FORM 10-Q
                                   
                             UNITED STATES
                  SECURITIES AND EXCHANGE COMMISSION
                         Washington, DC 20549
 
 (Mark One)
      [X]QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
                    SECURITIES EXCHANGE ACT OF 1934
          For the quarterly period ended:       March 31, 1998
                                   
                                  OR
                                   
                                   
      [ ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                    SECURITIES EXCHANGE ACT OF 1934
           For the transition period from:           to
                                
                                   
                   Commission file number:      1-11714
                                 
                                   
                         CITIZENS CORPORATION
        (Exact name of registrant as specified in its charter)
                                   
                  Delaware                  04-3178765
     (State or other jurisdiction of     (I.R.S. Employer
      incorporation or organization)    Identification Number)
                                   
                                   
           440 Lincoln Street, Worcester, Massachusetts  01653
             (Address of principal executive offices)  (Zip Code)
                                   
                           (508) 855-1000
         (Registrant's telephone number, including area code)
                                   
                                   
(Former name, former address and former fiscal year, if changed since
last report)

Indicate  by  check  mark whether the registrant  (1)  has  filed  all
reports  required to be filed by Section 13 or 15(d) of the Securities
Exchange  Act  of  1934 during the preceding 12 months  (or  for  such
shorter period that the registrant was required to file such reports),
and  (2) has been subject to such filing requirements for the past  90
days.
Yes [ X ]        No [   ]

           APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
             PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate  by check mark whether the registrant has filed all documents
and  reports  required to be filed by Section 12, 13 or 15(d)  of  the
Securities  Exchange  Act of 1934 subsequent to  the  distribution  of
securities under a plan confirmed by a court.
Yes [   ]          No [   ]

                 APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate  the number of shares outstanding of each of the registrant's
classes  of common stock as of the latest practicable date: 35,275,100
Shares of Common Stock Outstanding, as of  May 1, 1998.
                                  
                                  
                                  18
                         Total Number of Pages
                                   
                                   
                                   1
======================================================================
                                   
                           TABLE OF CONTENTS





PART I - FINANCIAL INFORMATION



   ITEM 1 - FINANCIAL STATEMENTS
           Consolidated Statements of Income                  3
           Consolidated Balance Sheets                        4
           Consolidated Statements of Shareholders' Equity    5
           Consolidated Statements of Comprehensive Income    6
           Consolidated Statements of Cash Flows              7
           Notes to Consolidated Financial Statements         8 - 9


   ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS
             OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 10 - 16


PART II - OTHER INFORMATION



   ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K                  17





SIGNATURES                                                    18


                                   2
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                    PART 1 - FINANCIAL INFORMATION
                                   
                     ITEM 1 - FINANCIAL STATEMENTS

                         CITIZENS CORPORATION
                   CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<S>                                             <C>       <C>
                                                   (Unaudited)
                                                  Quarter Ended
                                                    March 31,
(In millions, except per share data)             1998      1997
                                                -------   -------
Revenues                                                  
 Net premiums written                           $ 222.7   $ 211.9
 Change in unearned premiums, net                                
   of prepaid reinsurance premiums                  5.6       2.0
                                                -------   -------
 Net premiums earned                              217.1     209.9
 Net investment income                             25.2      23.6
 Net realized gains on investments                  4.2      19.7
 Other income                                       1.4       1.5
                                                -------   -------
    Total revenues                                247.9     254.7
                                                                 
Expenses                                                         
 Losses and loss adjustment expenses              158.2     158.5
 Policy acquisition expenses                       37.3      37.0
 Other operating expenses                          20.2      21.3
 Policyholders' dividends                           1.9       1.6
                                                -------   -------
    Total expenses                                217.6     218.4
                                                -------   -------
 Income before federal income taxes                30.3      36.3
                                                                 
Federal income tax expense                          5.9       7.9
                                                -------   -------
Net Income                                       $ 24.4    $ 28.4
                                                          
Per Share Data (Basic & Diluted)                          
                                                          
   Net income                                    $ 0.69    $ 0.80
                                                =======   =======
   Dividends declared to shareholders            $ 0.05    $ 0.05
                                                =======   =======
Weighted average shares outstanding                35.3      35.3
                                                =======   =======
                                   
    The accompanying notes are an integral part of these financial
                              statements
                                   
