Exhibit 12
 
                              THIRD AMENDMENT TO 
                       AMENDED AND RESTATED ALLIED GROUP
                       INTERCOMPANY OPERATING AGREEMENT

     THIS AMENDMENT is made this 15th day of December, 1994, by and between 
ALLIED Mutual Insurance Company ("Mutual"), ALLIED Group, Inc. ("AGI"), and 
ALLIED Life Financial Corporation ("ALFC").

     WHEREAS, Mutual, AGI, and ALFC and their respective subsidiaries entered 
into the Amended and Restated ALLIED Group Intercompany Operating Agreement on 
August 25, 1993, as amended as of November 1, 1993 and May 16, 1994 (the 
"Agreement"); and 

      WHEREAS, on December 12, 1994, the Executive and Coordinating Committees 
of the Board of Directors for each of Mutual, AGI, and ALFC approved the 
amendment to the Agreement regarding the fees for employee leasing and other 
services;

     NOW, THEREFORE, in consideration of the foregoing, and of the mutual 
covenants set forth below and other valuable consideration, the receipt of which
is hereby acknowledged, the parties agree as follows:

     1.  Section 2.1(e), second sentence, subsection (i) is hereby amended by 
     replacing "3.5%" with "4.0%".

     2.  Section 2.1(e), second sentence, subsection (iv) is hereby amended by 
     replacing "3.5%" with "4.0%".

     3.  This Amendment shall be effective January 1, 1995. All other terms and 
     conditions remain in full force and effect.

     IN WITNESS WHEREOF, the parties have caused this Amendment to be executed 
as of the day and year above first written.

ALLIED Mutual Insurance Company

By: /s/ Douglas L. Andersen
   -------------------------------
   Douglas L. Andersen, President

By: /s/ George T. Oleson
   -------------------------------
   George T. Oleson, Secretary


ALLIED Group, Inc.

By: /s/ Jamie H. Shaffer
   -------------------------------
   Jamie H. Shaffer, Office of the 
   President

By: /s/ George T. Oleson
   -------------------------------
   George T. Oleson, Secretary


ALLIED Life Financial Corporation

By: /s/ Samuel J. Wells
   -------------------------------
   Samuel J. Wells, President

By: /s/ George T. Oleson
   -------------------------------
   George T. Oleson, Secretary