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:       June 30, 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: 35,282,100
Shares of Common Stock Outstanding, as of August 1, 1998.
                           
                                  20
                         Total Number of Pages
                           
                                   1
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                           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 - 17


PART II - OTHER INFORMATION


   ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS  18


   ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K                     19 




SIGNATURES                                                       20

                                    2
 =============================================================

                    PART 1 - FINANCIAL INFORMATION
                                   
                     ITEM 1 - FINANCIAL STATEMENTS

                         CITIZENS CORPORATION
                   CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<S>                                 <C>       <C>        <C>      <C>
                                       (Unaudited)         (Unaudited)    
                                      Quarter Ended         Six Months    
                                                              Ended
(In millions, except per                 June 30,            June 30,     
share data)
                                    1998       1997       1998      1997   
                                   -------    -------    -------   ------- 
Revenues            
 Net premiums written              $ 222.6    $ 208.0    $ 445.3   $ 419.9
                                       
 Change in unearned premiums,net
   of prepaid reinsurance premiums     1.3       (2.1)       6.9      (0.1) 
                                   -------    -------    -------   -------
   
 Net premiums earned                 221.3      210.1      438.4     420.0 
 Net investment income                25.5       26.1       50.7      49.7 
 Net realized gains (losses)           1.6       (0.6)       5.8      19.1 
  on investments
 Other income                          1.5        1.5        2.9       3.0 
                                   -------    -------    -------   -------
    Total revenues                   249.9      237.1      497.8     491.8 
                                                                    
Expenses                                                            
 Losses and loss adjustment           
  expenses                           178.8      158.7      337.0     317.2
 Policy acquisition and other          
  operating expenses                  58.9       56.2      116.4     114.5
 Policyholders' dividends              0.9        1.8        2.8       3.4 
                                   -------    -------    -------   -------
    Total expenses                   238.6      216.7      456.2     435.1 
                                   -------    -------    -------   ------- 
                                                                   
 Income before federal income         11.3       20.4       41.6      56.7 
  taxes
                                                                    
Federal income tax expense             0.7        3.8        6.6      11.7 
                                   -------    -------    -------   -------
Net Income                         $  10.6    $  16.6    $  35.0   $  45.0
                                                                                                      
Per share data (basic and diluted)                                                     
                                                                    
  Net income                       $  0.30    $  0.47    $  0.99   $  1.27
                                                                                                      
Dividends declared to                 
  shareholders                     $  0.05    $  0.05    $  0.10   $  0.10
                                                                    
Weighted average shares            
  outstanding                         35.3       35.3       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)          June 30,    December 31
                                                1998         1997
                                            -----------   -----------  
Assets                                                  
Investments:                                                   
 Debt securities available-for-sale, at         
  fair value                                
  (Amortized cost of $1,463.8 and $1,453.1) $   1,529.4   $   1,522.4                   
 Equity securities available-for-sale, at                 
  fair value (Cost of $112.4 and $110.2)          212.1         182.7
 Other investments, at fair value (Cost of                 
  $8.7 and $17.7)                                   7.3          16.5
                                            -----------   -----------
   Total investments                            1,748.8       1,721.6
                                             
 Cash and cash equivalents                         38.8          46.5
 Accrued investment income                         26.1          26.5
 Premiums and notes receivable                    165.5         139.4
 Reinsurance recoverable on paid and unpaid                
  balances                                        481.1         474.3
 Prepaid reinsurance premiums                      68.3          70.4
 Deferred policy acquisition expenses              52.7          54.8
 Deferred federal income taxes                       -            3.7
 Other assets                                      65.8          68.1
                                            -----------   -----------  
   Total assets                             $   2,647.1   $   2,605.3
                                            ===========   ===========  
                                                               
Liabilities and Shareholders' Equity                           
Liabilities:                                                   
 Reserve for losses and loss adjustment
  expenses                                  $   1,215.3   $   1,206.1
 Unearned premiums                                383.3         378.5
 Deferred federal income taxes                     12.7            -
 Other liabilities                                111.1         147.8
                                            -----------   -----------  
   Total liabilities                            1,722.4       1,732.4
                                            ===========   =========== 
                                                        
