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Effective: July 1, 1997
Amended & Restated:  August 7, 1997
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                       MMI COMPANIES, INC.
                                
                      AMENDED AND RESTATED
                                
                     RETIREMENT EQUITY PLAN
                                
                                
                                
                       ARTICLE I - PURPOSE
                                
1.   This  Plan  is adopted to provide a select group  of  highly
     compensated and managerial employees of MMI Companies, Inc. and
     its subsidiaries covered under the MMI Companies, Inc. Savings
     and Profit Sharing Plan (the "Basic Plan"), the opportunity to
     accumulate deferred compensation which cannot be accumulated
     under the Basic Plan because of the limitations on deferrals
     under Internal Revenue Code (the "Code") Section 401(k) (the
     "401(k) Limits"), the limitations on elective deferrals under
     Code Section 402(g) (the "402(g) Limits"), or the limitations on
     tax-qualified pension plan benefits under Code Section 401(a)(17)
     (the "401(a)(17) Limits").
     
                                
                                
                    ARTICLE II - DEFINITIONS
                                
1.   ACCOUNTS  means the accounts maintained under this  Plan  on
     the books of the Company for the benefit of an Eligible Employee.
     
2.   BASIC  PLAN means the MMI Companies, Inc. Savings and Profit
     Sharing Plan, as amended from time to time.
     
3.   BOARD means the Board of Directors of MMI Companies, Inc.
     
4.   CODE means the Internal Revenue Code of 1986, as amended
     from time to time.
5.   COMMITTEE  means  the  Personnel and Compensation  Committee
     appointed by the Board.
     
6.   COMPANY means MMI Companies, Inc. or any company which is a
     successor as a result of merger, consolidation, liquidation,
     transfer of assets or other reorganization.


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7.   ELIGIBLE  401(k)  COMPENSATION  means  the  portion  of   an
     Eligible  Employee's compensation with respect to which he or she
     is eligible to make a deferral election under the Basic Plan
     (determined without regard to the 401(k) Limits, 402(g) Limits,
     or 401(a)(17) Limits).
     
8.   ELIGIBLE  EMPLOYEE means, for any Plan Year, an employee  of
     the Company, or of a subsidiary of the Company that has adopted
     the  Basic  Plan, (i) who is a member of a select  group  of
     management  or highly compensated employees as  defined  for
     purposes of Sections 201(2), 301(3) and 401(a)(1) of ERISA, (ii)
     who  makes an election to defer Eligible 401(k) Compensation
     and/or annual incentive bonus(es), as set forth in Article III
     below,  and  (iii)  who  satisfies the medical  underwriting
     requirements  for the issuance of a Policy and completes  an
     application form for issuance of a Policy.  The Committee shall
     establish criteria for determining which employees are members of
     the select group described in clause (i), which criteria may
     include  the  identification of individual  employees.   The
     Committee may permit an employee who would otherwise be eligible
     to participate notwithstanding the fact that he or she does not
     qualify under clause (iii), in which event Section 6.3 shall not
     apply to such Eligible Employee and the Committee or its designee
     may make such adjustments as may be appropriate to determine such
     Eligible Employee's earnings under Section 7.2.
     
9.   ERISA  means the Employee Retirement Income Security Act  of
     1974, as amended from time to time.
     
10.  PLAN  means  this MMI Companies, Inc. Amended  and  Restated
     Retirement Equity Plan.
     
11.  PLAN  YEAR  means the six-month period ending  December  31,
     1997 and the twelve-month period ending each subsequent December
     31 during which the Plan is in effect.
     
12.  POLICY  means a variable life insurance policy issued  by  a
     carrier selected by the Committee which provides for the death
     benefit provided in Section 6.3 and permits the investment of
     funds in one or more investment funds as provided in Section 7.2.
     
