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:       September 30, 1997
                                   
                                  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: 35,271,800
Shares of Common Stock Outstanding, as of October 1, 1997.
                           
                           
                                15
                       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 Cash Flows                 6
           Notes to Consolidated Financial Statements            7


   ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS
             OF FINANCIAL CONDITION AND RESULTS OF
             OPERATIONS                                          8 - 13


PART II - OTHER INFORMATION



   ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K                     14





SIGNATURES                                                       15



                                    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          Nine Months Ended     
(In millions, except per share data)                September 30,            September 30,       
                                                 1997         1996         1997        1996  
                                              ---------    ---------    ---------   ---------
Revenues                                                                                      
 Net premiums written                        $   242.2    $   229.7    $   662.1   $   651.5  
 Change in unearned premiums, net                                                             
   of prepaid reinsurance premiums                27.6         18.9         27.5        25.1
                                              ---------    ---------    ---------   ---------
 Net premiums earned                             214.6        210.8        634.6       626.4  
 Net investment income                            25.2         23.6         74.9        64.4  
 Net realized gains (losses) on investments        8.3         (0.8)        27.4        14.2  
 Other income                                      1.6          1.2          4.6         4.6 
                                              ---------    ---------    ---------   ---------
    Total revenues                               249.7        234.8        741.5       709.6  
                                                                                              
Expenses                                                                                      
 Losses and loss adjustment expenses             171.2        140.6        488.4       457.4  
 Policy acquisition and other operating           
   expenses                                       57.0         58.0        171.5       169.2  
 Policyholders' dividends                          1.3          2.0          4.7         5.6
                                              ---------    ---------    ---------   ---------
    Total expenses                               229.5        200.6        664.6       632.2  
                                              ---------    ---------    ---------   ---------
                                                                                              
 
 Income before federal income taxes               20.2         34.2         76.9        77.4  
                                                                                              
Federal income tax expense                         2.9          7.1         14.6        15.7 
                                              ---------    ---------    ---------   ---------
Net Income                                   $    17.3    $    27.1    $    62.3   $    61.7
                                              =========    =========    =========   =========
                                                                                
                                                                                              
Per share data                                                                                
                                                                                              
  Net income                                 $    0.50    $    0.77    $    1.77   $    1.74
                                              =========    =========    =========   =========
                                                                                              
Dividends declared to shareholders           $    0.05    $    0.05    $    0.15   $    0.15
                                              =========    =========    =========   =========
                                                                                              
Weighted average shares outstanding               35.3         35.3         35.3        35.5 
                                              =========    =========    =========   =========

           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)                    September 30,   December 31,
                                                            1997            1996
                                                         -----------     -----------
Assets                                                                 
Investments:                                                                       
 Debt securities available-for-sale, at fair value      $   1,497.7     $   1,398.3
  (Amortized cost of $1,442.1 and $1,366.9)                                        
 Equity securities available-for-sale, at fair value          177.5           192.3
  (Cost of $105.1 and $132.3)                                                       
 Other investments, at fair value                              15.9            14.6
  (Cost of $15.8 and $13.2)                              -----------     -----------
   Total investments                                        1,691.1         1,605.2
 Cash and cash equivalents                                     43.3            36.1
 Accrued investment income                                     24.7            25.3
 Premiums receivable                                          153.1           140.3
 Reinsurance recoverable on paid and unpaid balances          480.1           476.8
 Prepaid reinsurance premiums                                  67.6            62.8
 Deferred policy acquisition expenses                          57.9            54.3
 Deferred federal income taxes                                 16.5            25.4
 Other assets                                                  67.2            76.8
                                                         -----------     -----------
   Total assets                                        $    2,601.5     $   2,503.0
                                                         ===========     ===========
                                                              