Shareholder's 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                       161.2         156.1
 Retained earnings                                671.1         639.6
 Unrealized appreciation on investments,                       
  net of deferred federal income taxes            106.7          91.6
 Treasury stock, at cost (0.8 million                    
  shares)                                         (14.7)        (14.8)
                                            -----------   ----------- 
    Total shareholder's equity                    924.7         872.9
                                            -----------   -----------
      Total liabilities and shareholder's  
       equity                               $   2,647.1   $   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)
                                               Six Months Ended
(In millions)                                      June 30,
                                                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                            5.1        -
                                               ------    ------
 Balance at end of period                       161.2     156.1
                                               
                                                               
Retained earnings                                              
 Balance at beginning of period                 639.6     552.5
 Net income                                      35.0      45.0
 Dividends declared to shareholders              (3.5)     (3.5)
                                               ------    ------
 Balance at end of period                       671.1     594.0
                                               ------    ------
                                                               
Unrealized appreciation on investments, net                    
 Balance at beginning of period                  91.6      60.5
 Appreciation during the period                  23.3       8.0
 Provision for deferred federal income taxes     (8.2)     (2.8)
                                               ------    ------
 Balance at end of period                       106.7      65.7
                                               ------    ------
                                                               
Treasury stock                                                 
 Balance at beginning of period                 (14.8)    (15.0)
 Shares reissued                                  0.1        -
                                               ------    ------ 
 Balance at end of period                       (14.7)    (15.0)
                                               ------    ------
                                                               
Total shareholders' equity                     $924.7    $801.2
                                               ======    ====== 
 
 The accompanying notes are an integral part of these financial statements
    
 </TABLE>
    
                                   5                                  
========================================================================
                         
                         CITIZENS CORPORATION
            CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

<TABLE>
<S>                                     <C>               <C>
                                          (Unaudited)     (Unaudited)                                              
                                         Quarter Ended  Six Months Ended
(In millions)                              June 30,          June 30,
                                                            
                                         1998     1997     1998     1997
                                        ------   ------   ------   ------                 
Net income                              $ 10.6   $ 16.6   $ 35.0   $ 45.0
                                                      
                                                                      
Other comprehensive income:                                           
 Unrealized appreciation on                                
  investments during period                9.1     48.9     23.3      8.0
 (Provision) for deferred federal                                     
  income taxes related to items of            
  other comprehensive income              (3.2)   (17.0)    (8.2)    (2.8)
                                        ------   ------   ------   ------
 Other comprehensive income                5.9     31.9     15.1      5.2
                                        ------   ------   ------   ------ 
 Comprehensive income                   $ 16.5   $ 48.5   $ 50.    $ 50.2
                                        ======   ======   ======   ======     
                                   
 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)
                                                Six Months Ended
(In millions)                                       June 30,
                                                 1998      1997
                                               --------  --------
Cash flows from operating activities                      
Net income                                     $   35.0  $   45.0
                                                      
Adjustments to reconcile net income to                          
 net cash provided by operating activities:                     
 Net realized gains on investments                 (5.8)    (19.1)
 Deferred federal income tax benefit               (1.8)     (0.1)
  Change in assets and liabilities:                              
  Deferred policy acquisition expenses              2.1      (0.2)
  Premiums and notes receivable, net of                    
   reinsurance premiums                            (1.0)     (0.6)
  Unearned premiums, net of prepaid                        
   reinsurance premiums                             6.9      (0.1)
  Reserve for losses and loss adjustment                        
   expenses, net of reinsurance recoverable         2.4      17.6)
  Other liabilities                               (36.7)    (13.0)     
  Other, net                                       10.1       7.8          
                                               --------  --------  
   Net cash provided by operating activities       11.2       2.1
                                               --------  --------  
                                                                