                                
                                
               ARTICLE III -EMPLOYEE CONTRIBUTIONS
                                
1.   SALARY  REDUCTION CONTRIBUTIONS.  An Eligible Employee  may,
     for any Plan Year in which he or she is an Eligible Employee,
     elect to accept a reduction in Eligible 401(k) Compensation from
     the Company equal to either a whole percentage of his or her
     Eligible 401(k) Compensation or a fixed dollar amount per payroll
     period.   Elections shall be made, modified and  revoked  in
     accordance with Section 3.3 and, while an
     
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     election  is in effect, the applicable percentage or  amount
     of  each  payment of Eligible 401(k) Compensation  shall  be
     withheld  and credited to the Eligible Employee's Retirement
     Equity Contribution Account (as referred to in Section 7.1).
     
2.   BONUS   REDUCTION   CONTRIBUTIONS.   An  Eligible   Employee
     (regardless of whether he or she has elected a reduction in his
     or her Eligible 401(k) Compensation pursuant to Section 3.1)
     may,  for  any Plan Year in which he or she is  an  Eligible
     Employee,  elect to accept a reduction in his or her  annual
     incentive bonus(es) from the Company, if any, equal to either a
     whole percentage of his or her incentive bonus(es) or a fixed
     dollar amount.  Elections shall be made, modified and revoked in
     accordance with Section 3.3 and, the portion, if any, which the
     Eligible Employee has elected shall be withheld from her or her
     incentive bonus(es) and credited to his or her Retirement Equity
     Contribution Account.
     
3.   ELECTIONS.  Initial elections pursuant to Section 3.1  shall
     be made as soon as practical after the adoption of this Plan, and
     thereafter elections may be made, modified and revoked semi-
     annually (as of January 1 and July 1 of each Plan Year) or at
     such  other  intervals as the Committee may determine.   Any
     Eligible Employee who does not affirmatively make a new election
     under Section 3.1 as of any election date shall be deemed to have
     continued his or her old election in effect, except  as  the
     Committee may otherwise permit.  Elections under Section 3.2
     shall be made annually at a time determined by the Committee
     prior to the date on which Eligible Employees have the right to
     receive their incentive bonuses.  Elections, once made, may not
     be modified or revoked until the next election date, subject to
     such exceptions as the Committee may allow; provided that, to the
     extent required by applicable law, an Eligible Employee  may
     revoke his or her election entirely on a prospective basis, but
     shall thereafter no longer be considered an Eligible Employee.
     The minimum aggregate amount which any Eligible Employee may
     elect to have withheld during any Plan Year (under either Section
     3.1 or 3.2 or any combination thereof) shall be $3,500.00.
     
4.   RULES   AND  PROCEDURES.   The  Committee  shall  have   the
     authority  to establish rules and procedures for making  and
     implementing elections, which may include changing the frequency
     of election dates, limiting the amount withheld from any Eligible
     Employee  or  group  of Eligible Employees,  and  permitting
     exceptions  to  the  election rules on an individual  basis;
     provided, however, that in no event shall any election apply to
     any payment of Eligible 401(k) Compensation or incentive bonus
     that the Eligible Employee has already received, or has the right
     to receive, when the election is made.
     
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           ARTICLE IV - EMPLOYER MATCHING CONTRIBUTION
                                
1.   AMOUNT  OF  CONTRIBUTIONS.  Subject  to  the  limitation  in
     Section 4.2, as of December 31 and June 30 of each Plan Year the
     Company will credit to each Eligible Employee's Retirement Equity
     Matching Account (as referred to in Section 7.1) an amount equal
     to the matching contribution which the Company would have made to
     the Eligible Employee's Matching Employer Contribution Account
     under  the Basic Plan if the amount credited to the Eligible
     Employee's Retirement Equity  Contribution Account under Sections
     3.1 and 3.2 since the last such date had been contributed as
     before-tax savings contributions to the Basic Plan.
     