</TABLE>
                                   
                                   3
======================================================================

                         CITIZENS CORPORATION
                      CONSOLIDATED BALANCE SHEETS
                                   
<TABLE>
<S>                                                    <C>         <C>
                                                       (Unaudited)
(In millions, except per share data)                    March 31,  December 31,
                                                          1998        1997
Assets                                                 ----------  ----------
Investments:                                                                    
 Debt securities available-for-sale, at fair value     $  1,553.8  $  1,522.4
  (Amortized cost of $1,487.5 and $1,453.1)                              
 Equity securities available-for-sale, at fair value        201.4       182.7
  (Cost of $111.6 and $110.2)                                            
 Other investments, at fair value (Cost of $8.9 and           7.6        16.5
  $17.7)                                               ----------  ----------
   Total investments                                      1,762.8     1,721.6
 Cash and cash equivalents                                   25.5        46.5
 Accrued investment income                                   25.0        26.5
 Premiums and notes receivable                              156.5       139.4
 Reinsurance recoverable on paid and unpaid balances        476.5       474.3
 Prepaid reinsurance premiums                                66.3        70.4
 Deferred policy acquisition expenses                        54.4        54.8
 Deferred federal income taxes                                 -          3.7
 Other assets                                                68.0        68.1
                                                       ----------  ----------
   Total assets                                        $  2,635.0  $  2,605.3
                                                       ==========  ==========
Liabilities and Shareholders' Equity                                     
Liabilities:                                                             
 Reserve for losses and loss adjustment expenses       $  1,210.5  $  1,206.1
 Unearned premiums                                          379.9       378.5
 Deferred federal income taxes                               10.7          -
 Other liabilities                                          124.1       147.8
                                                       ----------  ----------
   Total liabilities                                      1,725.2     1,732.4
                                                       ==========  ==========
Shareholders' Equity                                                     
 Series A preferred stock, $0.01 par value per share;                    
   authorized 10.0 million shares; none issued or
   outstanding in 1998 and 1997                                -           -
 Common stock, par value $0.01 per share;                                
   authorized 100.0 million shares; issued 36.1                          
   million shares                                             0.4         0.4
 Additional paid-in capital                                 161.1       156.1
 Retained earnings                                          662.3       639.6
 Accumulated other comprehensive income                     100.8        91.6
 Treasury stock, at cost (0.8 million shares)               (14.8)      (14.8)
                                                       ----------  ----------
    Total shareholder's equity                              909.8       872.9
                                                       ----------  ----------
     Total liabilities and shareholders' equity        $  2,635.0  $  2,605.3
                                                       ==========  ==========
                                                                    
  The accompanying notes are an integral part of these financial statements.
                                   
</TABLE> 
                                   
                                   4
======================================================================
                                   
                         CITIZENS CORPORATION
            CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY


<TABLE>
<S>                                            <C>       <C>
                                                   (Unaudited)
                                                  Quarter Ended
(In millions)                                       March 31,
                                                 1998       1997
                                               --------   --------
Preferred Stock                                           
 Balance at beginning and end of period             -          -
                                               --------   --------
                                                                  
Common Stock                                                      
 Balance at beginning and end of period        $   0.4    $   0.4
                                               --------   --------
                                                                  
Additional Paid-in Capital                                        
 Balance at beginning of period                  156.1      156.1
 Capital contributions                             5.0         -
                                               --------   --------
 Balance at end of period                        161.1      156.1
                                               --------   --------        
Retained Earnings                                                 
 Balance at beginning of period                  639.6      552.5
 Net income                                       24.4       28.4
 Dividends declared to shareholders               (1.7)      (1.8)
                                               --------   --------
 Balance at end of period                        662.3      579.1
                                               --------   --------
                                                                  
Accumulated Other Comprehensive Income                            
 Unrealized appreciation (depreciation) on                        
  investments, net
   Balance at beginning of period                 91.6       60.5
   Appreciation (depreciation) during the               
     period                                       14.2      (40.9)
   (Provision) benefit for deferred federal             
     income taxes                                 (5.0)      14.2
                                               --------   --------
   Other comprehensive income                      9.2      (26.7)
                                               --------   --------
   Balance at end of period                      100.8       33.8
                                               --------   --------
                                                                  
Treasury Stock                                                    
 Balance at beginning and end of period          (14.8)     (15.0)
                                               --------   --------
                                                                  
                                                                  
                                                                  
Total Shareholders' Equity                     $ 909.8    $ 754.4
                                               ========   ========
                                   
   The accompanying notes are an integral part of these financial 
                              statements.
                                   
</TABLE>

                                   5
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                         CITIZENS CORPORATION
            CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

<TABLE>
<S>                                            <C>        <C>
                                                   (Unaudited)
                                                  Quarter Ended
(In millions)                                       March 31,
                                                 1998       1997
                                               --------   --------
                                                          
Net income                                     $  24.4    $  28.4
                                                                  
Other comprehensive income:                                       
 Unrealized appreciation (depreciation) on              
   investments during period                      14.2      (40.9)
 (Provision) benefit for deferred federal               
   income taxes related to items of other
   comprehensive income                           (5.0)      14.2
                                               --------   --------
Other comprehensive income                         9.2      (26.7)
                                               --------   --------
Comprehensive income                           $  33.6    $   1.7
                                               ========   ========
                                   
    The accompanying notes are an integral part of these financial
                              statements.
                                   
</TABLE>

                                   6
======================================================================
                                   
                         CITIZENS CORPORATION
                 CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<S>                                                <C>         <C>
                                                       (Unaudited)
                                                      Quarter Ended
(In millions)                                           March 31,
                                                     1998        1997
                                                   --------    --------
Cash flows from operating activities                          
Net income                                         $  24.4     $  28.4
Adjustments to reconcile net income to                                 
 net cash provided by operating activities:                            
 Net realized gains on investments                    (4.2)      (19.7)
 Deferred federal income tax (benefit)provision       (0.6)        0.1
 Change in assets and liabilities:                                     
  Deferred policy acquisition expenses                 0.4        (0.3)
  Premiums and notes receivable, net of              (12.8)       (0.5)
    reinsurance premiums
  Unearned premiums, net of prepaid                    5.5         1.9
    reinsurance premiums
  Reserve for losses and loss adjustment                               
    expenses,net of reinsurance recoverable            2.2        (5.9)
  Other, net                                           1.9        (1.6)
                                                   --------    --------
   Net cash provided by operating activities          16.8         2.4
                                                   ========    ========
                                                                       
