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                       FIFTH AMENDMENT TO LINE OF CREDIT AGREEMENT


     This Fifth Amendment to Line of Credit Agreement (the "Amendment") is 
effective as of March 8, 1999, by and between SANWA BANK CALIFORNIA (the 
"Bank") and ZENITH NATIONAL INSURANCE CORP. (the "Borrower") with respect to 
the following:

     This Amendment shall be deemed to be a part of and subject to that 
certain Line of Credit Agreement dated as of December 15, 1994, as heretofore 
amended, and any and all addenda and riders heretofore made (collectively the 
"Agreement").  Unless otherwise defined herein, all terms used in this 
Amendment shall have the same meanings as in the Agreement.  To the extent 
that any of the terms or provisions of this Amendment conflict with those 
contained in the Agreement, the terms and provisions contained herein shall 
control.

     WHEREAS, the Borrower and the Bank mutually desire to extend and/or 
modify the Agreement.

     NOW THEREFORE, for value received and hereby acknowledged, the Borrower 
and the Bank agree as follows:

     1.  CHANGE IN INTEREST RATE.  Sections 1.02 C. 1, 2 and 3 of the 
Agreement are deleted in their entirety and the following is substituted in 
lieu thereof:

          "1.  REFERENCE RATE ADVANCES.  A variable rate equivalent to an 
     index for a variable interest rate which is quoted, published or 
     announced from time to time by the Bank as its reference rate and as to 
     which loans may be made by the Bank at, below or above such reference 
     rate (the "Reference Rate").  Interest shall be adjusted concurrently 
     with any change in the Reference Rate.  An Advance based upon the 
     Reference Rate is hereinafter referred to as a "Reference Rate Advance."
     Each such Reference Rate Advance must be in the minimum amount of 
     $100,000.00.

           2.  FED FUNDS ADVANCES.  A variable rate per annum (the "Federal 
     Funds Rate"), for each day in which the Advance is based upon the 
     Federal Funds Rate (a "Fed Funds Advance"), equivalent to 0.40% in 
     excess of the interest rate equal to the weighted average of the rates 
     on overnight,  1, 2, or 3-week Federal funds transactions with members 
     of the Federal Reserve System, quoted to the Bank on such day by Federal 
     Funds brokers of recognized standing which are selected by the Bank in 
     its sole discretion or, if such day is not a business day, for the 
     immediately preceding business day.  With respect to this section 
     1.02(C)(2), a business day means a day in which banks are open generally 
     in Chicago and New York for the conduct of substantially all of their 
     commercial lending activities.  Fed Funds Advances must be in the 
     minimum amount of $250,000.00.

           3.  EURODOLLAR ADVANCES.  A fixed rate quoted by the Bank for 30, 
     60, 90, 120, 180 or 360 days or for such other period of time that the 
     Bank may quote and offer (provided that any such period of time does not 
     extend beyond the Expiration Date) [the "Interest Period"] for Advances 
     in the minimum amount of $250,000.00.  Such interest rate shall be a 
     percentage equivalent to 0.40% in excess of the Bank's Eurodollar Rate 
     (rounded upward, if necessary, to the nearest 1/16th of one per cent 
     (0.0625%) which is that rate determined by the Bank's Treasury Desk as 
     being the approximate rate at which the Bank could 


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     purchase offshore U.S. dollar deposits in an amount approximately equal 
     to the amount of the relevant Advance and for a period of time 
     approximately equal to the relevant Interest Period (adjusted for any 
     and all assessments, surcharges and reserve requirements pertaining to 
     the purchase by the Bank of such U.S. dollar deposits) 
     [the "Eurodollar Rate"].  An Advance based upon the Eurodollar Rate is 
     hereinafter referred to as a "Eurodollar Advance" or Eurodollar Rate 
     Advance".

          4.  LIBOR ADVANCES.  A fixed rate quoted by the Bank for 1, 2, 3 or 
     6 months or for such other period of time that the Bank may quote and 
     offer (provided that any such period of time does not extend beyond the 
     Expiration Date) [the "LIBOR Interest Period"] for Advances in the 
     minimum amount of $250,000.00.  Such interest rate shall be a percentage 
     approximately equivalent to 0.40% in excess of the Bank's LIBOR Rate 
     which is that rate determined by the Bank's Treasury Desk as being the 
     arithmetic mean (rounded upwards, if necessary, to the nearest whole 
     multiple of one-sixteenth of one percent (1/16%)) of the U. S. dollar 
     London Interbank Offered Rates for such period appearing on page 3750 
     (or such other page as may replace page 3750) of the Telerate screen at 
     or about 11:00 a.m. (London time) on the second Business Day prior to 
     the first day of such period (adjusted for any and all assessments, 
     surcharges and reserve requirements) [the "LIBOR Rate"].  An Advance 
     based upon the LIBOR Rate is hereinafter referred to as a "LIBOR 
     Advance"."

     2.  SUPPLEMENTAL INTEREST PAYMENT DATE FOR LIBOR RATE ADVANCES.  An 
additional unnumbered paragraph is to be inserted as the penultimate 
paragraph of Section 1.02 C of the Agreement, as follows:

          "Interest on any LIBOR Advance with a LIBOR Interest Period of 3 
     months or less shall be paid on the last day of the LIBOR Interest 
     Period. Interest on any LIBOR Rate Advance with an Interest Period in 
     excess of three months shall be paid quarterly (i.e., on the last day of 
     each three month period occurring in such Interest Period) and on the 
     last day of the Interest Period pertaining to such LIBOR Rate Advance."

     3.  AMENDED NOTICE OF BORROWING.  A new sub-section 3 is added to 
Paragraph 1.02F of the Agreement, as follows:

          "3.  A LIBOR RATE ADVANCE.  Notice of any LIBOR Rate Advance shall 
     be received by the Bank no later than two business days prior to the day 
     (which shall be a business day) on which the Borrower requests a LIBOR 
     Rate Advance to be made."

     4.  AMENDED PARAGRAPHS 1.02 G, H, I, AND J.  Paragraphs 1.02 G, H, I, 
and J, of the Agreement are amended to insert the words "or LIBOR Rate"  
after the words "Eurodollar Rate".

     5.  CONFIRMATION OF OTHER TERMS AND CONDITIONS OF THE AGREEMENT.  Except 
as specifically provided in this Amendment, all other terms, conditions and 
covenants of the Agreement unaffected by this Amendment shall remain 
unchanged and shall continue in full force and effect and the Borrower hereby 
covenants and agrees to perform and observe all terms, covenants and 
agreements provided for in the Agreement, as hereby amended.


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     IN WITNESS WHEREOF, this Amendment has been executed by the parties 
hereto as of the date first hereinabove written.



BANK:                                BORROWER:


SANWA BANK CALIFORNIA                ZENITH NATIONAL INSURANCE CORP.


By: /s/ Dirk A. Price                 By: /s/ Stanley R. Zax
   -----------------------------         ------------------------------------
   Dirk A. Price, Vice President         Stanley R. Zax, President & Chairman 


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