Liabilities and Shareholders' Equity                                               
Liabilities:                                                                       
 Reserve for losses and loss adjustment expenses       $    1,230.8      $  1,238.5
 Unearned premiums                                            394.6           362.3
 Other liabilities                                            141.5           147.7
                                                         -----------     -----------
   Total liabilities                                        1,766.9         1,748.5
                                                         -----------     -----------              
Shareholder's Equity                                                   
Series A preferred stock, $0.01 par value per share;                               
   authorized 10.0 million shares; none issued or
   outstanding in 1997 and 1996                                   -               -
 Common stock, par value $0.01 per share;                                          
   authorized 100.0 million shares; issued 36.1                 0.4             0.4
   million shares
 Additional paid-in capital                                   156.1           156.1
 Retained earnings                                            609.5           552.5
 Unrealized appreciation on investments, net of                                    
   deferred federal income taxes                               83.5            60.5
 Treasury stock, at cost (0.8 million shares in 1997          (14.9)          (15.0)
   and 1996)                                             -----------     -----------
    Total shareholder's equity                                834.6           754.5
                                                         -----------     -----------
     Total liabilities and shareholder's equity         $   2,601.5      $  2,503.0
                                                         ===========     ===========
               
      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)
                                                           Nine Months Ended
(In millions)                                                 September 30,
                                                           1997          1996
                                                        ----------    ----------
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 and end of period                     156.1         156.1
                                                        ----------    ----------
                                                                               
Retained earnings                                                              
 Balance at beginning of period                             552.5         475.5
 Net income                                                  62.3          61.7
 Dividends declared to shareholders                          (5.3)         (5.3)
                                                        ----------    ----------
 Balance at end of period                                   609.5         531.9
                                                        ----------    ----------
                                                                               
Unrealized appreciation on investments, net                                    
 Balance at beginning of period                              60.5          54.7
 Appreciation (depreciation) during the period               35.3         (19.7)
 (Provision) benefit for deferred federal income            (12.3)          6.9
   taxes                                                ----------    ----------
 Balance at end of period                                    83.5          41.9
                                                        ----------    ----------
                                                                               
Treasury stock                                                                 
 Balance at beginning of period                             (15.0)         (3.9)
 Shares purchased at cost                                       -         (11.1)
 Shares reissued                                              0.1             -
                                                        ----------    ----------
 Balance at end of period                                   (14.9)        (15.0)
                                                        ----------    ----------
                                                                               
Total shareholders' equity                              $   834.6     $   715.3
                                                        ==========    ==========
                                                        
     The accompanying notes are an integral part of these financial statements.
     
</TABLE>     
     
                                                     
        
                                    5
==========================================================================
                              
                              
                                   
                         CITIZENS CORPORATION
                 CONSOLIDATED STATEMENTS OF CASH FLOWS
                 
<TABLE>
<S>                                                     <C>           <C>    
                                                              (Unaudited)
                                                           Nine Months Ended
(In millions)                                                September 30,
                                                           1997          1996
                                                        ----------    ----------
Cash flows from operating activities                                 
Net income                                              $    62.3     $    61.7
Adjustments to reconcile net income to                                         
 net cash provided by operating activities:                                    
 Net realized gains on investments                          (27.4)       ( 14.2)
 Deferred federal income tax (benefit) provision             (3.4)          1.5
 Change in assets and liabilities:                                             
  Deferred policy acquisition expenses                       (3.6)         (5.6)
  Premiums and notes receivable, net of reinsurance         (16.9)        (13.7)
    premiums
  Unearned premiums, net of prepaid reinsurance              27.5          25.1
    premiums
  Reserve for losses and loss adjustment expenses,                             
    net of reinsurance recoverable                           (11.0)         0.5
  Other, net                                                  7.7           3.2
                                                        ----------    ----------
   Net cash provided by operating activities                 35.2          58.5
                                                        ----------    ----------
                                                                               