Cash flows from investing activities                            
 Proceeds from sale of available-for-sale debt             
  securities                                       88.3     220.4
 Proceeds from available-for-sale debt                      
  securities maturing or called                    86.2      39.4
 Proceeds from sale of available-for-sale                   
  equity securities and other investments          17.4      59.2
 Purchases of available-for-sale debt                     
  securities                                     (182.3)   (311.9)
 Purchases of sale of available-for-sale                   
  equity securities and other investments         (8.5)      (5.6)
 Change in net receivable from securities                    
  transactions not settled                        (10.3)      3.7
 Other investing activities                        (6.3)     (0.6)
                                               --------  -------- 
   Net cash (used for) provided by                            
    investing activities                          (15.5)      4.6
                                               --------  --------                 
Cash flows from financing activities                            
 Dividends paid to shareholders                    (3.5)     (3.5)
 Treasury stock reissued                            0.1        -
                                               --------  --------
   Net cash used for financing activities          (3.4)     (3.5)
                                               --------  -------- 
Change in cash and cash equivalents                (7.7)      3.2
Cash and cash equivalents at beginning of                   
 period                                            46.5      36.1
                                               --------  --------
Cash and cash equivalents at end of period     $   38.8  $   39.3
                                               ========  ========
                                               
 The accompanying notes are an integral part of these financial statements
    
 </TABLE>
    
                                   7                                 
=====================================================================

                         CITIZENS CORPORATION
        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                                   
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 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  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  internal-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  fiscal
years  beginning after December 15, 1998.  In the quarter ended   June
30,  1998, the Company adopted SOP No. 98-1 effective January 1, 1998,
resulting  in  an  increase in pre-tax income of  $0.6  million.   The
adoption  of  SOP No. 98-1 had no material effect on  the  results  of
operation  or financial position for the three months ended March  31,
1998.

In   June  1998,  the  Financial  Accounting  Standards  Board  issued
Statement of  Financial  Accounting Standards No. 133, "Accounting for
Derivative Instruments  and  Hedging  Activities" (Statement No. 133),
which establishes  accounting and  reporting standards  for derivative

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

instruments.  Statement  No. 133 requires that an entity recognize all
derivatives  as  either  assets  or  liabilities  at fair value in the
statement  of  financial  position, and establishes special accounting
for the following three different types of hedges:  fair value hedges,
cash  flow  hedges,  and  hedges  of foreign currency exposures of net
investments  in foreign  operations.  This  statement is effective for
fiscal years beginning after June 15, 1999.  The Company believes that
the adoption of this statement  will not have a material effect on the
results of operations or financial position.

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 June 30, 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  the
Company's previously reported earnings per share.

3.  MCCA Assessment

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  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 issued refunds to member companies during  June  of
1998.  The MCCA refunded $127 million to Citizens Insurance Company of
America  (CICA) based on CICA's 1997 insured vehicles, in  June  1998.
The  Company  remitted  the  refund  to policyholders.   This  had  no
significant effect on the results of operations.

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 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 $5.1 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 June 30, 1998, was $10.6 million,  or
$0.30 per  share, compared to $16.6 million, or $0.47 per  share,  for
the  quarter ended June 30, 1997.  Excluding net realized  losses  and
restructuring  charges, both net of taxes, net income  decreased  $8.5
million,  to $9.4 million for the quarter ended June 30, 1998,  versus
$17.9  million during the comparable period of 1997. The  decrease  in
net  income  is primarily attributable to a $11.5 million increase  in
the  underwriting loss, partially offset by decreased  federal  income
tax expense.  The decrease in underwriting results is primarily due to
catastrophe losses of $29.6, compared to $3.2 million during the  same
period  in 1997, partially offset by an $11.2 million increase in  net
premiums  earned.  Federal income tax expense decreased $3.1  million,
to $0.7 million, while the effective tax rate decreased to 6.2% in the
quarter ended June 30, 1998 from 18.6% for the same period in 1997.

