Underwriting Agreement

000,000 SHARES


AMERICAN BANKERS INSURANCE GROUP, INC.


$3.125 SERIES B CUMULATIVE CONVERTIBLE PREFERRED STOCK
(Liquidation preference $50 per share)


UNDERWRITING AGREEMENT


July 23, 1996


CS FIRST BOSTON CORPORATION DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION FURMAN SELZ LLC MCDONALD & COMPANY SECURITIES, INC. As Representatives of the Several Underwriters
c/o CS First Boston Corporation,
Park Avenue Plaza,
New York, N.Y. 10055


Dear Sirs:


1. Introductory. American Bankers Insurance Group, Inc., a Florida corporation (the "Company"), proposes to issue and sell 2,000,000 shares ("Firm Securities") of its $3.125 Series B Cumulative Convertible Preferred Stock (liquidation preference $50 per share) ("Securities") and also proposes to issue and sell to the Underwriters, at the option of the Underwriters, an aggregate of not more than 300,000 additional shares ("Optional Securities") of the Securities as set forth below. The Firm Securities and the Optional Securities are herein collectively called the "Offered Securities". This Underwriting Agreement, as amended, supplemented or modified from time to time is referred to herein as "this Agreement". The Company hereby agrees with the several Underwriters named in Schedule A hereto ("Underwriters") as follows:


2. Representations and Warranties of the Company. The Company represents and warrants to, and agrees with, the several Underwriters that:


(a) A registration statement on Form S-3 (No. 333-07209) relating to
the Offered Securities and the shares of common stock, $1.00 par value
(the "Common Stock"), of the Company into which the Securities are
convertible (the "Underlying Securities"), including a form of
prospectus, has been filed with the Securities and Exchange Commission
("Commission") and either (i)


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has been declared effective under the Securities Act of 1933, as amended ("Act"), and is not proposed to be amended or (ii) is proposed to be amended by amendment or post-effective amendment. If such registration statement ("initial registration statement") has been declared effective, either (i) an additional registration statement ("additional registration statement") relating to the Offered Securities and the Underlying Shares into which the Securities are convertible may have been filed with the Commission pursuant to Rule 462(b) ("Rule 462(b)") under the Act and, if so filed, has become effective upon filing pursuant to such Rule and the Offered Securities and such Underlying Shares all have been duly registered under the Act pursuant to the initial registration statement and, if applicable, the additional registration statement or (ii) such an additional registration statement is proposed to be filed with the Commission pursuant to Rule 462(b) and will become effective upon filing pursuant to such Rule and upon such filing the Offered Securities and such Underlying Shares will all have been duly registered under the Act pursuant to the initial registration statement and such additional registration statement. If the Company does not propose to amend the initial registration statement or if an additional registration statement has been filed and the Company does not propose to amend it, and if any post-effective amendment of either such registration statement has been filed with the Commission prior to the execution and delivery of this Agreement, the most recent amendment (if any) to each such registration statement has been declared effective by the Commission or has become effective upon filing pursuant to Rule 462(c) ("Rule 462(c)") under the Act or, in the case of the additional registration statement, Rule 462(b). For purposes of this Agreement, "Effective Time" with respect to the initial registration statement or, if filed prior to the execution and delivery of this Agreement, the additional registration statement means (i) if the Company has advised the Representatives that it does not propose to amend such registration statement, the date and time as of which such registration statement, or the most recent post-effective amendment thereto (if any) filed prior to the execution and delivery of this Agreement, was declared effective by the Commission or has become effective upon filing pursuant to Rule 462(c), or (ii) if the Company has advised the Representatives that it proposes to file an amendment or post-effective amendment to such registration statement, the date and time as of which such registration statement, as amended by such amendment or post-effective amendment, as the case may be, is declared effective by the Commission. If an additional registration statement has not been filed prior to the execution and delivery of this Agreement but the Company has advised the Representatives that it proposes to file one, "Effective Time" with respect to such additional registration statement means the date and time as of which such registration statement is filed and becomes effective pursuant to Rule 462(b). "Effective Date" with respect to the initial registration statement or the additional registration statement (if any) means the date of the Effective Time thereof. The initial registration statement, as amended at its Effective Time, including all information contained or incorporated by reference in the additional registration statement (if any) and deemed to be part of the initial registration statement as of the Effective Time of the additional registration statement pursuant to the General Instructions of the Form on which it is filed and including all information (if any) deemed to be a part of the initial registration statement as of its Effective Time pursuant to Rule 430A(b) ("Rule 430A(b)") under the Act, is hereinafter referred to as the "Initial Registration Statement". The additional registration statement, as amended at its Effective Time, including