Cash flows from investing activities                                           
 Proceeds from sale of available-for-sale debt              284.2         315.6
    securities
 Proceeds from available-for-sale debt securities            71.1         139.2
    maturing or called                                                         
 Proceeds from sale of available-for-sale equity            115.1          69.8
    securities and other investments
 Purchases of available-for-sale debt securities           (431.3)       (572.5)
 Purchases of available-for-sale equity                     (63.8)        (35.9)
    securities and other investments
 Change in net receivable from securities                     3.7          32.1
    transactions not settled
 Other investing activities                                  (1.8)        ( 2.2)
                                                        ----------    ----------
            Net cash used for investing activities          (22.8)        (53.9)
                                                        ----------    ----------
                                                                               
Cash flows from financing activities                                           
 Dividends paid to shareholders                              (5.3)         (5.3)
 Treasury stock purchased, at cost                              -         (11.1)
 Shares reissued                                              0.1             -
                                                        ----------    ----------
  Net cash used for financing activities                     (5.2)        (16.4)
                                                        ----------    ----------
                                                                               
Change in cash and cash equivalents                           7.2         (11.8)
Cash and cash equivalents at beginning of period             36.1          59.1
                                                        ----------    ----------
Cash and cash equivalents at end of period              $    43.3    $     47.3
                                                        ==========    ==========
                                                        
   The accompanying notes are an integral part of these financial statements.
   
</TABLE>                                                   



                                    6
==========================================================================



                        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
1996  Annual  Report to Shareholders, as filed on Form 10-K  with  the
Securities and Exchange Commission.

In  June  1997,  the  FASB  issued Statement of  Financial  Accounting
Standards  No.  130, "Reporting Comprehensive Income" (FAS  No.  130).
FAS  No.  130 established 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.  Comprehensive income
will  thus  represent  the sum of net income and  other  comprehensive
income,  although FAS No. 130 does not require the use  of  the  terms
comprehensive income or other comprehensive income.   The  accumulated
balance  of  other comprehensive income shall be displayed  separately
from retained earnings and additional paid-in capital in the statement
of  financial position.  This statement is effective for fiscal  years
beginning after December 15, 1997.  The Company anticipates  that  the
adoption  of FAS No. 130 will result primarily in reporting unrealized
gains  and  losses  on  investments in debt and equity  securities  in
comprehensive income.

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 September 30, 1997, the Company is holding these  shares
as  treasury stock for the purpose of funding current and future stock
option awards and for other purposes.

Recently  the FASB issued Statement of Financial Accounting  Standards
No.  128,  Earnings Per Share, which supersedes APB  Opinion  No.  15,
Earnings   Per  Share.   This  standard  replaces  the   primary   EPS
requirements  with  a  basic  EPS  computation  and  requires  a  dual
presentation of basic and diluted EPS for those companies with complex
capital  structures.  The Company intends to adopt  the  standards  of
Statement  No. 128 for financial statements issued after December  15,
1997.   The  impact of this statement is expected to be immaterial  on
the Company's EPS calculation.



                                    7
==========================================================================

                                   

                    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 September  30,  1997,  was  $17.3
million,  or $0.50 per share, compared to $27.1 million, or $0.77  per
share,  for the quarter ended September 30, 1996.  Excluding  realized
gains  (losses)  and restructuring charges, both  net  of  taxes,  net
income decreased $15.5 million, to $12.2 million for the quarter ended
September 30, 1997, versus $27.7 million during the comparable  period
of  1996.  The decrease in net income is primarily attributable  to  a
decrease  in  the underwriting profit of $24.5 million, offset  by  an
increase  in  net  realized gains of $9.1 million and  a  decrease  in
federal  income tax expense.  The decline in underwriting  results  is
primarily  due to an increase in catastrophe losses of $12.9  million,
lower  net  premiums  earned in the workers' compensation  line,  less
favorable  prior  year  claims experience in the  personal  automobile
line,  and  less  favorable  current year  claims  experience  in  the
commercial  multiple  peril  and  commercial  automobile  lines.   Net
investment  income  increased $1.6 million reflecting  the  growth  in
invested assets and higher yields on debt securities partially  offset
by lower income from limited partnerships.  Federal income tax expense
decreased $4.2 million, to $2.9 million, while the effective tax  rate
decreased to 14.1% in the quarter ended September 30, 1997 from  20.8%
for the same period in 1996.