Net  income for the six months ended June 30, 1998, was $35.0 million,
or  $0.99  per share, compared to $45.0 million, or $1.27 per   share,
for  the six months ended June 30, 1997.  Excluding realized gains and
restructuring  charges, both net of taxes, net income  decreased  $2.9
million,  to  $30.6 million for the six months ended  June  30,  1998,
versus  $33.5  million  during the comparable  period  of  1997.   The
decrease  in  net income is primarily attributable to  a  decrease  in
realized  gains  of $13.3 million and a $3.2 million increase  in  the
underwriting  loss, partially offset by decreased federal  income  tax
expense.   Realized gains were $5.8 million for the six  months  ended
June 30, 1998 versus $19.1 million for the same period ended June  30,
1997.   The  decrease  in underwriting results  is  primarily  due  to
catastrophe  losses of $28.7 million, compared to $8.6 million  during
the same period in 1997, partially offset by an $18.4 million increase
in  net  premiums earned.  Federal income tax expense  decreased  $5.1
million,  to  $6.6 million, while the effective tax rate decreased  to
15.9%  in  the six months ended June 30, 1998 from 20.6% for the  same
period in 1997.

Revenues

Net  premiums  earned  increased $11.2 million,  or  5.3%,  to  $221.3
million  for  the quarter ended June 30, 1998, resulting from  a  $7.2
million  increase in the Company's personal lines and a  $4.0  million
increase  in  the  Company's commercial lines.   Net  premiums  earned
increased $18.4 million, or 4.4%, to $438.4 million for the six months
ended  June  30, 1998, resulting from an increase of $11.4 million  in
the  Company's  personal lines and a increase of $7.0 million  in  the
Company's  commercial  lines. Contributing to this  growth  were  rate
increases  in  all major lines except the workers' compensation  line,
and  an  increase in net premiums earned of $8.3 million for  the  six
months  ended  June  30,  1998, in Ohio and  Indiana,  resulting  from
expansion in these states.

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


Segment Results
---------------

Personal segment

Personal  segment premiums represented 68.0% and 68.2%  of  total  net
premiums  earned  for  the  quarters ended June  30,  1998  and  1997,
respectively, and 68.1% and 68.3% of total net premiums earned for the
six months ended June 30, 1998 and 1997, respectively.

<TABLE>
<S>                           <C>       <C>       <C>      <C>                     
For the Periods Ended           Three Months         Six Months     
June 30, (in millions)        ------    ------    ------   ------                                      
                               1998      1997      1998     1997
                              ------    ------    ------   ------                           
Net premiums earned           $150.5    $143.3    $298.4   $287.0   
                                   
Losses and loss adjustment                                          
expenses                       125.5     107.9     224.6    221.7
                                                                    
Policy acquisition and other                                        
underwriting expenses           39.0      37.7      77.6     77.2                              
                              ------    ------    ------   ------ 
Underwriting loss             $(14.0)   $ (2.3)   $ (3.8)  $(11.9) 
                              ======    ======    ======   ======
</TABLE>                                                                    

Personal segment net premiums earned increased $7.2 million, or  5.0%,
to  $150.5  million for the quarter ended June 30, 1998,  from  $143.3
million  for  the  quarter ended June 30, 1997. Personal  segment  net
premiums  earned increased $11.4 million, or 4.0%, to  $298.4  million
for  the  six months ended June 30, 1998, from $287.0 million for  the
six  months  ended  June  30,  1997.  These  increases  are  primarily
attributable  to a twelve month average rate increase in the  personal
automobile and homeowners lines of 5.9% and 15.8%, respectively.  This
is partially offset by a slight  decrease in policies in force in both
the  personal  automobile and homeowner lines.  While  management  has
taken  steps  to increase penetration in the 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 loss was $14.0  million  and  $2.3
million  for  the quarters ended June 30, 1998 and 1997, respectively.
Loss  and  LAE  increased $17.6 million primarily as a result  of  the
increase  in  catastrophe losses. Catastrophe losses  increased  $16.6
million  to  $18.8 million for the quarter ended June 30,  1998,  from
$2.2  million  for  the  same  period ended  1997,  primarily  in  the
homeowner's line.  Policy acquisition and other underwriting  expenses
increased  $1.3  million,  or 3.4%, to $39.0 million,  reflecting  the
growth  in  net  premiums  earned and increased  technology  expenses,
partially offset by reductions in employee related expenses.

