FORM 10-Q
                                   
                             UNITED STATES
                  SECURITIES AND EXCHANGE COMMISSION
                         Washington, DC 20549
                          ------------------         
                                   
                               (Mark One)
      [X]QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
                    SECURITIES EXCHANGE ACT OF 1934
         For the quarterly period ended: March 31, 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: 35,269,100
Shares of Common Stock Outstanding, as of May 1, 1997.


                                  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 Cash Flows                6
           Notes to Consolidated Financial Statements           7


   ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS
             OF FINANCIAL CONDITION AND RESULTS OF
             OPERATIONS                                         8 - 12
             


PART II - OTHER INFORMATION



   ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K                   13





SIGNATURES                                                     14




                                  2
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                    PART 1 - FINANCIAL INFORMATION
                                   
                     ITEM 1 - FINANCIAL STATEMENTS

                         CITIZENS CORPORATION
                   CONSOLIDATED STATEMENTS OF INCOME
                   
<TABLE>                                               
<S>                                                   <C>          <C>
                  
                                                             (Unaudited)
                                                          Three Months Ended
(In millions, except per share data)                          March 31,
                                                           1997         1996
                                                          -------------------
                                                          
Revenues                                                          
 Net premiums written                                  $   211.9    $   215.9
 Change in unearned premiums, net                                            
   of prepaid reinsurance premiums                           2.0         11.4
                                                       ---------    ---------
 Net premiums earned                                       209.9        204.5
 Net investment income                                      23.6         19.6
 Net realized gains on investments                          19.7         14.7
 Other income                                                1.5          0.5
                                                       ---------    ---------
Total revenues                                             254.7        239.3
                                                       ---------    ---------
                                                                         
Expenses                                                                     
 Losses and loss adjustment expenses                       158.5        155.5
 Policy acquisition and other underwriting expenses         58.3         53.8
 Policyholders' dividends                                    1.6          1.8
                                                       ---------    ---------
    Total expenses                                         218.4        211.1
                                                       ---------    ---------
                                                                         
 Income before federal income taxes                         36.3         28.2
                                                                             
Federal income tax expense                                   7.9          5.7
                                                       ---------    ---------
Net Income                                             $    28.4    $    22.5
                                                       =========    =========       
Per share data                                                    
                                                                  
  Net income                                           $    0.80    $    0.63
                                                       =========    =========                  
Dividends declared to shareholders                     $    0.05    $    0.05
                                                       =========    =========                  
Weighted average shares outstanding                         35.3         35.8
                                                       =========    =========



  The accompanying notes are an integral part of these financial statements  
                                                       
</TABLE>


                                  3
======================================================================

<TABLE>
<S>                                                    <C>         <C>       
                          CITIZENS CORPORATION 
                      CONSOLIDATED BALANCE SHEETS
                      
                                   
                                   
                                                         (Unaudited)         
(In millions, except per share data)                      March 31,    December 31,
                                                            1997           1996
                                                        ---------------------------    
Assets                                                                
Investments:                                                                     
 Debt securities available-for-sale, at fair value      $   1,426.7   $   1,398.3
  (Amortized cost of $1,419.6 and $1,366.9)                                      
 Equity securities available-for-sale, at fair value          138.5         192.3
  (Cost of $94.8 and $132.3)                                                      
 Other investments, at fair value (Cost of $13.2 in            14.3          14.6
   1997 and 1996)                                        ----------   -----------
   Total investments                                        1,579.5       1,605.2
 Cash and cash equivalents                                     46.9          36.1
 Accrued investment income                                     24.5          25.3
 Premiums receivable                                          142.0         140.3
 Reinsurance recoverable on paid and unpaid balances          468.3         476.8
 Prepaid reinsurance premiums                                  60.1          62.8
 Deferred policy acquisition expenses                          54.6          54.3
 Deferred federal income taxes                                 39.5          25.4
 Other assets                                                  75.8          76.8
                                                         ----------   -----------
   Total assets                                          $  2,491.2   $   2,503.0
                                                         ==========   ===========
                                                                              
Liabilities and Shareholders' Equity                                             
Liabilities:                                                                     
 Reserve for losses and loss adjustment expenses         $  1,224.1   $   1,238.5
 Unearned premiums                                            361.6         362.3
 Other liabilities                                            151.1         147.7
                                                         ----------   -----------
   Total liabilities                                        1,736.8       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                                            579.1         552.5
 Unrealized appreciation on investments, net of                                  
   deferred federal income taxes                               33.8          60.5
 Treasury stock, at cost (0.8 million shares in 1997          (15.0)        (15.0)
   and 1996)                                             ----------   ----------- 
    Total shareholder's equity                                754.4         754.5
                                                         ----------   -----------
     Total liabilities and shareholder's equity          $  2,491.2   $   2,503.0
                                                         ==========   ===========