Net  income  for the nine months ended September 30, 1997,  was  $62.3
million, or $1.77 per  share, compared to $61.7 million, or $1.74  per
share,  for  the  nine  months ended September  30,  1996.   Excluding
realized  gains  and restructuring charges, both  net  of  taxes,  net
income  decreased $6.8 million, to $45.7 million for the  nine  months
ended  September 30, 1997, versus $52.5 million during the  comparable
period  of 1996.  The increase in net income is primarily attributable
to  an increase in realized gains of $13.2 million and an increase  in
net  investment  income of $10.5 million, offset by  a  $22.5  million
increase  in  the  underwriting loss.  The growth  in  net  investment
income  resulted primarily from an increase in average invested assets
and  the Company's shift to higher yielding debt securities, including
longer  durations and non-investment grade securities. The decline  in
underwriting results is primarily due to lower net premiums earned  in
the  workers' compensation line and less favorable current year claims
experience in the commercial multiple peril line.  Federal income  tax
expense  decreased $1.1 million, to $14.6 million, while the effective
tax  rate  decreased to 18.9% in the nine months ended  September  30,
1997 from 20.3% for the same period in 1996.


Revenues

Net premiums earned increased $3.8 million, or 1.8%, to $214.6 million
for  the  quarter  ended  September 30, 1997, resulting  from  a  $4.7
million increase in the Company's personal lines partially offset by a
$0.9 million decrease in the Company's commercial lines.  Net premiums
earned increased $8.2 million, or 1.3%, to $634.6 million for the nine
months  ended September 30, 1997, resulting from an increase of  $19.4
million  in  the Company's personal segments and a decrease  of  $11.2
million in the Company's commercial segments.  Contributing to premium
growth are an increase in net premiums earned of $11.3 million in Ohio
and  Indiana  resulting from expansion in these states, a nonrecurring
$3.0  million  decrease in premiums ceded to the Michigan Catastrophic
Claims  Association  (MCCA)  in the first  quarter  of  1997,  and  an
increase  in personal automobile and homeowners rates.  These  factors
were  partially offset by rate reductions in the workers' compensation
line, where competitive conditions continue in Michigan.



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



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

Personal segment

Personal  segment premiums represented 67.9% and 66.9%  of  total  net
premiums  earned for the quarters ended September 30, 1997  and  1996,
respectively, and 68.2% and 66.0% of total net premiums earned for the
nine months ended September 30, 1997 and 1996, respectively.

<TABLE>
<S>                                                      <C>        <C>          <C>        <C>

                                                       --------------------    --------------------
For the Periods Ended                                       Three Months            Nine Months      
September 30, (in millions)                               1997       1996        1997        1996
                                                       --------------------    --------------------
                                                                                                     
Net premiums earned                                     $  145.7   $  141.0     $  432.7   $  413.3  
                                                                                                     
Losses and loss adjustment expenses                        113.9       95.6        335.6      305.6  
                                                                                                     
Policy acquisition and other underwriting expenses                                                   
                                                            37.3       38.5        114.5      112.7
                                                       --------------------    --------------------     
Underwriting (loss) gain                                $   (5.5)    $  6.9     $  (17.4)   $  (5.0)
                                                       ====================    ====================
                                                       
</TABLE>                                                       
                                                                                
Personal segment net premiums earned increased $4.7 million,  or  3.3%
to  $145.7  million  for the quarter ended September  30,  1997,  from
$141.0  million  for  the quarter ended September 30,  1996.  Personal
segment  net  premiums  earned increased $19.4 million,  or  4.7%,  to
$432.7  million  for the nine months ended September  30,  1997,  from
$413.3  million  for the nine months ended September 30,  1996.   This
increase  is primarily attributable to rate increases in the  personal
automobile and homeowners lines, a 3.2% increase in policies in  force
in  the homeowners line, and a decrease in premiums ceded to the MCCA.
The non-recurring decrease in premiums ceded to MCCA was a result of a
lower  surcharge  effective January 1, 1997  for  personal  automobile
policies  written.   These factors were partially  offset  by  a  0.5%
decrease  in policies in force in the personal automobile  line  since
September  30,  1996, attributable to continued strong competition  in
Michigan.