Cash flows from investing activities                                   
 Proceeds from sale of available-for-sale debt               
   securities                                         39.2       128.6
 Proceeds from available-for-sale debt                        
   securities maturing or called                      52.6        32.8
 Proceeds from available-for-sale equity                      
   securities and other investments                   12.4        59.6
 Purchases of available-for-sale debt                    
   securities                                       (123.9)     (214.2)
 Purchases of available-for-sale equity                      
   securities and other investments                   (3.6)       (3.0)
 Change in net payable/receivable from                       
   securities transactions not settled               (10.9)        6.7
 Other investing activities                           (1.9)       (0.3)
                                                   --------    --------
   Net cash (used for) provided by                          
     investing activities                            (36.1)       10.2
                                                   --------    --------
                                                                       
Cash flows from financing activities                                   
 Dividends paid to shareholders                       (1.7)       (1.8)
                                                   --------    --------
  Net cash used for financing activities              (1.7)       (1.8)
                                                   --------    --------
                                                                       
Change in cash and cash equivalents                  (21.0)       10.8
Cash and cash equivalents at beginning of period      46.5        36.1
                                                   --------    --------
Cash and cash equivalents at end of period         $  25.5     $  46.9
                                                   ========    ========
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
                                   
    The accompanying notes are an integral part of these financial
                              statements.
                                   
</TABLE>

                                   7
======================================================================
                         CITIZENS CORPORATION
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   
1.     Basis of Presentation

The  accompanying  unaudited  consolidated  financial  statements   of
Citizens  Corporation ("the Company") have been prepared in accordance
with  generally  accepted accounting principles  applicable  to  stock
property  and  casualty  insurance  companies  for  interim  financial
information and with the requirements of Form 10-Q. Certain prior year
amounts  have  been  reclassified to conform with the  current  year's
presentation.

In  the  opinion of management, the financial statements  reflect  all
adjustments  of  a  normal  recurring  nature  necessary  for  a  fair
presentation  of  the  interim  periods.   Interim  results  are   not
necessarily indicative of results expected for the entire year.  These
financial  statements should be read in conjunction with the Company's
1997  Annual  Report to Shareholders, as filed on Form 10-K  with  the
Securities and Exchange Commission.

In  June 1997, the Financial Accounting Standards Board (FASB)  issued
Statement   of  Financial  Accounting  Standards  No.  130,  Reporting
Comprehensive Income (Statement No. 130), which establishes  standards
for  the  reporting  and  display  of  comprehensive  income  and  its
components in a full set of general-purpose financial statements.  All
items that are required to be recognized under accounting standards as
components  of comprehensive income are to be reported in a  financial
statement  that  is  displayed  with  the  same  prominence  as  other
financial  statements.  This statement stipulates  that  comprehensive
income  reflect the change in equity of an enterprise during a  period
from  transactions and other events and circumstances  from  non-owner
sources.  This statement is effective for fiscal years beginning after
December 15, 1997.  The Company has adopted Statement No. 130 for  the
first  quarter  of  1998, resulting primarily in reporting  unrealized
gains  and  losses  on  investments in debt and equity  securities  in
comprehensive income.

In  June  1997, the FASB also issued Statement of Financial Accounting
Standards  No.  131, Disclosures About Segments of an  Enterprise  and
Related   Information  (Statement  No.  131).    Statement   No.   131
establishes  standards  for  the way that  public  enterprises  report
information  about  operating segments in annual financial  statements
and  requires that selected information about those operating segments
be   reported   in  interim  financial  statements.   This   statement
supersedes  Statement  of  Financial  Accounting  Standards  No.   14,
Financial  Reporting for Segments of a Business Enterprise.  Statement
No.  131  requires  that all public enterprises report  financial  and
descriptive  information  about their reportable  operating  segments.
Operating  segments are defined as components of an  enterprise  about
which separate financial information is available that it is evaluated
regularly  by  the chief operating decision maker in deciding  how  to
allocate  resources and in assessing performance.  This  statement  is
effective  for  fiscal years beginning after December 15,  1997.   The
Company  has adopted Statement No. 131 for the first quarter of  1998,
resulting in no change in the Company's reportable segments.

In   December  1997,  the  American  Institute  of  Certified   Public
Accountants  (AICPA) issued Statement of Position 97-3, Accounting  by
Insurance and Other Enterprises for Insurance-Related Assessments (SOP
No.  97-3).  SOP 97-3 provides guidance on when a liability should  be
recognized  for  guaranty fund and other assessments  and  on  how  to
measure  the liability.  This statement allows for the discounting  of
the  liability if the amount and timing of the cash payments are fixed
and determinable.  In addition, it provides criteria for when an asset
may be recognized for a portion or all of the assessment liability  or
paid  assessment that can be recovered through premium tax offsets  or
policy  surcharges.   This  statement is effective  for  fiscal  years
beginning  after  December 15, 1998.  The Company  believes  that  the
adoption  of  this statement will not have a material  effect  on  the
results of operations or financial position.

In March 1998, the AICPA issued Statement  of Position 98-1,Accounting
for the Cost of Computer Software  Developed  or Obtained for Internal
Use (SOP No. 98-1).   SOP No.98-1 requires that certain costs incurred
in  developing  interal-use  computer  software  be  capitalized   and
provides  guidance for determining whether computer  software is to be
considered  for  internal  use.  This  statement  is effective for the
fiscal  years  beginning   after  December  15, 1998.   The Company is
currently determining the impact of adoption of SOP No. 98-1.