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the contents of the initial registration statement incorporated by reference therein and including all information (if any) deemed to be part of the additional registration statement as of its Effective Time pursuant to Rule 430A(b), is hereinafter referred to as the "Additional Registration Statement". The Initial Registration Statement and the Additional Registration Statement are herein referred to collectively as the "Registration Statements" and individually as a "Registration Statement". The form of prospectus relating to the Offered Securities, as first filed with the Commission pursuant to and in accordance with Rule 424(b) ("Rule 424(b)") under the Act or (if no such filing is required) as included in a Registration Statement, including all material incorporated by reference in such prospectus, is hereinafter referred to as the "Prospectus". No document has been or will be prepared or distributed in reliance on Rule 434 under the Act.


(b) If the Effective Time of the Initial Registration Statement is prior to the execution and delivery of this Agreement: (i) on the Effective Date of the Initial Registration Statement, the Initial Registration Statement conformed in all respects to the requirements of the Act and the rules and regulations of the Commission ("Rules and Regulations") and did not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) on the Effective Date of the Additional Registration Statement (if any), each Registration Statement conformed, or will conform, in all respects to the requirements of the Act and the Rules and Regulations and did not include, or will not include, any untrue statement of a material fact and did not omit, or will not omit, to state any material fact required to be stated therein or necessary to make the statements therein not misleading and (iii) on the date of this Agreement, the Initial Registration Statement and, if the Effective Time of the Additional Registration Statement is prior to the execution and delivery of this Agreement, the Additional Registration Statement each conforms, and at the time of filing of the Prospectus pursuant to Rule 424(b) or (if no such filing is required) at the Effective Date of the Additional Registration Statement in which the Prospectus is included, each Registration Statement and the Prospectus will conform, in all respects to the requirements of the Act and the Rules and Regulations, and neither of such documents includes, or will include, any untrue statement of a material fact or omits, or will omit, to state any material fact required to be stated therein or necessary to make the


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statements therein not misleading. If the Effective Time of the Initial Registration Statement is subsequent to the execution and delivery of this Agreement: on the Effective Date of the Initial Registration Statement, the Initial Registration Statement and the Prospectus will conform in all respects to the requirements of the Act and the Rules and Regulations, none of such documents will include any untrue statement of a material fact or will omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and no Additional Registration Statement has been or will be filed. The two preceding sentences do not apply to statements in or omissions from a Registration Statement or the Prospectus based upon written information furnished to the Company by any Underwriter through the Representatives specifically for use or incorporation by reference therein, it being understood and agreed that the only such information is that described as such in Section 7(b).


(c) All financial statements, proxy statements, schedules or reports (i) required to be filed by the Company with the Commission pursuant to the Securities Exchange Act of 1934, as amended ("Exchange Act"), or (ii) incorporated by reference into the Registration Statements ("Incorporated Documents") when filed with the Commission, or when amended, as appropriate, complied with the applicable requirements of the Exchange Act, and the applicable rules and regulations thereunder ("1934 Act Rules and Regulations"), and did not include at the time of filing or as of the time of any subsequent amendment any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein, in light of the circumstances under which they were made, not misleading.


(d) The Company has been duly incorporated and is an existing corporation in good standing under the laws of the State of Florida, with power and authority (corporate and other) to own its properties and conduct its business as described in the Prospectus; and the Company is duly qualified to do business as a foreign corporation in good standing in all other jurisdictions in which its ownership or lease of property or the conduct of its business requires such qualification except where the failure to so qualify or be in good standing would not have a material adverse effect on the condition (financial or other), business, properties or results of operations of the Company and its subsidiaries taken as a whole ("Material Adverse Effect").