2.   LIMITATION.  Anything else contained herein to the  contrary
     notwithstanding, the amount credited to an Eligible Employee's
     Retirement Equity Matching Account for any Plan Year shall be
     limited so that such amount, when added to the amount of the
     matching contributions made on behalf of the Eligible Employee to
     the Basic Plan for the same Plan Year, does not exceed fifty
     percent of the sum of the before-tax savings contributions made
     on behalf of such Eligible Employee under the Basic Plan plus the
     credits  to  the  Eligible  Employee's  Requirement   Equity
     Contribution  Account under this Plan  for  the  Plan  Year,
     disregarding the portion of such sum that exceeds eight percent
     of the Eligible Employee's Eligible 401(k) Compensation for the
     Plan Year.  If either of the percentages in Section 4.2(a) of the
     Basic Plan are changed, the new percentages shall be substituted
     for  the percentages in the preceding sentence.  The maximum
     amount determined under this Section 4.2 shall be based on the
     amount of the Eligible Employee's Eligible 401(k) Compensation,
     regardless of whether the Eligible Employee elects  to  have
     amounts withheld from Eligible 401(k) Compensation pursuant to
     Section 3.1 or incentive bonus(es) pursuant to Section 3.2.
     
                                
                                
                       ARTICLE V - VESTING
                                
1.   SALARY REDUCTION CONTRIBUTIONS.  An Eligible Employee  shall
     always be 100 percent vested in amounts credited to his or her
     Retirement Equity Contribution Account.
     
2.   EMPLOYER MATCHING CONTRIBUTIONS.  An Eligible Employee  will
     always have the same vesting percentage in his or her Retirement
     Equity Matching Account as he or she has in his or her Matching
     Employer Contribution Account under the Basic Plan.
     
                                
                                
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                ARTICLE VI - PAYMENTS OF BENEFITS
                                
1.   PAYMENTS OF BENEFITS. The benefit payable under this Plan on
     account of an Eligible Employee's termination of employment,
     retirement, or death shall be paid in accordance with Section 6.2
     beginning as soon as practicable after the first day of the first
     month following the quarter in which the Eligible Employee's
     termination of employment, retirement, or death occurs. Unless
     otherwise designated in the Eligible Employee's election, any
     death benefit payable under this Plan shall be payable to the
     same beneficiary who is to be paid death benefits under the Basic
     Plan.  An Eligible Employee may change beneficiaries at any time
     without consent of a prior beneficiary, but no designation of a
     beneficiary shall be effective until actually received by the
     Company on a form designated by the Committee.
     
2.   FORM  OF  PAYMENT.   Any  benefit  payable  to  an  Eligible
     Employee or beneficiary shall be paid in a single lump sum equal
     to  the  total  balance in the Eligible Employee's  Account;
     provided,  however, that an Eligible Employee whose  balance
     exceeds  $25,000.00 and whose employment  is  terminated  by
     retirement (either after attaining the age of 65 or by reason of
     permanent  disability as defined in the Company's long  term
     disability plan as then in effect) shall receive a series of
     quarterly installments over a period of 15 years, with the amount
     of each installment being equal to the balance in the Eligible
     Employee's Accounts immediately prior to the payment divided by
     the number of installments remaining to be paid (including such
     installment).   An Eligible Employee whose  balance  exceeds
     $25,000.00 may instead elect to receive the balance in his or her
     Accounts upon retirement in a lump sum, in quarterly installments
     over five or ten years, or in such other form as the Committee
     may approve, provided that no such election, or change in a prior
     election, shall be valid unless made on a form specified by the
     Committee and received by the Committee at least one year prior
     to the date of the Eligible Employee's retirement.  All benefits
     payable to an Eligible Employee whose employment is terminated
     prior to retirement, including payments to a beneficiary after
     the Eligible Employee's death, shall be paid in a single lump
     sum.
     
3.   PRE-TERMINATION DEATH BENEFIT.  If an Eligible Employee with
     respect to whom a Policy is in force dies while employed by the
     Company, a pre-termination death benefit shall be paid to the
     Eligible Employee's beneficiary equal to the Eligible Employee's
     Eligible 401(k) Compensation for one year (determined at the base
     salary rate in effect at the time of death), which death benefit
     shall be in addition to the balance in the Eligible Employee's
     Accounts payable pursuant to Section 6.1.  Such death benefit
     shall be paid to the Eligible Employee's beneficiary under the
     Policy by the insurance company that issued the Policy, and shall
     be subject to all conditions and exceptions set forth in the
     Policy.  Notwithstanding any provision of this Plan or any other
     document to
     
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     the  contrary,  the  pre-termination death  benefit  payable
     pursuant to this Section 6.3 shall be paid only if a  Policy
     has  been issued and is in force at the time of the Eligible
     Employee's  death, and the Company shall have no  obligation
     with  respect  to the payment of the death  benefit,  or  to
     maintain  a  Policy in force for an Eligible Employee.   The
     Policy may be subject to the conditions set forth in a split
     dollar   life  insurance  agreement  between  the   Eligible
     Employee  and  the Company, on such terms as  the  Committee
     shall  determine, which may permit the Eligible Employee  to
     designate  a  beneficiary under the Policy  to  receive  the
     Eligible Employee's death benefit, who may be different from
     the beneficiary designated pursuant to Section 6.1.
     