2. Earnings per Share

Earnings per share are based on the weighted average number of  common
shares and common share equivalents. The Board of Directors authorized
the  repurchase  of  1.8  million shares or slightly  less  than  five
percent  of its issued common stock and has purchased a total  of  0.8
million  shares since the implementation of the repurchase program  in
1995.   As  of March 31, 1998, the Company is holding these shares  as
treasury  stock  for the purpose of funding current and  future  stock
option  awards  and  for  other purposes.  In 1997,  the  FASB  issued
Statement  of  Financial Accounting Standards No.  128,  Earnings  Per
Share  (Statement  No.  128)  which supersedes  Accounting  Principles
Board  Opinion No. 15, Earnings Per Share. This standard replaces  the
primary  and fully diluted earnings per share with a basic and diluted
earnings  per  share computation, and requires a dual presentation  of
basic  and diluted earnings per share for those companies with complex
capital  structures.   All earnings per share amounts for all  periods
have  been presented to conform to the Statement No. 128 requirements.
The adoption of the aforementioned standard had no effect on Company's
previously reported earnings per share.

                                   8
======================================================================

3.  MCCA Assessment

As  a condition to the ability to conduct personal automobile business
in  the state of Michigan, the Company is required under Michigan  law
to participate in a pooling arrangement with the Michigan Catastrophic
Claims Association (MCCA).  The Company is indemnified by the MCCA for
personal  protection  insurance losses in  excess  of  $0.25  million.
Participation  is  required for all Michigan-licensed  automobile  and
motorcycle insurers. The MCCA assesses its member companies an  annual
premium on each of such member companies' policies covering automobile
and  motorcycles  written  in Michigan. The assessment  is  passed  on
directly to policyholders as a surcharge to premium. The Company cedes
a significant portion  of its private passenger automobile premiums to
the MCCA.

On  May 11, 1998, the MCCA voted to issue a refund of $180 per insured
vehicle.   The MCCA plans to issue refunds to member companies  during
June  of  1998.   It  is expected that a refund of approximately  $117
million  will be paid to Citizens Insurance Company of America  (CICA)
from  the MCCA based on CICA's 1997 insured vehicles.  The refund will
be  passed  on  directly to policyholders.  The Company believes  that
this  transaction will not have a material effect on  the  results  of
operations.  A final  MCCA  assessment will be determined and adjusted
based on insured vehicles  as  of  March 18,1998.

4.  Single Employer Transfer

On  January 1, 1998, substantially all of the employees of the Company
were  transferred to a single employer, First Allmerica Financial Life
Insurance  Company  (FAFLIC), which is a subsidiary  of  the  ultimate
parent,   Allmerica  Financial  Corporation  (AFC).   On  this   date,
substantially   all  of  the  aforementioned  defined benefit, defined
contribution  401(k)  and  postretirement plans  were merged  with the
existing benefit plans  of  FAFLIC.  The transfer of benefit plans did
not impact the results of operations.  Assets  equal to the fair value
of the liabilities, net of taxes,  were  transferred  to  FAFLIC.  The
excess of the carrying value of  the liabilities, net  of  taxes,  was
assumed  by  the  parent  company, resulting in a capital contribution
of $5.0 million.

                                   9
======================================================================
                    PART I - FINANCIAL INFORMATION
                                   
                                ITEM 2
                                   
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                  CONDITION AND RESULTS OF OPERATIONS

The  results  of operations for Citizens Corporation and  subsidiaries
(the Company) include the accounts of Citizens Corporation (Citizens),
a  non-insurance  holding company, and its wholly-owned  subsidiaries,
Citizens  Insurance Company of America, Citizens Insurance Company  of
Ohio,  and  Citizens  Insurance Company of the  Midwest  (collectively
Citizens  Operations), and Citizens Management Inc., which is  wholly-
owned by Citizens Insurance Company of America.

Results of Operations
---------------------
Net income

Net income for the quarter ended March 31, 1998, was $24.4 million, or
$0.69  per share, compared to $28.4 million, or $0.80 per  share,  for
the  quarter  ended March 31, 1997.  The decrease  in  net  income  is
primarily  attributable to a decrease in net realized  gains,  net  of
taxes,  of  $9.6  million, partially offset  by  an  increase  in  the
underwriting profit of $8.3 million and an increase in net  investment
income  of $1.6 million.  Excluding realized gains and losses, net  of
taxes,  net  income increased $5.6 million, to $21.2 million  for  the
quarter  ended  March  31,  1998,  versus  $15.6  million  during  the
comparable period of 1997.  The improvement in underwriting results is
primarily  due  to  an increase in net premiums earned  in  all  lines
except  workers' compensation, more favorable claims activity  in  the
homeowners   and  personal  automobile  lines,  and  a  reduction   in
catastrophe losses of $6.3 million, partially offset by adverse claims
activity  in  the  commercial lines.  Net investment income  increased
$1.6  million,  primarily reflecting the growth  in  invested  assets.
Federal  income tax expense decreased $2.0 million, to  $5.9  million,
while the overall effective tax rate decreased to 19.5% in the quarter
ended March 31, 1998 from 21.8% for the same period in 1997.

Revenues

Net premiums earned increased $7.2 million, or 3.4%, to $217.1 million
for  the quarter  ended March 31, 1998,  resulting from a $4.2 million
increase in  the Company's personal  lines and a $3.0 million increase
in the Company's commercial lines.  Contributing to premium growth for
1998 is an increase in net premiums earned of $5.4 million in Ohio and
Indiana  resulting from  expansion in these  states, rate increases in
the  personal  automobile  and  homeowners  lines, and an  increase in
policies  in  force  in  the commercial  multiple peril  line.   These
factors  were  partially  offset  by rate reductions  in the  workers'
compensation  line, where competitive conditions continue in Michigan,
and   a   decrease   attributable  to   Michigan  Catastrophic  Claims
Association (MCCA) surcharges.