(e) Each subsidiary of the Company has been duly incorporated and is an existing corporation in good standing under the laws of the jurisdiction of its incorporation, with power and authority (corporate and other) to own its properties and conduct its business as described in the Prospectus; and each subsidiary of the Company is duly qualified to do business as a foreign corporation in good standing in all other jurisdictions in which its ownership or lease of property or the conduct of its business requires such qualification


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except where the failure to so qualify or be in good standing would not have a Material Adverse Effect; except as set forth on Schedule B all of the issued and outstanding capital stock of each subsidiary of the Company has been duly authorized and validly issued and is fully paid and nonassessable and is owned directly or indirectly by the Company; and the capital stock of each subsidiary owned by the Company, directly or through subsidiaries, is owned free from liens, encumbrances and defects.


(f) The Offered Securities have been duly authorized; when the Offered Securities have been delivered and paid for in accordance with this Agreement on each Closing Date (as defined below), such Offered Securities will have been validly issued, fully paid and nonassessable and will conform to the description thereof contained in the Prospectus.


(g) When the Offered Securities are delivered and paid for pursuant to this Agreement on each Closing date, such Offered Securities will be convertible into the Underlying Shares of the Company in accordance with their terms; the Underlying Shares initially issuable upon conversion of such Offered Securities have been duly authorized and reserved for issuance upon such conversion and, when issued upon such conversion, will be validly issued, fully paid and nonassessable; the outstanding shares of Common Stock have been duly authorized and validly issued, are fully paid and nonassessable and conform to the description thereof contained in the Prospectus; and no holder of any security of the Company has any preemptive rights with respect to the Offered Securities or the Underlying Shares.


(h) Other than as contemplated by this Agreement or as except as disclosed in the Prospectus, there are no contracts, agreements or understandings between the Company and any person which would give rise to a valid claim against the Company or any Underwriter for a brokerage commission, finder's fee or other like payment.


(i) There are no contracts, agreements or understandings between the Company and any person granting such person the right to require the Company to file a registration statement under the Act with respect to any securities of the Company owned or to be owned by such person or to require the Company to include such securities in the securities registered pursuant to a Registration Statement or in any securities being registered pursuant to any other registration statement filed by the Company under the Act.


(j) No consent, approval, authorization, or order of, or filing with, any governmental agency or body or any court is required for the consummation of the transactions contemplated by this Agreement in connection with the issuance and sale of the Offered Securities by the Company, except such as have been obtained and made under the Act, the Rules and Regulations, the


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Exchange Act, the 1934 Rules and Regulations, and the by-laws of the National Association of Securities Dealers, Inc. (the "NASD") and such as may be required under state or foreign securities laws.


(k) This Agreement has been duly authorized, executed and delivered by the Company and constitutes the valid and binding obligation of the Company enforceable in accordance with its terms (except as may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization or similar laws affecting creditors' rights generally, except that the remedies of specific performance and injunctive and other forms of equitable relief are subject to the discretion of the court before which any proceeding therefor may be brought and except with respect to the obligations of the Company regarding indemnification and contribution as provided in Section 7 below).


(l) The execution, delivery and performance of this Agreement, and the issuance and sale of the Offered Securities and compliance with the terms and provisions thereof (including, without limitation, the issuance of the Underlying Securities upon conversion of the Offered Securities) will not result in a breach or violation of any of the terms and provisions of, or constitute a default under, any statute, rule, regulation or order of any governmental agency or body or any court, domestic or foreign, having jurisdiction over the Company or any subsidiary of the Company or any of their properties, or of any agreement or instrument to which the Company or such subsidiary is a party or by which the Company or any such subsidiary is bound or to which any of the properties of the Company or any such subsidiary is subject, or the charter or by-laws of the Company or any such subsidiary, which breach or violation would have a Material Adverse Effect; and the Company has full power and authority to authorize, issue and sell the Offered Securities and to consummate the transactions contemplated by this Agreement (including, without limitation, the issuance of the Underlying Securities upon conversion of the Offered Securities).