The  personal segment underwriting loss improved to $3.8 million  from
$11.9  million  for  the six months ended June   30,  1998  and  1997,
respectively. The decrease in the underwriting loss is attributable to
an  increase in favorable development on prior year reserves,  and  to
improved  current year claims activity in the personal automobile  and
homeowner  lines.   This  is  partially  offset  by  an  increase   in
catastrophe losses of $10.7 million over the prior year, primarily  in
the  homeowners  line.   Policy  acquisition  and  other  underwriting
expenses increased $0.4 million, or 0.5%, to $77.6 million, reflecting
the  growth in net premiums earned and increased technology  expenses,
partially offset by reductions in employee related expenses.

                                    11                                 
=============================================================


Commercial segment

Commercial segment premiums represented 32.0% and 31.8% of  total  net
premiums  earned  for  the  quarters ended June  30,  1998  and  1997,
respectively.  Commercial segment premiums represented 31.9% and 31.7%
of  the  total net premiums earned for the six months ended  June  30,
1998 and 1997 respectively.

<TABLE>
<S>                           <C>       <C>       <C>      <C>
                                Three Months         Six Months                                    
                                              
For the Periods Ended         ------    ------    ------    ------       
June 30, (in millions)         1998      1997      1998      1997
                              ------    ------    ------    ------                           
Net premiums earned             70.8      66.8     140.0     133.0
                                                                    
Losses and loss adjustment                                          
expenses                        53.3      49.4     112.4      94.1
                                                                    
Policy acquisition and other                                        
underwriting expenses           18.4      17.6      35.9      35.3                              
                                                                     
Policyholders' dividends         0.9       1.8       2.8       3.4                                 
                              ------    ------    ------    ------ 
                                                                    
Underwriting (loss) profit    $ (1.8)   $ (2.0)   $(11.1)   $  0.2    
                              ======    ======    ======    ======
</TABLE>                              

Commercial  segment  net premiums earned increased  $4.0  million,  or
6.0%,  to $70.8 million for the quarter ended June 30, 1998 from $66.8
million  for the quarter ended June 30, 1997.  Commercial segment  net
premiums earned increased $7.0 million, or 5.3%, to $140.0 million for
the  six  months ended June 30, 1998 from $133.0 million for  the  six
months  ended  June  30, 1997.  The increases in net  premiums  earned
primarily  reflects  growth in policies  in  force  of  14.0%  in  the
commercial  multiple  peril  line and  a  twelve  month  average  rate
increase  of 8.3% and 6.2% in commercial multiple peril and commercial
automobile lines, respectively.  These increases are partially  offset
by  a  10.2% decrease in policies in force and a twelve month  average
rate  decrease of 3.1% in the workers' compensation line.   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 $1.8 million  and  $2.0
million  for  the quarters ended June 30, 1998 and 1997, respectively.
The decrease in underwriting loss is attributable to favorable current
year claims activity in all major commercial lines.  This is partially
offset by a $9.8 million increase in catastrophe losses, primarily  in
the  commercial  multiple peril line.  Policy  acquisition  and  other
underwriting  expenses  increased $0.8  million  as  a  result  of  an
increase  in  net  premiums earned and increased technology  expenses,
partially offset by a decrease in employee related costs.

The commercial segment underwriting loss was $11.1 million for the six
months  ended  June 30, 1998, compared to a $0.2 million  underwriting
profit for the six months ended June 30, 1997.  The deterioration   in
underwriting  profit  is attributable to a $9.4  million  increase  in
catastrophe  losses, primarily in the commercial multiple peril  line,
as  well as a  $9.2 million decrease in favorable development on prior
year  reserves,  primarily in the workers' compensation  line.   These
increases  are  partially  offset by  favorable  current  year  claims
activity  in  the commercial multiple peril and commercial  automobile
lines.   Policy acquisition and other underwriting expenses  increased
$0.6  million  as a result of an increase in net premiums  earned  and
increased  technology  expenses, partially offset  by  a  decrease  in
employee related costs.