                                  10
======================================================================

Segment Results
---------------
Personal segment

Personal  segment premiums represented 68.1% and 68.5%  of  total  net
premiums earned for the quarters ended March 31, 1998 and 1997.

<TABLE>
<S>                                           <C>         <C>
                                               --------    --------
For the Quarters Ended                           1998        1997
March 31 (in millions)                         --------    --------
                                                               
Net premiums earned                            $ 147.9     $ 143.7
                                                           
Losses and loss adjustment expenses               99.1       113.8
                                                           
Policy acquisition and other underwriting                 
expenses                                          38.6        39.5
                                               --------    --------
                                                                   
Underwriting profit (loss)                     $  10.2     $  (9.6)
                                               ========    ========
</TABLE>

Personal segment net premiums earned increased $4.2 million, or  2.9%,
to  $147.9  million for the quarter ended March 31, 1998, from  $143.7
million  for  the  quarter  ended March  31,  1997.   This  growth  is
attributable  to  rate  increases  in  the  personal  automobile   and
homeowners  lines  and a 2.6% increase in policies  in  force  in  the
homeowners  line.   This increase is partially offset  by  a  decrease
attributable  to changes in the MCCA surcharges effective  January  1,
1997  and  January  1,  1998, respectively, for   personal  automobile
policies  written.   While  management has  taken  steps  to  increase
penetration  in  affinity  groups and has  initiated  other  marketing
programs, the Company believes that heightened competition may  result
in reduced premium growth in the personal segment.

The  personal  segment  underwriting gain was $10.2  million  for  the
quarter ended March 31, 1998 compared to an underwriting loss of  $9.6
million  for  the quarter ended  March 31, 1997.  The  improvement  in
underwriting  results  is  primarily  due  to  more  favorable  claims
activity  in  the  homeowners  and personal  automobile  lines  and  a
reduction  in  catastrophe losses of $5.9 million,  primarily  in  the
homeowners  line.  Policy acquisition and other underwriting  expenses
decreased   $0.9  million,  or  2.3%,  to  $38.6  million,   primarily
reflecting reductions in employee related expenses.

Commercial segment

Commercial segment premiums represented 31.9% and 31.5% of  total  net
premiums  earned  for  the quarters ended March  31,  1998  and  1997,
respectively.

<TABLE>
<S>                                             <C>         <C>
                                                --------    --------  
For the Quarters Ended                            1998        1997    
March 31 (in millions)                          --------    --------  
                                                                      
Net premiums earned                             $  69.2     $   66.2  
                                                                      
Losses and loss adjustment expenses                59.1         44.7  
                                                                      
Policy acquisition and other underwriting                     
expenses                                           17.5         17.7
                                                                      
Policyholders' dividends                            1.9          1.6  
                                                --------    --------  
                                                                      
Underwriting (loss) profit                      $  (9.3)    $    2.2  
                                                ========    ========  
</TABLE>                                                                      

                                  11
======================================================================
Commercial  segment  net premiums earned increased  $3.0  million,  or
4.5%,  to  $69.2 million for the quarter ended March 31, 1998 compared
to  $66.2  million for the quarter ended March 31, 1997. This increase
is  primarily attributable to growth in the commercial multiple  peril
and  commercial  automobile lines, partially offset  by  decreases  in
rates  in  the  workers' compensation line, resulting  from  continued
competitive  conditions  in  Michigan.   Policies  in  force  in   the
commercial  multiple peril and commercial automobile  lines  increased
20.4% and 5.0%, respectively.  Rates in the workers' compensation line
were  decreased 8.7% and 1.9% effective March 1, 1997 and  January  1,
1998, respectively. Management believes that competitive conditions in
Michigan  in  the  workers' compensation line may continue  to  impact
future growth in net premiums earned.

The commercial segment underwriting loss was $9.3 million compared  to
a  $2.2 million profit for the quarters ended March 31, 1998 and 1997,
respectively.   The  decline  in  underwriting  profit  is   primarily
attributable  to  increased  current year  claims  activity  and  less
favorable  development  of  prior  year  reserves  in  the  commercial
automobile  and  workers' compensation lines.  Policy acquisition  and
other  underwriting expenses decreased $0.2 million, or 1.1%, to $17.5
million, primarily reflecting reductions in employee related expenses.


Reserve for Losses and Loss Adjustment Expenses
-----------------------------------------------
The Company regularly updates its reserve estimates as new information
becomes  available  and  further events occur  which  may  impact  the
resolution  of  unsettled claims.  Changes in prior reserve  estimates
are  reflected in results of operations in the year such  changes  are
determined  to  be  needed and recorded. The table  below  provides  a
reconciliation of the beginning and ending reserve for  unpaid  losses
and LAE as follows:

<TABLE>
<S>                                             <C>        <C>
                                                                 
For the period ended March 31, (in millions)       1998        1997
                                                --------------------
                                                             
Reserve for losses and LAE, beginning of        
  period                                        $1,206.1   $1,238.5
                                                                     
Reserve for losses and LAE, net of                                   
  reinsurance recoverable:
                                                             
     Provision for insured events of the           
     current period                                173.3      179.0
                                                                     
     Decrease in provision for insured             
     events of prior years                         (15.1)     (20.5)
                                                                     
                                                --------    --------
                                                             
Total incurred losses and LAE                      158.2      158.5
                                                                     
                                                                     
                                                                     
Payments, net of reinsurance recoverable:                            
                                                                     
      Losses and LAE attributable to insured        
      events of current period                      50.0       57.9
                                                                     
      Losses and LAE attributable to insured       
      events of prior years                        107.9      104.7
                                                                     
