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                                                                    Exhibit 14.2

                            MERCHANTS INSURANCE GROUP
                            CODE OF BUSINESS CONDUCT
                                     SUMMARY

Organizational Code of Conduct

Employees of Merchants Group, Inc. ("MGI"), Merchants Mutual Insurance Company
("MMIC"), Merchants Insurance Company of New Hampshire, Inc. ("MNH"), MFC of New
York, Inc. and MPIC, Inc. (collectively known as "Merchants Insurance Group"),
including but not limited to "Responsible Persons," as defined in the Merchants
Group, Inc. Code of Conduct and Ethics, are expected to act in accordance with
the highest standards of personal and professional integrity, honesty and
ethical conduct while transacting its business. Employees must, at all times,
comply with all applicable laws and regulations. Merchants Insurance Group will
not condone the activities of employees who achieve results through violation of
the law or unethical business dealings. This includes any payments for illegal
acts, indirect contributions, rebates and bribery. Any activity that fails to
stand the closest possible public scrutiny is prohibited.

All business conduct should be well above the minimum standards required by law.
Accordingly, employees must ensure that their actions cannot be interpreted as
being, in any way, in contradiction of the laws and regulations governing
Merchants Insurance Group's operations. If an employee is uncertain about the
application or interpretation of any legal requirements, he should refer the
matter to his supervisor, a member of senior management, the Director of Human
Resources, a member of the Audit Committee of the Board of Directors or
Merchants Insurance Group's outside legal counsel.

General Employee Conduct

Merchants Insurance Group expects its employees to conduct themselves in a
businesslike manner. Unprofessional activities are strictly prohibited in the
normal course of business (e.g., excessive consumption of alcohol, consumption
of illegal substances, possession of weapons, threatening violence,
insubordination, immoral or indecent conduct, etc.). In addition, Merchants
prohibits the possession, use, purchase, sale or transfer of controlled
substances and drug paraphernalia.

Employees must not engage in harassment (including sexual harassment), or
conduct themselves in a way that could be construed as such, for example, by
using inappropriate language, keeping or posting inappropriate materials in
their work area, or accessing inappropriate materials on their computer.

Conflicts of Interest

Merchants Insurance Group expects that employees will perform their duties
conscientiously, honestly, and in accordance with the best interests of
Merchants Insurance Group. Employees must not use their position or the
knowledge gained as a result of their position for private or personal
advantage. Regardless of the circumstances, if an employee senses that a course
of action he has pursued, is presently pursuing, or is contemplating pursuing
may involve him in a conflict of interest with his employer, he should
immediately communicate all the facts to his supervisor, a member of senior
management, the Director of Human Resources, a member of the Audit Committee of
the Board of Directors or Merchants Insurance Group's outside legal counsel.

Outside Activities, Employment and Directorships

Employees share a serious responsibility for Merchants Insurance Group's good
public relations, especially at the community level. Their readiness to help
with religious, charitable, educational, and civic activities brings credit to
Merchants Insurance Group and is encouraged.


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Employees must, however, avoid acquiring any business interest or participating
in any other activity outside Merchants Insurance Group that would, or would
appear to:

     -    Create an excessive demand upon their time and attention, thus
          depriving Merchants Insurance Group of their best efforts on the job;
          or

     -    Create a conflict of interest--an obligation, interest, or
          distraction--that may interfere with their independent exercise of
          judgment in Merchants Insurance Group's best interest.

Employees are prohibited from accepting simultaneous employment with suppliers,
customers, or competitors of Merchants Insurance Group, or from taking part in
any activity that enhances or supports a competitor's position.

Relationships With Suppliers, Customers and Competitors

Employees must avoid investing in or acquiring a financial interest for their
own accounts in any business organization that has a contractual relationship
with, provides goods or services to, or competes with Merchants Insurance Group,
if such investment or interest could influence or create the impression of
influencing their decisions in the performance of their duties on behalf of
Merchants Insurance Group.

Gifts, Entertainment and Favors

Employees must not accept directly or indirectly, entertainment, gifts, or
personal favors that could, in any way, influence, or appear to influence,
business decisions in favor of any person or organization with whom or with
which Merchants Insurance Group has, or is likely to have, business dealings.
Similarly, employees must not accept any other preferential treatment under
those circumstances because their position with Merchants Insurance Group might
be inclined to, or be perceived to, place them under obligation. Inexpensive
gifts, infrequent business meals, celebratory events and entertainment, provided
that they are not excessive or create an appearance of impropriety, do not
violate this policy.

