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                                                                   EXHIBIT 10.36

                 EXPENSE REIMBURSEMENT AND SERVICES AGREEMENT

     THIS AGREEMENT is made and entered into on this 10th day of January, 2001
by and between AMERICAN MERCURY INSURANCE COMPANY, an Oklahoma corporation
(hereinafter referred to as "AMIC") and MERCURY INSURANCE SERVICES, LLC, a
California limited liability company (hereinafter referred to as "MIS").

     WHEREAS, the parties recognize that "economies of scale" make it less
expensive to consolidate certain corporate functions relating to the payment of
operating expenses and the furnishing of certain services by MIS to AMIC; and

     WHEREAS, the parties desire to enter into this Agreement to provide for the
reimbursement to MIS of expenses paid or incurred by MIS on behalf of AMIC and
the rendering of certain services by MIS to AMIC.

     NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, the parties agree as follows:

                                   ARTICLE I
                                EFFECTIVE DATE
                                --------------

     1.01  Effective Date of Agreement.  This Agreement shall be effective from
           ---------------------------
and after the 1st day of January, 2001, and shall remain in effect until
terminated as provided herein.

                                  ARTICLE II
                             EXPENSE REIMBURSEMENT
                             ---------------------

     2.01  Payment of Expenses of AMIC.  The parties agree that in the event
           ---------------------------
AMIC desires that MIS pay certain expenses of AMIC, or in the event MIS incurs
expenses in relation to and on behalf of AMIC, AMIC shall repay to MIS the
actual expenses paid or incurred by MIS therefor.  AMIC shall be entitled to
approve all expenses paid or incurred by MIS on AMIC's behalf.  The presentment
to MIS of an invoice for payment shall be deemed AMIC's approval of the payment
by MIS of such expense.

     2.02  Expenses to be Reimbursed.   AMIC's expenses which shall be paid by,
           -------------------------
and subsequently reimbursed to, MIS shall include, but not be limited to, the
following: 1) salaries for all AMIC personnel; 2) operating expenses, including,
but not limited to, rent, supplies, telephone, advertising costs, outside
accounting expenses; 3) payroll-related expenses, including employment taxes
relating to AMIC personnel; 4) expenses relating to employment benefits,
including employee bonuses, health and life insurance plans, retirement plans,
employee savings plans, and profit sharing

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plans for AMIC personnel; and 5) such other expenses incurred for the operation
of AMIC as agreed to between the parties.

     2.03  Expenses Which are the Responsibility of AMIC.   The parties agree
           ---------------------------------------------
that the following expenses shall be the sole responsibility of, and shall be
paid directly by, AMIC: 1) premium taxes; 2) losses under policies issued by
AMIC; 3) reserves for unpaid losses and loss adjustment expenses; 4) outside
audit fees; 5) assigned risk fees, bureau fees, FAIR Plan and similar
assessments; 6) agent commissions, contingency bonuses, and fees associated with
the licensing and appointment of insurance agents; 7) reinsurance premiums; 8)
investment fees; 9) assessments by state guarantee associations; 10) membership
fees in trade associations; 11) political contributions; 12) premiums paid for
insurance policies in which AMIC is the beneficiary and owner; 13) taxes of any
kind which may be levied upon AMIC by governmental authorities or through the
Tax Allocation Agreement between the members of the Mercury Insurance Group; 14)
fixed and leased assets, and associated maintenance expenses; 15) legal costs
and professional fees; and 16) such other expenses as determined by AMIC.

     2.04  Monthly Reimbursements.  AMIC shall reimburse MIS on a monthly basis
           ----------------------
for all expenses paid by MIS on AMIC's behalf during the previous month.  The
parties may mutually agree to an alternate reimbursement schedule.  MIS shall
provide a quarterly and annual report to AMIC showing all expenses reimbursed
during the prior year.

                                  ARTICLE III
                               SERVICES TO AMIC
                               ----------------

     3.01  Services to be Provided to AMIC.  MIS agrees to provide services to
           -------------------------------
AMIC as AMIC requests in relation to the following areas: 1) Human Resources,
payroll, employee benefits and personnel matters; 2) financial accounting; 3)
legal; 4) actuarial; 5) computer operations; 6) investments; 7) asset
purchasing; 8) automobile fleet operations; and 9) general management
assistance.  AMIC shall be the sole judge of what services it purchases from
MIS.  The parties may mutually agree to MIS providing additional services to
AMIC.

