AMENDMENT NO. 2 TO COST ALLOCATION AGREEMENT

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 10.3

AMENDMENT NO. 2
TO
COST ALLOCATION AGREEMENT

WHEREAS, Zenith National Insurance Corp., Zenith Insurance Company, ZNAT Insurance Company, CalFarm Insurance Company, CalFarm Life Insurance Company, and CalFarm Insurance Agency have previously entered into a Cost Allocation Agreement; and

WHEREAS, Zenith National Insurance Corp. has entered into an agreement to sell 100% of the common stock of CalFarm Life Insurance Company to Anchor National Life Insurance Company ("Anchor") or an affiliate designated by it; and

WHEREAS, it is necessary to amend the Cost Allocation Agreement accordingly;

IN CONSIDERATION OF THE PREMISES, the parties agree as follows:

1.

Effective as of the close of business of the closing date of the sale of CalFarm Life Insurance Company to Anchor, CalFarm Life Insurance Company shall be deleted as a party to the inter-company Cost Allocation Agreement.

2.

In all other respects the Cost Allocation Agreement remains unchanged.

IN WITNESS WHEREOF, each of the undersigned parties has caused this Amendment No. 2 to be executed on its behalf, this 28th day of December, 1995.

ZENITH NATIONAL INSURANCE CORP.				ZENITH INSURANCE COMPANY
By:		/s/  XXXX X. XXXXXXX		By:		/s/  XXXX X. XXXXXXX
ZENITH STAR INSURANCE COMPANY				CALFARM INSURANCE COMPANY
By:		/s/  XXXX X. XXXXXXX		By:		/s/  XXXX X. XXXXXXX
CALFARM LIFE INSURANCE COMPANY				CALFARM INSURANCE AGENCY
By:		/s/  XXXX X. XXXXXXX		By:		/s/  XXXX X. XXXXXXX
ZNAT INSURANCE COMPANY
By:		/s/  XXXX X. XXXXXXX

QuickLinks

AMENDMENT NO. 2 TO COST ALLOCATION AGREEMENT