Gifts given by Merchants Insurance Group to customers or suppliers, or received
from customers or suppliers, must be appropriate to the circumstances and must
never be of a kind that could create an appearance of impropriety. The nature
and cost of any gift given by Merchants Insurance Group must be accurately
recorded in the books and records of Merchants Insurance Group.

Kickbacks and Secret Commissions

Regarding Merchants Insurance Group's business activities, employees may not
receive payment or compensation of any kind, except as authorized under
Merchants Insurance Group's remuneration policies. In particular, Merchants
Insurance Group strictly prohibits the acceptance of kickbacks and secret
commissions from suppliers or others. Any breach of this rule may result in
immediate termination and prosecution to the fullest extent of the law.

Additionally, all employees who come into contact with government officials must
maintain the highest professional standards. Employees should never offer
anything of value to such officials to obtain a particular result for the
Company. Bribery of government officials can lead to criminal penalties.

Organization Funds and Other Assets

Employees who have access to Merchants Insurance Group funds or assets in any
form must follow the prescribed procedures for recording, handling and
protecting such items as detailed in Merchants Insurance Group's instructional
manuals or other explanatory materials, or both. Merchants Insurance Group
imposes strict standards to prevent fraud and dishonesty. Breach of these
standards may result in disciplinary action, including termination.


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When an employee's position requires spending organization funds or incurring
any reimbursable personal expenses, that individual must use good judgment on
Merchants Insurance Group's behalf to ensure that good value is received for
every expenditure, and the expenditure must be accurately and appropriately
recorded on the books of Merchants Insurance Group.

Organization funds and all other assets of Merchants Insurance Group are for
Merchants Insurance Group's purposes only and not for personal benefit. This
includes inappropriate or excessive personal use of organizational assets, such
as telephones and computers.

Employees must not exploit for their own personal gain opportunities that are
discovered through the use of the property of, information derived from, or
personal position with, Merchants Insurance Group, unless the opportunity is
disclosed fully in writing to the Boards of Directors of both MGI and MMIC, and
they respectively decline to pursue the opportunity on behalf of their company.

Records and Communications

Accurate and reliable records of many kinds are necessary to meet Merchants
Insurance Group's legal and financial obligations and to manage the affairs of
Merchants Insurance Group. Merchants Insurance Group's books and records must
reflect in an accurate and timely manner all business transactions. The
employees responsible for accounting and recordkeeping must fully disclose and
record all assets, liabilities, or both, and must exercise reasonable diligence
in enforcing these requirements.

Employees must not make or engage in any false record or communication of any
kind, whether internal or external, including but not limited to:

     -    False expense, attendance, production, financial, or similar reports
          and statements; and

     -    False advertising, deceptive marketing practices, or other misleading
          representations


Communications should be accurate, complete, objective, relevant, timely and
understandable.

Dealing With Outside People and Organizations

Employees must take care to separate their personal roles from their Merchants
Insurance Group positions when communicating on matters not involving Merchants
Insurance Group business. Employees must not use Merchants Insurance Group's
identification, stationery, supplies, and equipment for personal or political
matters.

When communicating publicly on matters that involve Merchants Insurance Group
business, employees must not presume to speak for Merchants Insurance Group on
any topic, unless they are certain that the views they express are those of
Merchants Insurance Group, and that it is Merchants Insurance Group's desire
that such views be publicly disseminated.

When dealing with anyone outside Merchants Insurance Group, including public
officials, employees must take care not to compromise the integrity or damage
the reputation of Merchants Insurance Group, or any outside individual,
business, or government body.

Prompt Communications

In all matters relevant to agents, policyholders, claimants, suppliers,
government authorities, the public and others, all employees must make every
effort to achieve complete, accurate, and timely communications


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(i.e., responding promptly and courteously to all proper requests for
information and to all complaints).