                                
                                
                     ARTICLE VII - ACCOUNTS
                                
1.   ACCOUNTS.   The  Company  will  maintain  on  its  books   a
     Retirement Equity Contribution Account and a Matching Employer
     Contribution Account for each Eligible Employee, to which shall
     be credited, as appropriate, deferral amounts under Section 3.1
     or 3.2, matching contributions under 4.1, and earnings on such
     amounts as provided in Section 7.2.
     
2.   EARNINGS.   Earnings  shall  be credited  to  each  Eligible
     Employee's Accounts at the end of each month (or at such other
     intervals as the Committee shall determine) as computed under
     this  Section  7.2.  The Committee shall designate  selected
     investment funds or other investment media ("funds"), and each
     Eligible  Employee  shall have the right  to  have  earnings
     (including realized and unrealized gains and losses) on his or
     her Accounts computed as if it had been invested in such funds in
     such proportions as the Eligible Employee shall elect.   The
     portion of each Eligible Employee's Accounts that is deemed to be
     invested in each fund shall be a whole percentage, which shall be
     not less than 10%, and elections may be changed quarterly.  The
     Committee shall have the authority to select and discontinue
     funds at any time, to establish a rate at which interest shall be
     credited on Accounts with respect to which no fund election is in
     effect, and otherwise to establish rules and procedures with
     respect to the calculation and crediting of earnings, including
     changing the intervals at which fund elections may be made or at
     which earnings are posted, changing the minimum percentage (or
     establishing a maximum percentage) that may be deemed invested in
     any fund, and otherwise restricting deemed investment elections;
     provided, however, that earnings shall be computed in such a
     manner that they shall not be considered additional deferred
     compensation under Section 3121(v) of the Code.  The earnings on
     each Eligible Employee's Accounts shall be reduced by the cost of
     providing the death benefit described in Section 6.3, and may be
     reduced by such other
     
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     expenses  as  the Committee may determine,  which  shall  be
     allocated among Eligible Employees in a reasonable manner.
     
                                
                                
                  ARTICLE VIII - ADMINISTRATION
                                
1.   COMMITTEE.  The Company shall be the "administrator" of this
     Plan for purposes of Section 3(16)(A) of ERISA.  The Committee on
     behalf of the Company shall administer, construe and interpret
     this Plan and shall determine, subject to the provisions of this
     Plan, the Eligible Employees who shall participate in the Plan
     from  time  to time and the amount, if any, due an  Eligible
     Employee (or his or her beneficiary) under this Plan.  No member
     of  the  Committee  shall be liable  for  any  act  done  or
     determination made in good faith.  No member of the Committee who
     is a participant in this Plan may vote on matters affecting his
     or her personal benefit under this Plan, but any such member
     shall otherwise be fully entitled to act in matters arising out
     of  or  affecting  this  Plan  notwithstanding  his  or  her
     participation herein.  In carrying out its duties herein, the
     Committee shall have discretionary authority to exercise all
     powers and to make all determinations, consistent with the terms
     of  the  Plan,  in  all matters entrusted  to  it,  and  its
     determinations shall be given deference and shall be final and
     binding on all interested parties.  The Committee may adopt rules
     and procedures to be used in the administration of this Plan.
     