     3.02  Payment for Services.  AMIC agrees to pay MIS the actual cost
           --------------------
incurred by MIS in providing such services.  Such fees for services shall be
paid on a monthly basis for all services performed by MIS during the previous
month.  The parties may mutually agree to an alternate payment schedule.  MIS
shall provide a quarterly and annual report to AMIC showing all services
performed for AMIC during the prior year.

                                  ARTICLE IV
                PROVISIONS APPLICABLE TO EXPENSES AND SERVICES
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     4.01  Ownership of Records.  The ownership and legal title to the insurance
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policies,

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insurance policy records, data processing tapes, disks, programs, documentation,
account records, and any other books and records related to the reimbursement of
expenses or services provided hereunder shall remain in and with AMIC, however
MIS may have access to such records at all reasonable times.

     4.02  Right of Audit.  Either party may audit the books and records of the
           --------------
other party in relation to the expenses reimbursed or the services performed
hereunder, at the reviewing company's own expense, upon reasonable prior notice
and during normal business hours.

     4.03  Independent Contractor Status.  The relationship of MIS and AMIC
           -----------------------------
shall be that of an independent contractor rather than employer and employee and
nothing contained in this Agreement or in the rules and regulations of either
company shall be construed to create the relationship of employer and employee
or agent and principal between MIS and AMIC.

     4.04  Right of Offset.   Either party may offset amounts owed by it against
           ---------------
amounts owed to it by the other party under this or any other agreement between
the parties.

     4.05  Confidentiality.  Each party agrees to treat any proprietary and
           ---------------
nonpublic information obtained as a consequence of this Agreement regarding the
other party, its clients, products, practices and personnel as confidential and
proprietary in nature and not to be shared with any other entity without the
express written prior permission of such party.  The parties agree that a party
aggrieved by a breach of this provision shall be entitled to injunctive relief,
and any other remedies afforded by law.

                                   ARTICLE V
                                  TERMINATION
                                  -----------

     5.01  Termination of Agreement.  This Agreement, or any individual service
           ------------------------
provided herein, may be terminated by either party upon ninety (90) days prior
written notice to the other party, and any necessary notice to any applicable
state insurance department.  Upon termination, MIS shall provide a final invoice
for expenses reimbursed or services performed prior to termination.  AMIC shall
pay such invoice within sixty (60) days of receipt thereof.

                                  ARTICLE VI
                           MISCELLANEOUS PROVISIONS
                           ------------------------

     6.01  Construction of Agreement.   The parties agree that the terms of this
           -------------------------
Agreement were negotiated by the parties, and the provisions of this Agreement
shall not be construed against any party merely on the basis that such party may
have drafted the particular provision.

     6.02  Applicable Law.  This Agreement and the rights of the parties
           --------------
hereunder shall be

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governed by, construed and enforced in accordance with the laws of the State of
Oklahoma, including the laws governing the choice of law.

     6.03  Assignment.  This Agreement may not be assigned by either party
           ----------
except with the express written consent of the other party. Nothing in this
Agreement is intended to confer upon any person other than the parties hereto,
their permitted assigns and their successors, any rights or remedies under or by
reason of this Agreement.

     6.04  Binding Agreement.  This Agreement shall be binding upon and inure to
           -----------------
the benefit of the respective heirs, personal representatives, successors or
assigns of the parties hereto.

     6.05  Entire Agreement.  This Agreement contains the entire Agreement of
           ----------------
the parties hereto and no representations, inducements, promises, or Agreements,
oral or otherwise, between the parties not embodied or incorporated herein shall
be of any force of effect.  This Agreement shall supersede any agreement
previously entered into between the parties regarding the same subject matter.

     6.06  Modification.  This Agreement may only be amended by a written
           ------------
amendment or addendum executed by both parties hereto.

     6.07  Nonwaiver.  No failure of either party to exercise any power or right
           ---------
given either party hereunder or to insist upon strict compliance by either party
with its obligations hereunder, and no custom or practice of the parties at
variance with the terms hereof, shall constitute a waiver of either party's
right to demand exact compliance with the terms hereof.

     6.08  Notices.  Except as noted, all notices and consents required or
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permitted to be given under this Agreement shall be in writing and shall be
deemed to have been duly given if and when delivered personally, transmitted by
first class certified mail, return receipt requested, postage prepaid, or sent
by a nationally recognized express courier service, postage delivery charges
prepaid, as follows:

     To AMIC:                           To MIS:

     2000 Classen Blvd.                 4484 Wilshire Blvd.
     Oklahoma City, OK 73125            Los Angeles, CA 90010
     Attention: President               Attention: President

Either party may from time to time change its address for notices, by giving
notice of a new address to the other party in accordance with this Section.