The  personal  segment  underwriting loss was  $5.5  million  for  the
quarter ended September 30, 1997 compared to an  underwriting gain  of
$6.9 million for the quarter ended September 30, 1996.  The decline in
underwriting  results is primarily due to an increase  in  catastrophe
losses  of  $9.2 million, primarily in the homeowners line,  and  less
favorable  claims  activity in prior accident years  in  the  personal
automobile  line.  Policy acquisition and other underwriting  expenses
decreased   $1.2  million,  or  3.1%,  to  $37.3  million,  reflecting
reductions  in  employee  related expenses,  partially  offset  by  an
increase in policy acquisition expenses reflecting the growth  in  net
premiums earned.

The  personal segment underwriting loss was $17.4 million for the nine
months  ended  September  30, 1997 compared to  $5.0  million  in  the
comparable  1996  period.   The decline  in  underwriting  results  is
primarily  due  to  less favorable claims activity in  prior  accident
years  in  the  personal automobile line.  Additionally,  the  Company
experienced an increase in claim severity in the homeowners  line  for
the  current  accident year, primarily in the first  quarter.   Policy
acquisition and other underwriting expenses increased $1.8 million, or
1.6%, to $114.5 million, reflecting the growth in net premiums earned,
partially offset by reductions in employee related expenses.



                                    9
==========================================================================



Commercial segment

Commercial segment premiums represented 32.1% and 33.1% of  total  net
premiums  earned for the quarters ended September 30, 1997  and  1996,
respectively.  Commercial segment premiums represented 31.8% and 34.0%
of  the  total net premiums earned for the nine months ended September
30, 1997 and 1996 respectively.

<TABLE>
<S>                                                       <C>        <C>        <C>         <C>

                                                       --------------------    --------------------
For the Periods Ended                                       Three Months           Nine Months      
September 30, (in millions)                                1997       1996        1997        1996  
                                                       --------------------    --------------------  
                                                                                                     
Net premiums earned                                      $  68.9    $  69.8    $  201.9    $  213.1  
                                                                                                     
Losses and loss adjustment expenses                         57.3       45.0       151.4       151.8  
                                                                                                     
Policy acquisition and other underwriting expenses                                                   
                                                            18.2       18.6        53.5        53.3
                                                                                                     
Policyholders' dividends                                     1.3        2.0         4.7         5.6  
                                                       --------------------    --------------------
Underwriting (loss) profit                               $  (7.9)    $  4.2     $  (7.7)     $  2.4  
                                                       ====================    ====================

</TABLE>


Commercial  segment  net premiums earned decreased  $0.9  million,  or
1.3%,  to  $68.9  million  for the quarter ended  September  30,  1997
compared  to $69.8 million for the quarter ended September  30,  1996.
Commercial  segment net premiums earned decreased  $11.2  million,  or
5.3%,  to $201.9 million for the nine months ended September 30,  1997
from  $213.1  million  for the nine months ended September  30,  1996.
This  decrease  is  attributable to decreases in  rates  for  workers'
compensation,  resulting  from  continued  competitive  conditions  in
Michigan, partially offset by growth in the commercial multiple  peril
and  commercial automobile lines.  Rates in the workers'  compensation
line were decreased 6.4% and 8.7% effective June 1, 1996 and March  1,
1997,  respectively.   Management believes competitive  conditions  in
Michigan in the workers' compensation line may impact future growth in
net premiums earned.