2.   CLAIMS.  Any Eligible Employee, or person claiming to  be  a
     beneficiary of an Eligible Employee (a "claimant"), may file a
     written claim for benefits under this Plan on a form designated
     by the Company.  Such claims shall initially be processed by the
     human resources, personnel, or other applicable department of the
     Eligible Employee's employer.  If such claim is denied in whole
     or part, the claimant shall receive a written notice of denial,
     which shall be written in language calculated to be understood by
     the claimant without legal assistance and shall set forth the
     specific reasons for the denial and explaining the procedure for
     an appeal and review of the decision by the Committee.  Such
     notice shall be furnished not later than 90 days after the claim
     has been filed (which 90 day period may be extended for up to an
     additional 90 days if special circumstances require and notice of
     the extension is furnished to the claimant prior to the end of
     the first 90 day period).
     
3.   REVIEW OF DENIALS.  A claimant whose claim is denied, or his
     authorized representative, may request a review upon written
     application to the Committee within 60 days after  receiving
     notice of the denial.  In connection with such application, the
     claimant or his authorized representative may review pertinent
     documents and may submit issues and comments in writing.  If such
     an application is made, the Committee
     
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     shall make a full and fair review of the denial of the claim
     and  shall  make  a decision not later than  60  days  after
     receipt  of  the  application, unless special  circumstances
     (such as the need to hold a hearing) require an extension of
     time,  in  which case a decision shall be made  as  soon  as
     possible  but not later than 120 days after receipt  of  the
     request  for  review, and written notice  of  the  extension
     shall  be  given to the claimant before the commencement  of
     the  extension.  The decision on review shall be in  writing
     and  shall  include specific reasons for  the  decision  and
     specific references to the pertinent provisions of the  Plan
     on which the decision is based.
     
4.   TAX  WITHHOLDING.  All payments of benefits under this  Plan
     shall be subject to applicable income, social security, and other
     tax withholding.  To the extent that Code Section 3121(v), or
     other applicable law, requires that taxes be withheld prior to
     payment of benefits, the Company shall determine the manner in
     which the required withholding is to be determined, and shall
     withhold the applicable taxes from current compensation or any
     other amounts payable to the Eligible Employee.  If such amounts
     are insufficient, the Eligible Employee shall be required to pay
     the required amount to the Company.
     
5.   NOTICES,  ETC.  Persons entitled to benefits under the  Plan
     shall file with the Committee from time to time such person's
     post office address and each change of post office address.  Each
     such  person entitled to benefits under the Plan also  shall
     furnish the Committee with all appropriate documents, evidence,
     data or information which the Committee considers necessary or
     desirable in administering the Plan.  Any document  will  be
     properly filed with the Committee if it is delivered or mailed by
     registered or certified mail postage prepaid to the Committee in
     care of the Company.  A notice mailed to an Eligible Employee or
     beneficiary at his or her last address filed with the Committee
     will be binding on the Eligible Employee or beneficiary for all
     purposes of the Plan.  Any notice under this Plan may be waived
     by the person entitled to notice.
     
6.   LITIGATION.  In any action or proceeding regarding the Plan,
     Eligible  Employees  or  former  Eligible  Employees,  their
     beneficiaries or any other persons having or claiming to have an
     interest in this Plan shall not be necessary parties and shall
     not be entitled to any notice or process.  Any final judgment
     which is not appealed or appealable and may be entered in any
     such action or proceeding shall be binding and conclusive on the
     parties hereto and all persons having or claiming to have any
     interest in this Plan.  To the extent permitted by law, if a
     legal action is begun against the Company, a member of the Board,
     the Committee or any member thereof, or any of their agents by or
     on behalf of any person and such action results adversely to such
     person or if a legal action arises because of conflicting claims
     to an Eligible Employee's or other person's benefits, the costs
     to such person of defending the action will be charged to the
     amounts, if any, which were involved in the action  or  were
     payable to the Eligible Employee or other person
     
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     concerned.   To  the  extent permitted  by  applicable  law,
     acceptance of participation in this Plan shall constitute  a
     release  of the Company, the Board, the Committee  and  each
     member thereof, and their respective agents from any and all
     liability and obligation not involving willful misconduct or
     gross neglect.
     