(m) Except as disclosed in the Prospectus, the Company and its subsidiaries have good and marketable title to all real properties and all other properties and assets owned by them, in each case free from liens, encumbrances and defects that would materially affect the value thereof or materially interfere with the use made or to be made thereof by them; and except as disclosed in the Prospectus, the Company and its subsidiaries hold any leased real or personal property under valid and enforceable leases with no exceptions that would materially interfere with the use made or to be made thereof by them.


(n) The Company, and each of its subsidiaries, hold all licenses, certificates and permits from governmental authorities (including, without limitation, insurance licenses from the Insurance Departments of the various


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states in which the subsidiaries write insurance business (the "Insurance Licenses") which are necessary to the conduct of their businesses; the Company's subsidiaries have fulfilled and performed all obligations necessary to maintain their respective Insurance Licenses except to the extent that the failure to fulfill or perform such obligations would not have a Material Adverse Effect, and no event or events have occurred which may be reasonably expected to result in the impairment, modification, termination or revocation of such Insurance Licenses except to the extent that such event would not have a Material Adverse Effect.


(o) Except as disclosed in the Prospectus, there are no pending actions, suits or proceedings (including, without limitation, any proceeding to revoke or deny renewal of any Insurance License) against or affecting the Company and any of its subsidiaries or any of their respective properties that, if determined adversely to the Company and any of its subsidiaries, would individually or in the aggregate have a Material Adverse Effect or would materially and adversely affect the ability of the Company to perform its obligations under this Agreement (including without limitation the issuance of the Underlying Securities upon conversion of the Offered Securities), or which are otherwise material in the context of the sale of the Offered Securities and the issuance of the Underlying Securities; and no such actions, suits or proceedings (including, without limitation, any proceeding to revoke or deny renewal of any Insurance License) are threatened or, to the Company's knowledge, contemplated.


(p) The financial statements included or incorporated by reference in each Registration Statement and the Prospectus present fairly the financial position of the Company and its consolidated subsidiaries as of the dates shown and their results of operations and cash flows for the periods shown, and such financial statements have been prepared in conformity with the generally accepted accounting principles in the United States applied on a consistent basis; and the schedules included or incorporated by reference in each Registration Statement present fairly the information required to be stated therein.


(q) Except as disclosed in the Prospectus, since the date of the latest audited financial statements included or incorporated by reference in the Prospectus there has been no material adverse change, nor any development or event involving a prospective material adverse change, in the condition (financial or other), business, properties or results of operations of the Company and its subsidiaries taken as a whole, and, except as disclosed in, incorporated by reference in or contemplated by the Prospectus, there has been no dividend or distribution of any kind declared, paid or made by the Company on any class of its respective common or preferred securities or capital stock.


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(r) The Company is not, and after giving effect to the offering and
sale of the Offered Securities and the issuance of the Underlying
Securities upon conversion of the offered Securities and the
application of the proceeds thereof as described in the Prospectus,
will not be an "investment company" as defined in the Investment
Company Act of 1940.


(s) Neither the Company nor any of its respective affiliates does
business with the government of Cuba or with any person or affiliate
located in Cuba within the meaning of Section 517.075, Florida
Statutes and the Company agrees to comply with such Section if prior
to the completion of the distribution of the Offered Securities it
commences doing such business.


(t) The statutory financial statements of each of the Company's
insurance subsidiaries, from which certain ratios and other
statistical data contained or incorporated by reference in the
Registration Statement have been derived, have for each relevant
period been prepared in accordance with accounting practices
prescribed or permitted by the National Association of Insurance
Commissioners ("NAIC"), and with respect to each insurance subsidiary,
the appropriate Insurance Department of the state of domicile of such
subsidiary; and such accounting practices have been applied on a
consistent basis throughout the periods involved, except as disclosed
therein.


(u) The Offered Securities will have been approved for listing on the
Nasdaq Stock Market's National Market ("Nasdaq National Market")
subject to notice of issuance and registered under the Exchange Act
in accordance with the 1934 Rules and Regulations prior to or
concurrently with the effectiveness of the Registration Statement; the
Underlying Securities have been approved for listing on the Nasdaq
National Market prior to or concurrently with this the effectiveness
of this Registration Statement.


