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Farmers Group, Inc. 401(k) Savings Plan Summary Description. Effective January 1,

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Effective January 1, 2009

401(k) Savings Plan

Summary Description

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Enrolling In The Plan

Participation in the Plan

Upon.your.completion.of.enrollment.and.furnishing.of.any.information.required.by.the.Plan.Administrator,.if.you. are.an.eligible.employee,.you.may.participate.in.the.Plan.as.of.your.first.date.of.employment.with.the.Company.or. any.other.affiliate.that.has.adopted.the.Plan.with.the.Company’s.consent.(the.“Adopting.Employers,”.and.together. each.of.their.subsidiaries.and.the.Company.and.each.of.its.subsidiaries,.the.“Employer”.or.“Employers”).. As.of.January.1,.2009,.Farmers.Services.LLC,.Truck.Underwriters.Association,.Fire.Underwriters.Association,. Farmers.Insurance.Exchange,.Truck.Insurance.Exchange,.Fire.Insurance.Exchange,.Farmers.New.World.Life. Insurance.Company,.Foremost.Corporation.of.America,.Kemper.Investors.Life.Insurance.Company.and.Bristol. West.Holdings,.Inc..are.Adopting.Employers...Commencing.January.1,.2010,.the.companies.listed.on.Appendix.A,. will.be.Adopting.Employers.

Eligible Employee

All.employees.of.the.Employers.are.eligible.to.participate.in.the.Plan,.with.the.exception.of.the.following.groups.of. employees:.(i).temporary.contract.employees,.(ii).employees.covered.under.a.collective.bargaining.agreement,.(iii). interns,.and.(iv).leased.employees...Persons.employed.by.the.companies.listed.on.Appendix.A.as.of.June.30,.2009. are.not.eligible.to.participate.in.the.Plan.until.January.1,.2010.

Contributions To The Plan

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Contribution Limits

The.total.annual.amount.that.may.be.contributed.to.the.Plan.on.your.behalf.–.both.by.you.and.by.your.Employer,. but.excluding.any.Catch-Up.or.Rollover.Contributions.–.is.limited.to.the.lesser.of: ...•..100%.of.your.Pay;.or ...•..$49,000.(for.2009),.indexed.on.an.annual.basis. Moreover,.the.amount.of.your.Pay.that.may.be.used.to.calculate.any.contribution.is.limited.to.$245,000.(for.2009)... These.dollar.limits.are.set.by.the.IRS.and.are.adjusted.by.the.IRS.from.time.to.time.to.reflect.changes.in.the.cost.of. living.

Qualified Military Service

You.have.certain.rights.if.you.are.absent.from.work.on.account.of.“qualified.military.service”.and.then.timely.return. to.employment. ...•...“Qualified.military.service”.is.defined.as.service.in.any.of.the.uniformed.services.of.the.United.States,.so.long. as.you.are.entitled.under.the.law.to.reemployment.rights.with.your.Employer. ...•...Upon.your.return.to.employment,.you.may.make.Pre-Tax,.Roth.401(k).and.Catch-Up.Contributions.(if. applicable).for.the.period.that.you.were.absent.from.work.on.account.of.the.qualified.military.service.. ...•...These.contributions.will.be.limited.to.the.amount.you.could.have.made.if.you.were.not.in.qualified.military. service,.but.were.instead.still.in.the.employ.of.the.Employer. ...•...You.have.a.limited.time.in.which.you.may.make.these.contributions...The.contributions.must.be.made.within. the.lesser.of.(a).3.times.the.period.of.military.service,.or.(b).5.years. ...•...If.you.choose.to.make.Pre-Tax.or.Roth.401(k).Contributions,.your.Employer.will.then.make.any.Matching. Contributions.that.you.would.have.been.eligible.to.receive.if.not.for.your.qualified.military.service... ...•...If.you.think.you.may.be.entitled.to.make.or.receive.any.contributions.under.this.provision,.please.contact. Vanguard.for.further.information.

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...•..Roth.401(k).Contribution.Account:.This.account.will.hold.any.Roth.401(k).Contributions.you.elect.to.make. ...•...Pre-Tax.Rollover.Contribution.Account:.This.account.will.hold.any.pre-tax.Rollover.Contributions.you.elect. to.make. ...•...Roth.Rollover.Contribution.Account:.This.account.will.hold.any.Roth.401(k).Rollover.Contributions.you. elect.to.make. ...•...DPSP.Regular.Account:.This.account.will.hold.amounts.held.in.your.Regular.Account.under.the.Profit. Sharing.Plan. ...•...DPSP.Accumulation.Account:.This.account.will.hold.amounts.held.in.your.Accumulation.Account.under.the. Profit.Sharing.Plan. ...•...After-Tax.Rollover.Contribution.Account:.Starting.January.1,.2010,.this.account.will.hold.any.after-tax. Rollover.Contributions.you.elect.to.make. Additional.accounts.may.be.established.under.the.Plan.from.time.to.time.if.the.Plan.Administrator.determines.such. accounts.are.necessary.