                                                --------    --------
                                                                     
Total payments                                     157.9      162.6
                                                                    
                                                                     
                                                                     
Change in reinsurance recoverable on unpaid                 
losses                                               4.1      (10.3)
                                                                     
                                                --------    --------
                                                                     
                                                                     
                                                             
Reserve for losses and LAE, end of period       $1,210.5   $1,224.1
                                                ========    ========
</TABLE>

As part of an ongoing process, the reserves have been re-estimated for
all prior accident years and were decreased by $15.1 million and $20.5
million, for the quarters ended March 31, 1998 and 1997, respectively.
The decline in favorable development is primarily  due  to unfavorable
development in the commercial automobile line for  the  quarter  ended
March  31, 1998.  The  overall  favorable  reserve development in both
years primarily reflects  a modest shift  over  the  past few years of
the workers' compensation business  to  Western and Northern Michigan,
which have demonstrated more favorable  loss experience  than  Eastern
Michigan, and the initiatives taken by  the Company to manage  medical
costs  primarily in the personal automobile  and workers' compensation
lines.

                                  12
======================================================================




This favorable development reflects the Company's reserving philosophy
consistently  applied over these periods. Conditions and  trends  that
have  affected development of the losses and LAE reserves in the  past
may not necessarily occur in the future.

Inflation  generally increases the cost of losses covered by insurance
contracts.  The effect of inflation on the Company varies by  product.
Property  and casualty insurance premiums are established  before  the
amount of losses and LAE, and the extent to which inflation may affect
such  expenses,  are  known. Consequently, the  Company  attempts,  in
establishing rates, to anticipate the potential impact of inflation in
the  projection  of ultimate costs. The impact of inflation  has  been
relatively  insignificant  in recent years. However,  inflation  could
contribute to increased losses and LAE in the future.

The  Company  regularly reviews its reserving techniques, its  overall
reserving  position  and  its reinsurance.  Based  on  (i)  review  of
historical  data,  legislative enactments, judicial  decisions,  legal
developments in impositions of damages, changes in political attitudes
and  trends in general economic conditions, (ii) review of  per  claim
information, (iii) historical loss experience of the Company  and  the
industry,  (iv) the relatively short-term nature of most policies  and
(v)  internal estimates of required reserves, management believes that
adequate   provision  has  been  made  for  loss  reserves.   However,
establishment  of  appropriate reserves  is  an  inherently  uncertain
process  and  there  can  be  no certainty  that  current  established
reserves will prove adequate in light of subsequent actual experience.
The  Company  believes  that a significant  change  to  the  estimated
reserves could have a material impact on the results of operations.


Reinsurance
-----------
The  Company  maintains  a  reinsurance program  designed  to  protect
against  large  or  unusual losses and allocated  LAE  activity.  This
includes   pro-rata,  excess  of  loss  reinsurance  and   catastrophe
reinsurance.  Catastrophe reinsurance serves  to  protect  the  ceding
insurer from significant aggregate losses arising from a single  event
such   as   windstorm,  hail,  hurricane,  tornado,  riot   or   other
extraordinary events. The Company determines the appropriate amount of
reinsurance  based on the Company's evaluation of the  risks  accepted
and  analyses  prepared by consultants and reinsurers  and  on  market
conditions including the availability and pricing of reinsurance.  The
Company has reinsurance for casualty business.

Effective  January  1,  1998,  the Company  modified  its  catastrophe
reinsurance program to include a higher retention. Under the Company's
1998  catastrophe reinsurance program, the Company retains  the  first
$45.0 million.  For losses in excess of $45.0 million and up to $180.0
million,  the Company retains 10% of the loss.  Amounts in  excess  of
$180.0  million are retained 100% by the Company.  Under the Company's
1997  catastrophe  reinsurance program, the  Company  retained  5%  of
losses in excess of $10.0 million, up to $25.0 million. For losses  in
excess of $25.0 million and up to $180.0 million, the Company retained
10%  of  the  loss. Amounts in excess of $180.0 million were  retained
100% by the Company.

Under  the Company's casualty reinsurance program, the reinsurers  are
responsible  for  100% of the amount of each loss in  excess  of  $0.5
million  per occurrence up to $30.5 million for general liability  and
workers'  compensation. Additionally, this reinsurance covers workers'
compensation  losses in excess of $30.5 million to $60.5  million  per
occurrence.  Amounts in excess of $60.5 million are retained  100%  by
the Company.

The  Company cedes to reinsurers a portion of its risk and pays a  fee
based  upon  premiums  received  on  all  policies  subject  to   such
reinsurance. Reinsurance contracts do not relieve the Company from its
obligations  to  policyholders. Failure of reinsurers to  honor  their
obligations  could result in losses to the Company.  The Company  also
believes  that  the terms of its reinsurance contracts are  consistent
with  industry  practice  in  that they contain  standard  terms  with
respect to lines of business covered, limit and retention, arbitration
and  occurrence.  Based  on  its review of its  reinsurers'  financial
statements and reputations in the reinsurance marketplace, the Company
believes that its reinsurers are financially sound.


Investment Results
------------------
Net investment income before taxes was $25.2 million and $23.6 million
for  the  quarters  ended March 31, 1998 and 1997, respectively.   The
increase  is  primarily the result of an increase in average  invested
assets.   The average pre-tax yields on debt securities were  6.6%  in
1998  and  6.8% in 1997. Net investment income after taxes  was  $21.0
million  and $19.8 million for the quarters ended March 31,  1998  and
1997,  respectively.  Net realized gains on investments  before  taxes
were  $4.2 million and $19.7 million during the first quarter of  1998
and  1997,  respectively.  Net realized gains primarily resulted  from
sales of appreciated fixed maturities in 1998 due to normal trading of
securities to manage cash flows, and appreciated equity securities  in
1997  due  to the Company's strategy of shifting to a higher level  of
debt securities.