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


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.   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 six months ended June 30,             1998      1997   
 (in millions)                              --------  --------
                                                               
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                            366.9     352.8
                                                               
     Decrease in provision for insured                         
     events of prior years                     (29.9)    (35.6)
                                            --------  --------                   
Total incurred losses and LAE                  337.0     317.2                
                                             
                                                               
Payments, net of reinsurance recoverable:                      
                                                               
Losses and LAE attributable to insured                    
events of current period                       151.5     157.6
                                                               
Losses and LAE attributable to insured                    
events of prior years                          176.3     170.8
                                            --------  --------                    
Total payments                                 327.8     328.4 
                                                               
Change in reinsurance recoverable on                        
unpaid losses                                  -           5.2
                                            --------  --------                   

Reserve for losses and LAE, end of period   $1,215.3  $1,232.5      
                                            ========  ========
</TABLE>                                               
                                                               
As part of an ongoing process, the reserves have been re-estimated for
all  prior  accident  years and were decreased by $29.9  million,  and
$35.6  million,  for  the six months ended June  30,  1998  and  1997,
respectively.   The decline in favorable development is primarily  due
to  a  decrease  in  workers' compensation favorable  development  and
unfavorable development in the commercial automobile line for the  six
months ended June 30, 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.

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

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


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 enactment,  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.
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.  Effective June 1, 1998,
the  Company  purchased an additional treaty for losses in  excess  of
$180.0  million and up to $230.0 million, of which the Company retains
10%  of  the  loss.  Amounts in excess of $230.0 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 $25.5 million and $26.1 million
for  the  quarters  ended June 30, 1998 and 1997,  respectively.   The
decrease  is  the  result of a $2.2 million decrease  in  income  from
limited partnerships to a $0.2 million net loss for the quarter  ended
June  30,  1998 from a $2.0 million net income for the same period  in
1997.    The  limited  partnerships  pursue  investment  opportunities
primarily through global fixed-income trading strategies.  The average
pre-tax  yields on debt securities were 6.6% and 6.8% for the quarters
ended  June  30,  1998 and 1997, respectively.  Net investment  income
after taxes was $21.3 million and $21.2 million for the quarters ended

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


June  30,  1998  and  1997,  respectively.   Net  realized  gains   on
investments  before taxes were $1.6 million during the second  quarter
of  1998 and net realized losses on investments before taxes were $0.6
million in 1997.

Net investment income before taxes was $50.7 million and $49.7 million
for  the  six months ended June 30, 1998 and 1997, respectively.   The
increase  is the result of an increase in dividend income from  equity
securities  and  reduced  investment expenses,  which  were  partially
offset  by  the  decrease  in income from limited  partnerships.   The
average pre-tax yield on debt securities was 6.6% during the first six
months  of  1998 and 6.8% for the same period in 1997.  Net investment
income  after taxes was $42.3 million and $41.0 million  for  the  six
months ended June 30, 1998 and 1997, respectively.  Net realized gains
on investments before taxes were $5.8 million and $19.1 million during
the  first  six  months 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.


Investment Portfolio
--------------------

The  Company's  investment  portfolio  increased  $27.2  million,   to
$1,748.8  million during the first six months of 1998,  from  $1,721.6
million at December 31, 1997, primarily due to market appreciation  of
equity  securities.   Debt  securities  increased  $7.0  million,   to
$1,529.4  million,  from $1,522.4 million, and represented  87.5%  and
88.5%  of  the carrying value of all investments at June 30, 1998  and
December  31,  1997,  respectively. Tax-exempt securities  represented
69.0%  of total debt securities at June 30, 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  June  30,
1998  was  $163.9 million compared to $140.6 million at  December  31,
1997. Unrealized depreciation during the first six months of the  year
was  $3.7  million  for bonds, and unrealized appreciation  on  equity
securities and other investments was $27.0 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 six months  ended
June 30, 1998, was $11.2 million compared to $2.1 million in the prior
year period.  This increase primarily reflects an increase in premiums
collected.