Investment Funds

You.may.direct.the.investment.of.your.Accounts.in.one.or.more.of.the.investment.funds.offered.under.the.Plan. by.contacting.Vanguard.online.at.www.vanguard.com.or.by.calling.1-800-523-1188...Please.contact.Vanguard.for. information.about.these.funds..

Selection of Investment Funds

The.Farmers.Investment.Committee.is.responsible.for.determining.the.selection.of.investment.funds...From.time.to. time,.the.Committee.may.change.the.investment.funds,.if.it.determines.that.a.change.would.be.in.the.best.interests. of.Plan.participants...

ERISA Section 404(c)

The.Plan.is.intended.to.qualify.under.Section.404(c).of.the.Employee.Retirement.Income.Security.Act.(“ERISA”). and.Title.29.C.F.R..Section.2550.404c-1..This.means.that.the.fiduciaries.of.the.Plan.may.be.relived.of.liability.for. any.losses.you.incur.that.are.the.direct.and.necessary.result.of.your.investment.instructions..In.other.words,.since. you.select.how.your.Plan.accounts.are.invested.among.the.available.options,.you.are.responsible.for.losses.which.are. the.result.of.your.investment.instructions...

Valuation Dates

The.Plan’s.assets.will.be.valued.as.of.each.day.on.which.the.New.York.Stock.Exchange.is.open.for.trading.

Gains and Losses

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Account Statements

At.least.quarterly,.the.trustee.of.the.Plan.will.give.you.a.statement.showing.the.value.of.your.Accounts...That. statement.will.also.detail.the.activity.in.your.Accounts,.such.as.the.amount.of.contributions.and.earnings.added. since.the.prior.statement..

Making Investment Elections

Initial Election

Upon.your.initial.enrollment.in.the.Plan,.you.will.designate.how.to.allocate.your.assets.among.the.available. investment.fund.choices..The.Farmers.Investment.Committee.has.selected.a.diverse.mix.of.funds.including.a.fixed. income.fund,.bond.fund,.balanced.fund.and.domestic.and.international.equity.funds..Complete.information.for. each.fund.–.including.fund.fact.sheets.and.prospectuses.–.are.available.for.your.review.by.contacting.Vanguard. online.at.www.vanguard.com.or.by.calling.1-800-523-1188..You.will.receive.a.prospectus.by.mail.at.your.home. address.for.each.fund.in.which.you.invest..

If You Do Not Indicate How To Invest Your Accounts

If.you.do.not.elect.how.you.would.like.your.deposits.to.be.invested,.your.deposits.will.be.invested.automatically. in.the.Farmers.Fund.B.Balanced.Fund...The.Plan.Administrator.may.change.this.designated.default.investment. alternative.from.time.to.time.

Changing Your Election

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or.call.Vanguard’s.automated.VOICE.network.at.1-800-523-1188..You.may.also.call.Vanguard.Participant.Services. at.1-800-523-1188.for.assistance,.but.keep.in.mind.there.is.an.extra.fee.to.apply.for.a.loan.using.the.help.of.a. Vanguard.Participant.Services.associate. NOTE:..Special.rules.may.apply.to.qualified.Heartland.Disaster.Tax.Relief.Act.of.2008.loans...Contact.Vanguard.for. further.details. If.you.are.on.a.leave.of.absence,.you.are.not.eligible.to.take.a.loan.

Repayment of Loan

Loans.generally.are.made.for.a.period.of.up.to.five.years,.except.that.a.loan.used.to.acquire.your.principal.residence. may.extend.for.up.to.15.years...Loan.payments.are.generally.made.by.after-tax.payroll.deduction,.except.when. paying.a.loan.in.full.in.advance...If.you.are.on.an.unpaid.leave.of.absence,.or.if.you.no.longer.are.employed,. payments.must.be.made.by.a.certified.check.or.money.order.delivered.to.the.trustee.of.the.Plan.

Maximum Number of Loans

You.may.not.have.more.than.two.loans.outstanding.at.any.time.

Maximum Loan Amount

The.maximum.amount.you.may.borrow.is.50%.of.your.Account.balance,.but.no.more.than.$50,000...This.amount. is.subject.to.further.restriction.if,.during.the.12.months.preceding.the.new.loan,.you.had.a.loan.outstanding.from. the.Plan.

