**AMENDED
      AND RESTATED**


**ARTICLES
      OF INCORPORATION**


**OF**


**PICO
      HOLDINGS, INC.**








1.           The
      Articles of Incorporation of this corporation are hereby amended and restated
      to
      read as follows:








***ARTICLE
      I***





The
      name of this corporation is PICO
      Holdings, Inc.








***ARTICLE
      II***





The
      purpose of the corporation is to
      engage in any lawful act or activity for which a corporation may be organized
      under the General Corporation Law of California other than the banking business,
      the trust company business or the practice of a profession permitted to be
      incorporated by the California Corporations Code.








***ARTICLE
      III***





This
      corporation is authorized to issue
      one (1) class of shares, designated as “Common Stock.”  The number of
      shares of Common Stock authorized to be issued is one hundred million
      (100,000,000).  The par value of each share is one tenth of one cent
      (0.001). No Preferred shares shall be authorized.








***ARTICLE
      IV***





The
      corporation reserves the right to
      amend, alter, or repeal any provision contained in these Articles of
      Incorporation, in the manner now or hereafter prescribed by law, and all rights
      and powers conferred by these Articles of Incorporation on shareholders,
      directors and officers are granted subject to this reservation.





***ARTICLE
      V***


A.
      The liability of the directors of
      the corporation for monetary damages shall be eliminated to the fullest extent
      permissible under California law.





B.
      The corporation is authorized to
      provide indemnification of agents (as defined in Section 317 of the Corporations
      Code) through by-law provisions, agreements with agents, vote of shareholders,
      or otherwise, in excess of the indemnification otherwise permitted by Section
      317 of the California Corporations Code, subject only to the limits set forth
      in
      Section 204 of the Corporations Code with respect to actions for breach of
      duty
      to the corporation and its shareholders.





***ARTICLE
      VI***





A. 
      The authorized number of Directors of the Corporation shall not be less than
      five (5) nor more than nine (9) and the exact number of directors initially
      authorized shall be nine (9). The exact number of Directors may be fixed within
      the limits specified in this Article VI.A by a resolution adopted by the Board
      of Directors or by a vote of the holders of a majority of the voting power
      of
      the outstanding shares of capital stock entitled to vote. The minimum or maximum
      number of directors provided in this Article VI.A may be changed only by
      amendment to these Articles of Incorporation duly adopted by the affirmative
      vote of the holders of a majority of the voting power of outstanding shares
      of
      capital stock entitled to vote and by a resolution duly adopted by the Board
      of
      Directors. Subject to the rights of any outstanding series of Preferred Stock,
      all directors shall be elected by the holders of all outstanding shares of
      capital stock, voting together as a single class.





B.
      So
      long as the Corporation remains a “Listed Corporation” within the meaning of
      Section 301.5 of the California Corporations Code, the composition of the Board
      of Directors of the Corporation shall be determined as set forth in this
      subsection. The Directors shall be divided into three classes, as nearly equal
      in number as reasonably possible, with the term of office of the first class
      to
      expire at the annual meeting of shareholders in 1997, the term of office of
      the
      second class to expire at the third annual meeting of shareholders in 1998
      and
      the term of office of the third class to expire at the annual meeting of
      shareholders in 1999. At each annual meeting of shareholders hereafter,
      directors shall be elected for a term of office to expire at the third
      succeeding annual meeting of shareholders after their election. All directors
      shall hold office until the expiration of the term for which elected, and until
      their respective successors are elected, except in the case of the death,
      resignation, or removal of any director.