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                                                                EXHIBIT 10.9 (1)

             AMENDMENT TO SECTION 4.1 OF AMERICAN STATES FINANCIAL
             CORPORATION EMPLOYEES' SAVINGS AND PROFIT SHARING PLAN

     4.1 Amount of Employer Contributions.  Subject to the terms and conditions
of the Plan, for each Plan Year, each Employer shall contribute an amount on
behalf of each Participant that, when added to the forfeitures and amounts from
a Suspense Account treated as Employer Contributions on the Participant's
behalf for that Plan Year under Subsections 8.4 and 10.1, provides
contributions in accordance with the following schedule:

                (a) $0.25 for every $1.00 of that portion of a Participant's
         Pre-tax Contribution that does not exceed 6% of the Participant's
         Compensation shall be contributed.

                (b) If the Combined Ratio of the Company over the Performance
         Period ending with the Plan Year for which the Contribution is made is
         better than the Average Performance Percentile for the Peer Group for
         that Performance Period, an additional amount shall be contributed as
         follows:

                (i) If the Combined Ratio of the Company for the Performance
              Period ending with the Plan Year is equal to or better than the
              Superior Performance Percentile for the Peer Group, an additional
              $0.75 shall be contributed for every $1.00 of that portion of a
              Participant's Pre-tax Contribution that does not exceed 6% of the
              Participant's Compensation.

                (ii) If the Combined Ratio of the Company for the Performance
              Period ending with the Plan Year is between the Average
              Performance Percentile and the Superior Performance Percentile
              for the Peer Group, the additional contribution shall be between
              $0.00 and $0.75, as determined by straight-line interpolation,
              for every $1.00 of that portion of the Participant's Pre-tax
              Contribution that does not exceed 6% of the Participant's
              Compensation.

                (c) If the Combined Ratio of the Company over the Performance
         Period ending with the Plan Year is 100% or less, then, in addition to
         any amounts contributed for a Participant pursuant to Subsection (a)
         and (b), another $0.50 shall be contributed for every $1.00 of that
         portion of the Participant's Pre-tax Contribution that does not exceed
         6% of the Participant's Compensation.

For purposes of this Section, the Combined Ratio for an applicable Performance
Period is the sum of (1) losses and loss adjustment expenses incurred divided
by earned premiums, plus (2) underwriting expenses and policyholder dividends
divided by premiums written.  For any Performance Period, the terms Combined
Ratio, Peer Group, Average Performance Percentile, and the Superior Performance
Percentile shall be determined in accordance with the written guidelines
adopted by the Committee and set forth in an addendum to the Plan, and that
Addendum, as amended from time to time shall constitute part of this Plan.

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