Participant Loan Policy

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Conditions Applicable to Hardship Withdrawals

Two.conditions.must.be.satisfied.in.order.for.you.to.obtain.a.hardship.withdrawal.

...•..First,.you.must.experience.an.“immediate.and.heavy.financial.need”.(as.described.below).

...•..Second,.you.may.withdraw.no.more.than.the.amount.“necessary.to.satisfy”.that.need.(as.described.below).

Immediate and Heavy Financial Need

You.may.be.entitled.to.a.hardship.withdrawal.before.your.termination.of.employment.if.you.experience.one.of.the. following.types.of.financial.need...These.types.of.financial.need.qualify.as.“an.immediate.and.heavy.financial.need”. under.IRS.rules: ...•...Expenses.incurred.by.you,.your.spouse,.your.dependents,.or.your.designated.beneficiary.for.medical.care,.or. that.will.be.necessary.for.any.of.you.to.obtain.medical.care. ...•..Costs.directly.related.to.the.purchase.of.your.principal.residence.(not.including.mortgage.payments). ...•...Tuition.and.related.educational.fees,.including.room.and.board,.for.the.next.12.months.of.your,.your.spouse’s,. your.dependent’s,.or.your.designated.beneficiary’s.post-secondary.education. ...•...Payments.necessary.to.prevent.you.from.being.evicted.from.your.principal.residence,.or.to.prevent.a. foreclosure.on.the.mortgage.on.your.principal.residence. ...•..Burial.or.funeral.expenses.for.your.parent,.spouse,.child.or.dependent,.or.designated.beneficiary. ...•...Costs.for.repairs.to.your.principal.residence.for.damage.that.would.qualify.for.a.casualty.loss.deduction.on. your.income.tax.return.(without.regard.to.income.limitations).

Amount Necessary to Satisfy the Need

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In-Service Withdrawals

You.may.withdraw.amounts.at.any.time.from.your.Pre-Tax.or.Roth.Rollover.Contribution.Accounts.(and,. starting.January.1,.2010,.your.After-Tax.Rollover.Contribution.Account).while.still.employed.by.the.Employer... Additionally,.once.you.have.attained.age.59½,.you.may.make.a.withdrawal.from.any.of.your.Accounts...You.need. not.experience.a.financial.hardship.in.order.to.take.advantage.of.these.in-service.withdrawal.options.

Administrative Procedures

The.Plan.Administrator.has.established.procedures.for.obtaining.a.hardship.or.in-service.withdrawal...The. minimum.amount.you.may.withdraw.is.$1,000...To.initiate.the.withdrawal.process,.please.go.online.to...

www.vanguard.com.or.call.1-800-523-1188.for.Vanguard’s.automated.VOICE®.Network.or.Vanguard.Participant. Services...

Death Benefit

Death Benefit

If.you.die.before.beginning.to.receive.payment.of.your.vested.benefit,.the.Plan.will.pay.the.value.of.your.Accounts. to.your.beneficiary...This.is.referred.to.as.a.“Death.Benefit.”..Payment.of.any.Death.Benefit.will.be.made.in.a.single. lump-sum.payment.or.a.series.of.installment.payments.for.a.number.of.years.not.to.exceed.the.life.expectancy.of.the. beneficiary...

Beneficiary Designation

If.you.are.not.married,.you.may.designate.a.beneficiary.to.receive.your.Plan.benefits.in.the.event.of.your.death...If. you.are.married.at.the.time.of.your.death,.your.Death.Benefit.will.be.paid.to.your.spouse...However,.you.may.name. someone.other.than.your.spouse.as.your.beneficiary.if: ...•...Your.spouse.consents.to.that.beneficiary.designation.in.writing,.with.his.or.her.signature.witnessed.by.a.Plan. representative.or.notary.public;.or ...•..You.certify.to.the.Plan.Administrator.that.you.cannot.locate.your.spouse;.or ...•..Your.spouse.is.legally.incompetent,.in.which.case.you.must.have.the.consent.of.your.spouse’s.legal.guardian.

Changing Your Beneficiary

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No Designated Beneficiary

If.you.do.not.designate.a.beneficiary,.if.none.of.your.designated.beneficiaries.survives.you,.or.if.no.designated. beneficiary.can.be.located.after.a.reasonable.search.to.the.Plan.Administrator’s.satisfaction,.any.remaining.portion.of. your.vested.benefit.will.be.paid,.in.the.following.order,.to:. ...•..your.spouse, ...•..your.children.(including.adopted.children), ...•..your.parents.(including.adopting.parents), ...•..your.brothers.and.sisters.(including.half-brothers.and.half-sisters);.or ...•..your.estate.