7.   TRUST.  The Company shall establish a trust (the "Trust") of
     the  type commonly referred to as a "rabbi trust", and shall
     transfer to it from time to time amounts that are equal to all or
     a portion of the amount credited to Eligible Employee's Accounts
     hereunder.  The Trust may also be directed to purchase some or
     all of the Policies, and to pay premiums on the Policies.  The
     Committee may direct the trustee of such Trust to make payments
     to Eligible Employees or beneficiaries of all or a portion of the
     amount to which they are entitled under the Plan, and any amount
     actually  so paid out of the Trust shall be charged  to  the
     Accounts of the Eligible Employee and reduce the amount owed
     hereunder, but the existence of the Trust shall otherwise not
     reduce or offset the liability of the Company under the Plan.
     The Committee shall have the authority to select, remove and
     replace trustees of the Trust, to direct the trustee with respect
     to  investments  and distributions, and to approve  a  trust
     agreement for the Trust and any amendments thereto.  All funds of
     the  Trust shall remain subject to the claims of the general
     creditors of the Company (including the Eligible Employees), and
     in all cases the Plan and Trust shall be so construed so that the
     Plan shall be considered "unfunded" for purposes of Section 83 of
     the Code and Sections 201(2), 301(3) and 401(a)(1) of ERISA.
     
                                
                                
              ARTICLE IX - MISCELLANEOUS PROVISIONS
                                
1.   LIMITATION  OF RIGHTS.  Nothing contained in the Plan  shall
     be construed to:
     
a)   Limit  in  any way the right of the Company to terminate  an
     Eligible Employee's employment at any time; or
     
b)   Be  evidence of any agreement or understanding,  express  or
     implied,  that the Company will employ an Eligible  Employee
     in  any  particular  position  at  any  particular  rate  of
     remuneration.
     
1.   NONALIENATION  OF  BENEFITS;  NO  WITHDRAWALS.   No  amounts
     payable  hereunder  may be assigned, pledged,  mortgaged  or
     hypothecated and, to the extent permitted by law, no such amounts
     shall be subject to legal process or attachment of the payment of
     any claims against any person entitled to receive the same but
     the Company shall have the right to offset any amount owed to it
     by the Eligible Employee.  No
     
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     amounts credited to an Eligible Employee's Accounts  may  be
     withdrawn or paid to the Eligible Employee prior to  his  or
     her termination of employment.
     
2.   AMENDMENT  OR TERMINATION OF PLAN.  Although it is  expected
     that this Plan shall continue indefinitely, the Board may amend
     this Plan from time to time in any respect, and may at any time
     terminate the Plan in its entirety; provided, however, that an
     Eligible Employee's Accounts as of the date of any such amendment
     or termination may not be reduced nor may any such amendment or
     termination adversely affect an Eligible Employee's entitlement
     to  his  or  her Accounts as of such date.  This Plan  shall
     terminate automatically if the Basic Plan terminates, in which
     event  (i)  no  additional Eligible Employees  shall  become
     participants in this Plan and (ii) benefits under this Plan shall
     be paid in such manner and at such time as the Board, in its
     discretion, determines, without regard to when benefits under the
     Basic Plan are paid.
     
3.   CONSTRUCTION OF PLAN.  This Plan is unfunded.  The
     obligations of the Company with respect to the amounts payable
     hereunder shall be paid out of the Company's general assets and
     shall not be secured by any form of trust, escrow or otherwise.
     This provision shall not require the Company to set aside any
     funds.  The Company may set aside such funds if it chooses to do
     so but such funds shall remain the property of the Company and
     subject to the claims of its creditors.  This Plan shall be so
     construed that it will be "unfunded" and maintained "primarily
     for the purpose of providing deferred compensation for a select
     group of management or highly compensated employees" as those
     terms are used in  ERISA.
4.   PAYMENT OF ADMINISTRATION EXPENSES.  All expenses incurred
     in the administration and operation of the Plan, including any
     taxes payable by the Employer in respect of the Plan shall be
     paid by the Employer.
5.   GENDER AND NUMBER.  Wherever used in this Plan, the
     masculine shall be deemed to include the feminine and the
     singular shall be deemed to include the plural, unless the
     context clearly indicates otherwise.
6.   LAW GOVERNING.  This Plan shall be construed in accordance
     with and governed by the laws of the State of Illinois to the
     extent that such laws are not preempted by federal law.


                                
                                
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