                                   13
======================================================================

Investment Portfolio
--------------------
The  Company's  investment  portfolio  increased  $41.2  million,   to
$1,762.8 million during the quarter, from $1,721.6 million at December
31,  1997.   Debt  securities increased $31.4   million,  to  $1,553.8
million, from $1,522.4 million, and represented 88.1% and 88.4% of the
carrying  value of all investments at March 31, 1998 and December  31,
1997,  respectively.    Tax-exempt securities  represented   67.6%  of
total  debt securities at March 31, 1998 compared to 66.1% at December
31,  1997.   The  Company  may  make modest  extensions  in  portfolio
incremental credit risk and adjustments to its taxable and  tax-exempt
positions in the future to seek to maximize after tax income.

The  unrealized appreciation in the investment portfolio at March  31,
1998  was  $154.8 million compared to $140.6 million at  December  31,
1997.  Unrealized depreciation during the first three  months  of  the
year was $3.0 million for bonds, and unrealized appreciation on equity
securities and other investments was $17.2 million.


Liquidity and Capital Resources
-------------------------------
Liquidity  describes  the ability of a company to generate  sufficient
cash flows to meet the cash requirements of business operations.  As a
holding  company,  Citizens' primary source of  cash  for  payment  of
dividends   to  its  shareholders  is  dividends  from  its  insurance
subsidiaries,  which  are  subject to  limitations  imposed  by  state
regulators.  Such limitations require that dividends be paid only  out
of  statutory  earned surplus (unassigned funds) and a restriction  on
the payment of "extraordinary" dividends without prior approval of the
state authorities.

Underwriting  and  investing, typically  the  two  distinct,  but  not
separate operations in an insurance company, are the sources  of  cash
for  Citizens  Insurance.  The primary sources of  cash  are  premiums
collected,  investment income and maturing investments.  Primary  cash
outflows  are paid losses and LAE, policy acquisition expenses,  other
underwriting  expenses, and purchases of investments.   Cash  outflows
related   to  claim  losses  and  LAE  can  be  variable  because   of
uncertainties surrounding settlement dates for unpaid losses  and  the
potential  for  large losses either individually or in the  aggregate.
Accordingly, the Company's strategy is to monitor available  cash  and
short-term investment balances in relation to projected cash needs  by
matching  the  maturities of its investments to expected  payments  of
current and long-term liabilities.

Net cash provided by operating activities, for the quarter ended March
31, 1998, was $16.8 million compared to $2.4 million in the prior year
period.    This  increase  is  primarily  attributable   to   improved
underwriting  results  and  an  increase  in  net  investment   income
received.

Net  cash (used for) provided by investing activities for the  Company
was  $(36.1) million and $10.2 million for the first quarter  of  1998
and  1997,  respectively.  The increase in net cash used for investing
activities  results  from  increased net cash  provided  by  operating
activities,  which  is typically invested in fixed income  securities,
and the timing of investments in long-term securities.

Net  cash  used  for  financing activities for the  Company  was  $1.7
million  and  $1.8  million for the first quarter of  1998  and  1997,
respectively, representing dividends paid to shareholders.

Shareholders' equity was $909.8 million, or $25.92 per share at  March
31,  1998,  compared to $872.9, or $24.75 per share  at  December  31,
1997, resulting from additional unrealized appreciation on investments
and  net  income.   Changes in shareholders'  equity  related  to  the
unrealized values of underlying portfolio investments will continue to
be volatile as market prices of debt securities fluctuate with changes
in the interest rate environment.

The  Company  expects to continue to pay dividends in the  foreseeable
future.  However, payment of future dividends is subject to the  Board
of  Directors'  approval and is dependent, among  other  things,  upon
earnings and the financial condition of the Company.

                                  14
======================================================================

Based  on  current trends, the Company expects to continue to generate
sufficient  positive operating cash to meet all short-term  and  long-
term  cash  requirements.  The Company  maintains  a  high  degree  of
liquidity   within   the  investment  portfolio  in   fixed   maturity
investments, common stock and short-term investments.

Impact of the Year 2000 Issue

The  Year 2000 Issue is the result of computer programs being  written
using two digits rather than four to define the applicable year.   Any
of  the  Company's computer programs that have date-sensitive software
may  recognize a date using "00" as the year 1900 rather than the year
2000.   This  could  result  in  a system failure  or  miscalculations
causing  disruptions of operations, including, among other  things,  a
temporary inability to process transactions, send invoices, or  engage
in similar normal business activities.

Based  on a recent assessment, the Company determined that it will  be
required to modify or replace significant portions of its software  so
that  its computer systems will properly utilize dates beyond December
31,  1999.  The Company presently believes that with modifications  to
existing software and conversions to new software, the Year 2000 Issue
can  be resolved.  However, if such modifications and conversions  are
not  made, or are not completed timely, the Year 2000 Issue could have
a material impact on the operations of the Company.