The  commercial  segment underwriting loss was $7.9  million  for  the
quarter  ended September 30, 1997 compared to a profit of $4.2 million
in  September  30,  1996.   The  decline in  underwriting  results  is
primarily  attributable to lower net premiums earned in  the  workers'
compensation line, an increase in catastrophe losses of $3.7  million,
primarily in the commercial multiple peril line, and increased current
year  claim  severity in the commercial multiple peril and  commercial
automobile lines.  Policy acquisition and other underwriting  expenses
decreased   $0.4  million,  or  2.2%,  to  $18.2  million,  reflecting
reductions in employee related expenses in 1997.

The commercial segment underwriting loss was $7.7 million for the nine
months  ended September 30, 1997, compared to an underwriting gain  of
$2.4  million  for the same period 1996.  The decline in  underwriting
results is primarily attributable to lower net premiums earned in  the
workers'  compensation line and increased current year claim  severity
in the commercial multiple peril line, partially offset by an increase
in  favorable  development  of  prior  year  claims  in  the  workers'
compensation line.  Policy acquisition and other underwriting expenses
increased   $0.2  million,  or  0.4%,  to  $53.5  million,  reflecting
increased  technology  expenses  partially  offset  by  reductions  in
employee related expenses in 1997.



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



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 September 30, (in millions)             1997           1996 
                                                        ------------   ------------ 
                                                                                    
Reserve for losses and LAE, beginning of period          $   1,238.5    $   1,291.6 
                                                                                    
Reserve for losses and LAE, net of reinsurance                                      
recoverable:
                                                                                    
     Provision for insured events of the current               526.2          483.4 
     period
                                                                                    
     Decrease in provision for insured events of prior         (37.8)         (26.0) 
     years
                                                        ------------   ------------                           
Total incurred losses and LAE                                  488.4          457.4 
                                                                                    
                                                                                    
                                                                                    
Payments, net of reinsurance recoverable:                                           
                                                                                    
     Losses and LAE attributable to insured events of          272.9          249.3 
     current period
                                                                                    
     Losses and LAE attributable to insured events of          223.7          201.7 
     prior years
                                                        ------------   ------------                            
Total payments                                                 496.6          451.0 
                                                                                    
                                                                                    
Change in reinsurance recoverable on unpaid losses               0.5           24.0 
                                                        ------------   ------------                            
                                                                                    
Reserve for losses and LAE, end of period                $   1,230.8    $   1,322.0 
                                                        ============   ============                         

</TABLE>


As part of an ongoing process, the reserves have been re-estimated for
all prior accident years and were decreased by $37.8 million and $26.0
million,  for  the  nine months ended September  30,  1997  and  1996,
respectively.   The  favorable  reserve  development  in  both   years
primarily  reflects  the initiatives taken by the  Company  to  manage
medical  costs  in  the personal automobile and workers'  compensation
lines,  as well as the impact of the Michigan Supreme Court ruling  on
workers' compensation indemnity payments, which decreases the  maximum
amount  to  be  paid  for indemnity cases on all existing  and  future
claims.   The  decrease in reserves for all prior accident  years  was
$2.2  million, and $11.7 million, for the three months ended September
30,  1997  and  1996,  respectively.   The  Company  believes  reduced
favorable reserve development may continue to impact future earnings.

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.
A  significant change to the estimated reserves could have a  material
impact on the results of operations.



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



Investment Results
------------------

Net investment income before taxes was $25.2 million and $23.6 million
for the quarters ended September 30, 1997 and 1996, respectively.  The
increase  is the result of an increase in average invested assets  and
the  Company's  portfolio  shift  from  equity  securities  to  higher
yielding debt securities, including longer duration and non-investment
grade  securities,  partially offset by a  $2.2  million  decrease  in
income  from limited partnership investments.  Investment  income  for
the  quarter ended September 30, 1996 included the result of a  change
in  estimated  equity  earnings from a  limited  partnership  of  $2.6
million.  The average pre-tax yields on debt securities were  6.7%  in
1997  and  6.5% in 1996. Net investment income after taxes  was  $20.8
million  and $19.2 million for the quarters ended September  30,  1997
and  1996,  respectively.  Net realized gains  on  investments  before
taxes  were  $8.3  million during the third quarter of  1997  and  net
realized losses on investments before taxes were $0.8 million in 1996.