Net  cash (used for) provided by investing activities for the  Company
was  ($15.5) million and $4.6 million for the first six months of 1998
and  1997,  respectively, resulting primarily from the  settlement  of
investment transactions.

Net  cash  used  for  financing activities for the  Company  was  $3.4
million  and $3.5 million, for the first six months of 1998 and  1997,
respectively, representing dividends paid to shareholders.

Shareholders' equity was $924.7 million, or $26.21 per share  at  June
30,  1998,  compared to $872.9, or $24.75 per share  at  December  31,
1997, resulting from higher net income and unrealized appreciation  on
investments.    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.

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


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.

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  June  30, 1998, the Company  has  incurred  and
expensed approximately $14.1 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 $13.9 million.

The  Company's  contingency  plans  related to the Year 2000 issue are
addressed  in  its  Continuity  of  Operations  Plan (COOP), developed 
jointly with an outside vendor.  The COOP  contains immediate steps to 
keep business  functions  operating  while unforeseen Year 2000 issues 
are  being  addressed.  The COOP outlines responses to situations that 
may  affect  critical  business  functions.  The  COOP  also  provides 
triage guidance,a documented order of actions to respond to  problems.  
During  the  triage  process,  business priorities are established and 
"Critical Points of Failure"  are  identified  as having a significant 
impact on the business.  The Company's  contingency plans are designed
to keep  a  business  unit's  operation  functioning in the event of a 
failure  or  delay due to Year 2000 record format and date calculation
changes.

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.

                                    16                                 
============================================================


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
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.

                                  17                                 
===============================================================


                       PART II - OTHER INFORMATION
                                   
                                ITEM 4
                                ------   
                                   
          Submission of Matters to a Vote of Security Holders
          ---------------------------------------------------
          
The  registrant's annual shareholders' meeting was  held  on  May  12,
1998.   All  six directors nominated for re-election by the  board  of
directors  were  named in the proxies for the meeting,  which  proxies
were  solicited pursuant to Regulation 14A of the Securities  Exchange
Act  of 1934.  The following individuals were elected to serve  a  one
year term:



                                    VOTES FOR     WITHHELD
                                   -----------   ----------
                  
  James A. Cotter, Jr.              34,910,309     33,598
  Neal J. Curtin                    34,910,309     33,598
  Dona Scott Laskey                 34,910,309     33,598
  J. Barry May                      34,910,309     33,598
  James R. McAuliffe                34,910,309     33,598
  John F. O'Brien                   34,909,809     34,098
  Eric A. Simonsen                  34,909,759     34,148

Shareholders ratified the appointment of PricewaterhouseCoopers LLP as
the  Independent Public Accountants of Citizens Corporation for  1998:
for 34,936,512; against 3,895; withheld 3,500.

Shareholders  voted  against  a shareholder  sponsored  proposal  with
respect  to commissioning a study as set forth in more detail  in  the
Proxy Statement: for 28,875; against 34,408,635; withheld 52,908; non-
vote 453,489.
                                   
                                  18                                 
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                                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

      On  June 10, 1998, a report on Form 8-K was filed under Item  5,
Other  Events,  the  Registrant's  announcement  that  second  quarter
results  will  be  impacted  by  catastrophe  losses  resulting   from
electrical,  rain  and wind storms which struck  Michigan  during  the
final  days  of   May 1998.  The impact of this catastrophe  loss  was
$29.6 million for the period ended June 30, 1998.


      On  July 31, 1998, a report on Form 8-K was filed under Item  5,
Other Events, the Registrant's announcement that third quarter results
will  be  negatively  impacted by catastrophe  losses  resulting  from
electrical,  rain  and wind storms which struck the Detroit,  Michigan
metropolitan  area on July 22, 1998.  Currently, the  company  expects
approximately $6.8 million in pre-tax catastrophe losses.
                                   
                                 19                                 
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                              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   August 13, 1998            /s/ John F.O'Brien
        ---------------           ------------------------             
                                  John F. O'Brien
                                  President and Chief Executive
                                  Officer, and Chairman of the Board




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

                                 20                                 
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