You.may.designate.or.change.your.beneficiary.by.going.online.to.www.vanguard.com.or.by.calling.1-800-523-1188. for.Vanguard’s.VOICE®.Network.or.Vanguard.Participant.Services.

Benefit Payments

When Benefits are Payable

Benefits.are.payable.from.the.Plan.if: ...•..You.retire.or.otherwise.terminate.employment.with.your.Employer; ...•..You.incur.a.Permanent.Disability;.or ...•..You.die.

Disability

You.incur.a.Permanent.Disability.under.the.Plan.if.you.become.eligible.to.receive.disability.pension.benefits.under. the.Farmers’.Group,.Inc..Employees’.Pension.Plan,.or,.if.you.are.disabled.and.not.eligible.to.receive.a.disability. pension,.then.you.will.be.considered.to.have.incurred.a.Permanent.Disability.if.you.have.a.medically.certified. physical.or.mental.condition.that.totally.prevents.you.from.performing.your.normal.occupation.or.any.similar. occupation.based.on.a.medical.examination.by.a.doctor.or.clinic.appointed.by.the.Plan.Administrator.

Form of Payment

Your.vested.benefit.will.be.paid.to.you.or,.in.the.event.of.your.death,.your.beneficiary.in.a.single.lump-sum.payment. or.in.installment.payments.for.a.number.of.years.not.to.exceed.the.life.expectancy.of.the.beneficiary..

Cash-Out of Small Benefits

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greater.than.$5,000.and.you.do.not.request.a.distribution.within.90.days,.the.trustee.of.the.Plan.automatically.will. roll.over.your.account.balance.to.an.individual.retirement.account.(IRA).

IRA Provider...The.Plan.Administrator.has.selected.Vanguard.as.the.IRA.custodian.for.cash-out.distributions.that. automatically.are.rolled.over...Vanguard.will.be.the.trustee.of.any.such.IRA.and.will.be.solely.responsible.for.the. maintenance.and.administration.of.the.IRA...The.Employers.will.not.have.any.control.over.or.responsibility.for.the. IRA..You.may.contact.the.Plan.Administrator.for.more.information.about.the.Plan’s.automatic.rollover.procedures... You.may.contact.Vanguard.for.information.about.your.IRA.by.calling.Participant.Services.at.1-800-523-1188.

IRA Account and Fees...Any.such.IRA.shall.be.an.individual.retirement.account.described.in.Section.408.of.the. Code...If.a.participant’s.account.balance.under.the.Plan.automatically.is.rolled.over,.the.IRA.will.be.charged.a. standard.IRA.service.fee...You.may.contact.Vanguard.at.1-800-523-1188.to.ask.for.current.fee.information...This.fee. will.be.charged.to.the.participant.annually...These.fees.will.not.be.paid.by.the.Employer.or.the.Plan.

IRA Account Investments...Any.cash-out.distributions.from.the.Plan.that.automatically.are.rolled.over.to.an.IRA.with. Vanguard.will.be.invested.in.a.Vanguard.fund.designed.to.preserve.principal.and.provide.a.reasonable.rate.of.return.

Special Rules at Age 70½

Payment.of.your.vested.benefit.must.begin.no.later.than.April.1.of.the.calendar.year.following.the.calendar.year.in. which.you.retire.or.attain.age.70½,.whichever.occurs.later...

Special Rules Relating to the Profit Sharing Plan

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...•..Because.of.your.death.or.Permanent.Disability; ...•..If.you.terminate.after.age.55; ...•..In.compliance.with.a.qualified.domestic.relations.order.(QDRO);.or ...•..For.deductible.medical.expenses.

Direct Rollover

A.“direct.rollover”.is.a.payment.of.your.benefit,.or.a.portion.of.your.benefit,.to.an.IRA.or.another.tax-qualified.plan.. To.initiate.a.direct.rollover,.contact.Vanguard.by.going.online.to.www.vanguard.com.or.by.calling.1-800-523-1188. for.Vanguard’s.automated.VOICE®.Network.or.Vanguard.Participant.Services.

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Other Things You Should Know

Protection of Benefits

You.may.not.assign.or.transfer.any.part.of.your.Accounts,.or.any.interest.you.may.have.in.the.assets.of.the.trust. relating.to.the.Plan,.to.satisfy.a.debt...Furthermore,.in.no.event.may.your.Accounts.or.interest.in.the.assets.of.the. trust.relating.to.the.Plan.be.subject.to.assignment,.garnishment.or.other.legal.process,.except.as.may.be.permitted.by. law.as.in.the.case.of.payment.to.children.or.a.former.spouse.under.a.QDRO.