Net investment income before taxes was $74.9 million and $64.4 million
for  the  nine months ended September 30, 1997 and 1996, respectively.
The  increase is the result of an increase in average invested  assets
and  the  Company's portfolio shift from equity securities  to  higher
yielding debt securities, including longer duration and non-investment
grade securities.  The average pre-tax yields on debt securities  were
6.7% in 1997 and 6.3% in 1996.  Net investment income after taxes  was
$61.8  million  and $53.3 million for the nine months ended  September
30,  1997  and 1996, respectively.  Net realized gains on  investments
before  taxes  were $27.4 million and $14.2 million during  the  first
nine months of 1997 and 1996 respectively.  Net realized gains in 1997
and   1996  primarily  resulted  from  sales  of  appreciated   equity
securities.


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

The  Company's  investment  portfolio  increased  $85.9  million,   to
$1,691.1  million during the first nine months of 1997, from  $1,605.2
million  at  December  31,  1996.   Debt  securities  increased  $99.4
million,  to  $1,497.7 million, from $1,398.3 million, and represented
88.6%  and 87.1% of the carrying value of all investments at September
30,  1997  and  December  31, 1996, respectively.   This  increase  is
consistent with the Company's strategy of increasing the level of debt
securities  in  the portfolio. This was accomplished by  reducing  the
level  of equities in the portfolio, which resulted in a $14.8 million
decrease  in  equity securities to $177.5 million as of September  30,
1997.    Tax-exempt  securities  represented   64.9%  of  total   debt
securities  at  September 30, 1997 compared to 69.9% at  December  31,
1996.  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  September
30,  1997 was $128.1 million compared to $92.8 million at December 31,
1996. Unrealized appreciation during the first nine months of the year
was  $24.2  million for bonds, and unrealized appreciation  on  equity
securities and other investments was $11.1 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.



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



Net  cash provided by operating activities, for the nine months  ended
September 30, 1997, was $35.2 million compared to $58.5 million in the
prior year period.  This decrease is primarily attributable to a $22.5
million increase in underwriting loss.

Net  cash  used  for  investing activities for the Company  was  $22.8
million and $53.9 million for the first nine months of 1997 and  1996,
respectively.  The decrease in net cash used for investing  activities
is  consistent  with  the decrease in net cash provided  by  operating
activities, which is typically invested in fixed income securities.

Net  cash  used  for  financing activities for the  Company  was  $5.2
million and $16.4 million, for the first nine months of 1997 and 1996,
respectively.  This decrease in net cash used for financing activities
was due to the repurchase of $11.1 million of treasury stock in 1996.

Shareholders'  equity  was $834.6 million,  or  $23.64  per  share  at
September  30,  1997,  compared to $715.3,  or  $20.26  per  share  at
December  31,  1996, resulting from higher 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.

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.


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 1997 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  1996  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
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.



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

          On July  11, 1997, a report on Form 8-K was filed under Item 5,
          Other Events, the Registrant's announcement
          that third quarter results will be impacted by an estimated $10
          million in pre-tax catastrophe losses resulting
          from tornadoes and windstorms which struck Michigan during the
          first week of July 1997.
                                   
                                   

                                   14        
==========================================================================
                                   
                                   
                                     
                              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  November 13, 1997            /s/ John F. O'Brien
       -----------------            -----------------------------
                                    John F. O'Brien
                                    President and Chief Executive 
                                    Officer, and
                                    Chairman of the Board




Dated  November 13, 1997            /s/ Edward J. Parry, III
       -----------------            -----------------------------
                                    Edward J. Parry, III
                                    Vice President, Chief Financial 
                                    Officer, Treasurer and Principal 
                                    Accounting Officer



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