EXHIBIT 10.38

                             MANAGEMENT AGREEMENT

     This Agreement is effective as of the 1st day of January, 2001, by Mercury
Indemnity 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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