     IN WITNESS WHEREOF, the parties have executed this Agreement on the day and
year first written above.

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AMERICAN MERCURY INSURANCE              MERCURY INSURANCE SERVICES,
     COMPANY                                LLC

By: /s/ Cooper Blanton, Jr.             By: /s/ George Joseph
    ---------------------------------       ----------------------------
     Cooper Blanton, Jr., President          George Joseph, President

                                       5<PAGE>

                                                                   EXHIBIT 10.37

                             MANAGEMENT AGREEMENT

     This Agreement is effective as of the 1/st/ day of January, 2001, by
Mercury Insurance Company of Georgia (hereinafter referred to as "Insurer") and
Mercury Insurance Services, LLC (hereinafter referred to as "Manager").

     In consideration of the promises, conditions, and covenants herein
contained, the parties agree as follows:

     1.   The Manager promises to manage the Insurer, and to conduct on its'
behalf any and all duties of management as shall be necessary for the complete
operation of the Insurer.

     2.   The Insurer promises and hereby delegates to the Manager all of the
duties of management which they are allowed to so delegate by the laws of the
State of Georgia, including, but not limited to, the following duties: to issue
and underwrite insurance policies, which the Insurer may be so authorized to do
by law, in accordance with the rules and regulations as delineated in the
underwriting manuals of the Insurer, settle and adjust any and all losses and
claims, defend lawsuits, establish premium rates, establish and choose sales
agents and brokers, determine agents' and brokers' commissions, prepare the
records necessary for the conduct of the insurance business, furnish all forms,
supplies and agents' manuals necessary for the conduct of the insurance
business.

     3.   The Manager promises to perform all of the operating functions on
behalf of the Insurer including, but not limited to, the following:

     A.  To acquire, license and appoint sales agents and brokers for the
     production of the insurance business of and for the Insurer, provided that
     the Insurer shall retain the right to refuse the appointment of any agent
     or broker and the right to terminate any agent or broker.

     B.  To issue and underwrite policies on behalf of the Insurer and to choose
     and obtain the necessary application and policy forms.

     C.  To furnish for the Insurer all of the operating forms, printing
     supplies, agents' manuals and any other related items which may become
     necessary for the operation of the insurance business.

     D.  To pay on behalf of the Insurer all of their operating expenses,
     including but not limited to rent, supplies, salaries of all personnel,
     telephone, advertising costs, costs of settling and adjusting all insurance
     claims, legal defense costs, court costs, costs of loss analysis,
     accounting costs (other than auditing), premium collection costs; provided,
     however, the Insurer shall pay, and be responsible for, the costs of
     management fees, premium taxes, losses, reserves for unpaid losses,
     reserves for unpaid loss adjustment expense, audit fees, assigned risk or
     similar assessments, bureau fees, Fair Plan or similar assessments,
     directors' fees, agents'

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     commissions, reinsurance premiums, investment counsel fees, assessments by
     the applicable Insurance Guarantee Association, membership fees in
     insurance trade association of insurance companies, premiums paid for
     insurance policies in which the Insurer is the beneficiary and the owner,
     such as fidelity bonds, taxes of all types and costs which may be levied on
     insurance companies by the governmental authorities having jurisdiction
     over the same and agents' bonuses (contingency commissions).

     4.   The Manager shall be reimbursed monthly for all expenses incurred on
behalf of the Insurer.

     5.   The ownership and legal title to the insurance policies, insurance
policy records, data processing tapes, disks, programs and documentation, and
account records of the Insurer, compiled on behalf of the Insurer by the
Manager, shall remain in and with the Insurer, however, the Manager shall have
joint custody with the Insurer of said records.

     6.   The Manager shall, within ninety (90) days after expiration of each
calendar year, furnish the Insurer's Board of Directors a written statement of
amounts received under or on account of this Agreement and amounts expended
under or on account of this Agreement during the calendar year, including the
emoluments received therefrom by the respective directors, officers, and other
principal management personnel of the Manager, which such classification of
items and further detail as the Insurer's Board of Directors may reasonably
require.

     7.   This Agreement shall be in effect until terminated by either party
upon ninety (90) days prior written notice to the nonterminating party.

MERCURY INSURANCE COMPANY OF                 MERCURY INSURANCE
     GEORGIA                                   SERVICES, LLC

By: /s/  Cooper Blanton                      By: /s/  George Joseph
   ------------------------------               -----------------------------
     Cooper Blanton, President                    George Joseph, President

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