Disclosure to the SEC and the Public

It is MGI's policy that it will make full, fair, accurate, timely and
understandable disclosure in reports and documents that it files with the SEC
and in its other public communications. Accordingly, all employees must comply
with MGI's disclosure controls and procedures and its internal controls for
financial reporting.

Privacy and Confidentiality

When handling financial and personal information about policyholders or others
with whom Merchants Insurance Group has dealings, observe the following
principles:

     -    Collect, use, and retain only the personal information necessary for
          Merchants Insurance Group's business. Whenever possible, obtain any
          relevant information directly from the person concerned. Use only
          reputable and reliable sources to supplement this information.

     -    Retain information only for as long as necessary or as required by law
          and protect the physical security of this information.

     -    Limit internal access to personal information to those with a
          legitimate business reason for seeking that information. Use only
          personal information for the purposes for which it was originally
          obtained. Obtain the consent of the person concerned before externally
          disclosing any personal information, unless legal process or
          contractual obligation provides otherwise.

Trading in Securities by Employees

No employee, Officer or Director of any of the companies of Merchants Insurance
Group is permitted to trade (i.e. buy or sell) in the common stock of MGI while
in possession of material nonpublic information regarding MGI. For this purpose,
material information means any information that a reasonable investor would
consider important in a decision to buy, hold or sell the security in question.
In short, this includes any information which could be expected to affect the
price of the stock.

Procedures for Ensuring Compliance

Each year Human Resources conducts a certification process to ensure compliance
with the above procedures. All employees are asked to review and/or sign the
following documents:

     -    Conduct Guidelines

     -    Proprietary Information Non-Disclosure Agreement

     -    Electronic Asset Policy Statement

     -    Conflict of Interest Questionnaire for Employees

     -    Statement of Company Policy on Securities Trades by Company Personnel

Furthermore each Officer, Director and key finance and administrative person is
asked to review and/or sign the following documents:

     -    Conflict of Interest Questionnaire for Officers and Directors

     -    Policy on Transactions in Company Securities, Pre-Clearance and
          Blackout Period Procedures


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The results of this process are communicated to the Board of Directors of each
Company.

Reporting Violations Or Complaints

If an employee becomes aware of any evidence of non-compliance with the Code of
Business Conduct described in this summary, he should immediately advise his
supervisor or senior management so that Merchants Insurance Group can promptly
investigate. If the employee is not comfortable reporting the incident to his
supervisor or senior management, he should consult with the Director of Human
Resources at (716) 849-3399 or the Manager of Internal Audit at (716) 849-3018.
Merchants Insurance Group will handle all such information discreetly and will
make every effort to maintain, within the limits allowed by law, the
confidentiality of anyone requesting guidance or reporting questionable behavior
and/or a compliance concern.

Responsible persons who are not subject to senior management should report
violations or register complaints with a member of the Audit Committee of the
Board of Directors or Merchants Insurance Group's outside legal counsel.

Any complaints regarding internal accounting, accounting controls, auditing
matters, or disclosure controls and procedures should be reported to the
Director of Internal Audit using the Questionable Accounting or Accounting
Practices Reporting procedures documented in the Employee Handbook.

Should you have concerns that you do not feel comfortable addressing with the
Director of Internal Audit, you may report such issues as follows:

     -    Issues that affect MGI may be directed confidentially, and if desired
          anonymously, to Henry P. Semmelhack by mail at 761 Willardshire Road,
          Orchard Park, New York 14127, or such other member of the Audit
          Committee who may be designated from time-to-time by the Audit
          Committee;

     -    Issues that affect MMIC may be directed confidentially and if desired
          anonymously, to Gary M. Brost, by mail at Cyclorama Building, 369
          Franklin Street, Buffalo, New York 14202, or such other member of the
          Audit Committee who may be designated from time-to-time by the Audit
          Committee.

Part of each employee's job, and his or her ethical responsibility, is to help
enforce this Code. Employees should be alert to possible violations and report
them as described above. Employees must cooperate in any internal or external
investigations of possible violations. Reprisal, threat, retribution or
retaliation against any person who has, in good faith, reported a violation or
suspected violation of law, this Code or other policies of Merchants Insurance
Group related to legal and ethical behavior, or against any person who is
assisting in any investigation or process with respect to such a violation, is
prohibited.

Non-compliance with any aspect of this Code may be grounds for termination.

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