The  Company  has  initiated formal communications  with  all  of  its
significant suppliers and large customers to determine the  extent  to
which  the  Company is vulnerable to those third parties'  failure  to
remediate  their own Year 2000 Issue.  The Company's total  Year  2000
project  cost  and  estimates  to complete  the  project  include  the
estimated costs and time associated with the impact of a third party's
Year  2000  Issue,  and are based on presently available  information.
However, there can be no guarantee that the systems of other companies
on  which the Company's systems rely will be timely converted, or that
a  failure  to  convert by another company, or a  conversion  that  is
incompatible  with  the  Company's systems, would  not  have  material
adverse  effect on the Company.  The Company does not believe that  it
has  material exposure to contingencies related to the Year 2000 Issue
for  the  products it has sold.  Although the Company does not believe
that  there  is a material contingency associated with the  Year  2000
project,  there  can  be  no  assurance  that  exposure  for  material
contingencies will not arise.

   The  Company  will utilize both internal and external resources  to
reprogram,   or  replace,  and  test  the  software  for   Year   2000
modifications.   The  Company plans to complete the  mission  critical
elements of the Year 2000 project by December 31, 1998.  The  cost  of
the  Year 2000 project will be expensed as incurred over the next  two
years,  and  is  being  funded primarily  through  a  reallocation  of
resources  from  discretionary projects.  Therefore,  the  Year   2000
project   is   not  expected  to  result  in  significant  incremental
technology  costs  or  to  have material  effect  on  the  results  of
operations.   Through  March 31, 1998, the Company  has  incurred  and
expensed approximately $10.5 million related to the assessment of, and
preliminary   efforts  in  connection  with,  the  project   and   the
development  of a remediation plan.  The total remaining cost  of  the
Year 2000 project is estimated at $16.1 million.

   The costs of the project and the date on which the Company plans to
complete  the  Year 2000 modifications are based on management's  best
estimates, which were derived utilizing numerous assumptions of future
events  including  the  continued availability of  certain  resources,
third party modification plans and other factors.  However, there  can
be  no  guarantee  that these estimates will be  achieved  and  actual
results  could  differ materially from those plans.  Specific  factors
that  might  cause  such material differences  include,  but  are  not
limited  to,  the availability and cost of personnel trained  in  this
area,  the ability to locate and correct all relevant computer  codes,
and similar uncertainties.


Forward-Looking Statements
--------------------------
The  Company  wishes  to caution readers that the following  important
factors,  among others, in some cases have affected and in the  future
could  affect,  the  Company's  actual results  and  could  cause  the
Company's actual results for 1998 and beyond to differ materially from
those  expressed  in any forward-looking statements  made  by,  or  on
behalf  of, the Company.  When used in the MD&A discussion, the  words
"believes,"  "anticipated,"  "expects"  and  similar  expressions  are
intended  to  identify  forward-looking  statements.   See  "Important
Factors Regarding Forward-Looking Statements" filed as Exhibit 99.1 to
the  Company's  1997  Annual Report to Shareholders  and  incorporated
herein by reference.

Factors that may cause actual results to differ materially from  those
contemplated  or  projected, forecast, estimated or budgeted  in  such
forward   looking  statements  include  among  others,  the  following
possibilities:  (i) adverse catastrophe experience and severe weather;
(ii)  adverse loss development for events the Company insured in prior
years; (iii) heightened competition, including the intensification  of
price competition, the entry of new  competitors, and the introduction

                                  15
======================================================================

of  new  products by new and  existing competitors; (iv) adverse state
and federal legislation, including  decreases in rates, limitations on
premium levels, increases in minimum capital and reserve requirements,
benefit  mandates,  limitations on  the  ability  to  manage  care and
utilization,   liabilities  related  to  tobacco   products,  and  tax
treatment of insurance products; (v) changes in interest rates causing
a reduction  of  investment  income or in the market value of interest
rate  sensitive  investments;  (vi)  failure  to obtain new customers,
retain  existing  customers  or  reductions in  policies  in force  by
existing customers; (vii) higher service,  administrative,  or general
expense  due  to  the  need  for  additional  advertising,  marketing,
administrative or management information systems expenditures; (viii)
loss or retirement of key executives; (ix) increases in medical costs,
including   increases   in  utilization,  costs of  medical  services,
pharmaceuticals,  durable  medical  equipment and other covered items;
(x) termination  of provider contracts  or renegotiation at less cost-
effective rates or  terms  of payment;  (xi) changes in  the Company's
liquidity  due  to changes  in  asset  and  liability  matching; (xii)
restrictions  on insurance  underwriting,  based on  certain criteria;
(xiii) adverse  changes in  the ratings obtained by independent rating
agencies such  as Moody's, Standard and Poors and A.M. Best; and (xiv)
uncertainty related to the Year 2000 Issue.

                                  16
======================================================================
                                   
                                   
                                   
                      PART II - OTHER INFORMATION
                                   

                                   
                                   
                                   
                                ITEM 6
                                ------
                                   
                   Exhibits and Reports  on Form 8-K


(a)Exhibits

  EX-11              Statement regarding computation of per share
                     earnings.
                     
  EX-27              Financial Data Schedule

 .
(b)Reports on Form 8-K

                     None
                                   
                                   

                                  17
======================================================================
                                   
                                   
                              SIGNATURES


Pursuant  to the requirements of the Securities Exchange Act of  1934,
the  registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.


                         Citizens Corporation
                         --------------------
                              Registrant




Dated   May 13, 1998         /s/ John F. O'Brien
        ------------         ---------------------------------------
                             John F. O'Brien
                             President and Chief Executive Officer,
                             and Chairman of the Board




Dated   May 13, 1998         /s/ Edward J. Parry, III
        ------------         ---------------------------------------      
                              Edward J. Parry, III
                              Vice President, Chief Financial Officer,
                              Treasurer and Principal Accounting Officer

                                  18
======================================================================