Domestic Relations Order

If.you.are.a.party.to.a.divorce,.separation,.or.other.domestic.relations.matter,.a.court.may.issue.an.order.telling.the. Plan.to.pay.all.or.a.portion.of.your.Accounts.to.your.former.spouse,.your.children,.or.some.other.person. ...•...The.Plan.will.follow.such.a.court.order.only.if.it.meets.the.requirements.of.the.Code.and.the.Plan’s.Domestic. Relations.Orders.Procedures. ...•..You.may.request.a.copy.of.the.Plan’s.Domestic.Relations.Orders.Procedures.from.the.Plan.Administrator. ...•...If.the.Plan.receives.a.domestic.relations.order.telling.it.to.pay.part.or.all.of.your.Accounts.to.some.other. person,.the.Plan.Administrator.will.send.you.a.copy.of.the.order.and.a.copy.of.the.Plan’s.Domestic.Relations. Orders.Procedures.

Top-Heavy Rules

The.Plan.contains.special.rules.that.would.apply.if.it.were.to.become.“top-heavy,”.an.event.that.is.highly.unlikely... Generally,.a.plan.is.top-heavy.if.more.than.60%.of.its.assets.benefit.certain.officers.and.owners.of.the.Employer...If.a. plan.is.top-heavy,.certain.minimum.contribution.and.special.vesting.rules.apply...However,.these.rules.do.not.apply. to.employees.who.are.members.of.a.unit.of.employees.covered.by.a.collective.bargaining.agreement.under.which. retirement.benefits.were.the.subject.of.good.faith.bargaining.

Amendment or Termination of Plan

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...•...Certain.contribution,.benefit.and.earnings.limits.set.by.the.IRS.may.reduce,.eliminate.or.otherwise.affect.your. benefit. ...•...Generally,.your.benefits.may.not.be.assigned,.sold,.transferred,.garnished.or.pledged.as.collateral...However,. your.benefit.may.be.attached.to.satisfy.a.federal.tax.levy.or.a.qualified.domestic.relations.order.(“QDRO”)... A.QDRO,.issued.by.a.state.court,.provides.that.a.part.of.your.benefit.be.paid.for.child.support,.alimony.or. marital.property.rights. ...•...There.are.IRS.limits.on.all.types.of.Plan.contributions...If.you’ve.exceeded.limits.on.your.savings.and.these. excess.savings.are.returned.to.you,.the.corresponding.Matching.Contributions.will.be.forfeited.

Your Rights Under ERISA

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court.will.decide.who.should.pay.court.costs.and.legal.fees...If.you.are.successful,.the.court.may.order.the.person. you.have.sued.to.pay.these.costs.and.fees...If.you.lose,.the.court.may.order.you.to.pay.these.costs.and.fees.–.for. example,.if.it.finds.that.your.claim.is.frivolous... If.you.have.any.questions.about.your.Plan,.you.should.contact.the.Plan.Administrator...If.you.have.any.questions. about.this.statement.or.about.your.rights.under.ERISA,.you.should.contact.the.nearest.office.of.the.Employee. Benefits.Security.Administration,.U.S..Department.of.Labor,.listed.in.your.telephone.directory,.or.the.Division.of. Technical.Assistance.and.Inquiries,.Employee.Benefits.Security.Administration,.U.S..Department.of.Labor,.200. Constitution.Avenue.N.W.,.Washington,.D.C...20210..You.may.obtain.certain.publications.about.your.rights.and. responsibilities.under.ERISA.by.calling.the.publications.hotline.of.the.Employee.Benefits.Security.Administration.

Plan Information

Name of Plan:

Farmers.Group,.Inc..401(k).Savings.Plan

Name and Address of Plan Administrator:

Farmers.Group,.Inc.

4680.Wilshire.Blvd. Los.Angeles,.CA..90010. 323-932-3200

Employer Identification Number (EIN):

95-0725935

Plan Number:

002

Agent for Service of Legal Process:

Service.of.Legal.Process.may.be.made.upon.the.Plan.Administrator.

Plan Year:

The.Plan.year.begins.January.1.and.ends.on.December.31.

Type of Plan:

The.Plan.is.a.defined.contribution.401(k).plan,.formerly.a.profit-sharing.plan.

Name and Address of Trustee:

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Name and Address of Plan Sponsor:

Farmers.Group,.Inc.

4680.Wilshire.Blvd.. Los.Angeles,.CA..90010

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References

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