL PREMIUM FINANCE COMPANYBy:
    __________________________________Title:
    ________________________________ DIRECT GENERAL CORPORATIONBy:
    ___________________________________Title:
    ________________________________ Exhibit H-2