3. Purchase, Sale and Delivery of Offered Securities. On the basis of the representations, warranties and agreements herein contained, but subject to the terms and conditions herein set forth, the Company agrees to sell to the Underwriters, and the Underwriters agree, severally and not jointly, to purchase from the Company, at a purchase price of $48.62 per share plus accumulated dividends, if any, from July 29, 1996 to the First Closing Date (as hereinafter defined) the respective numbers of shares of Firm Securities set forth opposite the names of the Underwriters in Schedule A hereto.


The Company will deliver the Firm Securities to the Representatives for the accounts of the Underwriters, against payment of the purchase price in funds available on the same day by wire transfer to the account of the Company at a bank acceptable to CS First Boston Corporation ("CS First Boston") or by official Federal Reserve Bank check or checks drawn to the order of the Company at the office of Dewey Ballantine, at 10 A.M., New York time, on July 29, 1996 or at such other


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time not later than seven full business days thereafter as CS First Boston and the Company determine, such time being herein referred to as the "First Closing Date". For purposes of Rule 15c6-1 under the Securities Exchange Act of 1934, the First Closing Date (if later than the otherwise applicable settlement date) shall be the settlement date for payment of funds and delivery of securities for all the Offered Securities sold pursuant to the Offering. The certificates for the Firm Securities so to be delivered will be in definitive form, in such denominations and registered in such names as CS First Boston requests and will be made available for checking and packaging at the office of CS First Boston at least 24 hours prior to the First Closing Date.


In addition, upon written notice from CS First Boston given to the Company from time to time not more than 30 days subsequent to the date of the Prospectus, the Underwriters may purchase all or less than all of the Optional Securities at the purchase price per Security (including any accumulated dividends thereon to the related Option Closing Date) to be paid for the Firm Securities. The Company agrees to sell to the Underwriters the number of shares of Optional Securities specified in such notice and the Underwriters agree, severally and not jointly, to purchase such Optional Securities. Such Optional Securities shall be purchased for the account of each Underwriter in the same proportion as the number of shares of Firm Securities set forth opposite such Underwriter's name bears to the total number of shares of Firm Securities (subject to adjustment by CS First Boston to eliminate fractions) and may be purchased by the Underwriters only for the purpose of covering over-allotments made in connection with the sale of the Firm Securities. No Optional Securities shall be sold or delivered unless the Firm Securities previously have been, or simultaneously are, sold and delivered. The right to purchase the Optional Securities or any portion thereof may be exercised from time to time and to the extent not previously exercised may be surrendered and terminated at any time upon notice by CS First Boston to the Company.


Each time for the delivery of and payment for the Optional Securities, being herein referred to as an "Optional Closing Date," which may be the First Closing Date (the First Closing Date and each Optional Closing Date, if any, being sometimes referred to as a "Closing Date"), shall be determined by CS First Boston but shall be not later than five full business days after written notice of election to purchase Optional Securities is given. The Company will deliver the Optional Securities being purchased on each Optional Closing Date to the Representatives for the accounts of the several Underwriters, against payment of the purchase price therefor in funds available on the same day by wire transfer to the account of the Company at a bank acceptable to CS First Boston or by official Federal Reserve Bank check or checks drawn to the order of the Company, at the office of CS First Boston. The certificates for the Optional Securities being purchased on each Optional Closing Date will be in definitive form, in such denominations and registered in such names as CS First Boston requests upon reasonable notice prior to such Optional Closing


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Date and will be made available for checking and packaging at the office of CS First Boston at a reasonable time in advance of such Optional Closing Date.


4. Offering by Underwriters. It is understood that the several Underwriters propose to offer the Offered Securities for sale to the public as set forth in the Prospectus.


5. Certain Agreements of the Company. The Company agree with the several Underwriters that:


(a) If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this
Agreement, the Company will file the Prospectus with the
Commission pursuant to and in accordance with subparagraph (1)
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