    The accompanying notes are an integral part of these financial statements
    

</TABLE>
                                  4
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<TABLE>
<S>                                              <C>             <C>     
     
                         CITIZENS CORPORATION
            CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY


                                                           (Unaudited)
                                                       Three Months Ended
(In millions, except per share data )                       March 31,
                                                      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 and end of period               552.5             475.5
 Net income                                            28.4              22.5
 Dividends declared to shareholders                    (1.8)             (1.8)
                                                 ----------       -----------
 Balance at end of period                             579.1             496.2
                                                 ----------       -----------
                                                                      
Unrealized appreciation on investments, net                                  
 Balance at beginning of period                        60.5              54.7
 Depreciation during the period                       (40.9)            (22.9)
 Benefit for deferred federal income taxes             14.2               8.0
                                                 ----------       -----------
 Balance at end of period                              33.8              39.8
                                                 ----------       -----------
                                                                      
Treasury stock                                                               
 Balance at beginning of period                       (15.0)             (3.9)
 Shares purchased at cost                                 -              (2.2)
                                                 ----------       -----------
 Balance at end of period                             (15.0)             (6.1)
                                                 ----------       -----------
                                                                             
Total shareholders' equity                       $    754.4         $   686.4
                                                 ==========       ===========


   The accompanying notes are an integral part of these financial statements
   
</TABLE>

                                  5
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<TABLE>
<S>                                                      <C>           <C>
                                   
                                   
                         CITIZENS CORPORATION
                 CONSOLIDATED STATEMENTS OF CASH FLOWS



                                                                  (Unaudited)
                                                               Three Months Ended
(In millions, except per share data )                               March 31,
                                                               1997            1996
                                                               --------------------
Cash flows from operating activities                                     
Net income                                                $     28.4     $     22.5
Adjustments to reconcile net income to                                             
 net cash provided by operating activities:                                        
 Net realized gains on investments                             (19.7)         (14.7)
 Deferred federal income tax provision                           0.1            3.3
 Change in assets and liabilities:                                                 
  Deferred policy acquisition expenses                          (0.3)          (1.7)
  Premiums and notes receivable, net of reinsurance             (0.5)          (8.8)
   premiums
  Unearned premiums, net of prepaid reinsurance                  1.9           11.4
   premiums
  Reserve for losses and loss adjustment expenses,              (5.9)          (2.3)                    
   net of reinsurance recoverable                               
  Other, net                                                    (1.6)          (8.4)
                                                          ----------     ----------
   Net cash provided by operating activities                     2.4            1.3
                                                          ----------     ----------
                                                                              
Cash flows from investing activities                                               
 Proceeds from sale of available-for-sale debt                 128.6          138.9
  securities
 Proceeds from available-for-sale debt securities               32.8           23.1
  maturing or called
 Proceeds from sale of available-for-sale equity                59.6           57.9
  securities and other investments
 Purchases of available-for-sale debt securities              (214.2)        (237.6)
 Purchases of sale of available-for-sale equity                 (3.0)         (17.8)
  securities and other investments
 Change in net receivable from securities                        6.7           42.5
  transactions not settled
 Other investing activities                                     (0.3)          (0.5)
                                                          ----------     ----------
   Net cash provided by investing activities                    10.2            6.5
                                                          ----------     ----------                    
Cash flows from financing activities                                               
 Dividends paid to shareholders                                 (1.8)          (1.8)
 Treasury stock purchased, at cost                                 -           (2.2)
                                                          ----------     ----------
  Net cash used for financing activities                        (1.8)          (4.0)
                                                          ----------     ----------
                                                                              
Change in cash and cash equivalents                             10.8            3.8
Cash and cash equivalents at beginning of period                36.1           59.1
                                                          ----------     ----------
Cash and cash equivalents at end of period                $     46.9     $     62.9
                                                          ==========     ==========


    The accompanying notes are an integral part of these financial statements
    
</TABLE>

                                  6
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                         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.  The  financial
statements should be read in conjunction with the financial statements
included  in  the Company's Annual Report on Form 10-K, for  the  year
ended December 31, 1996.

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.


2.     Earnings per Share

Earnings per share are based on the weighted average number of  common
shares and common share equivalents. The Board of Directors authorized
the  repurchase  of  1.8  million shares or slightly  less  than  five
percent  of its issued common stock and has purchased a total  of  0.8
million  shares since the implementation of the repurchase program  in
1995.   As  of March 31, 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
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                    PART I - FINANCIAL INFORMATION
                                   
                                ITEM 2
                                   
           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                  CONDITION AND RESULTS OF OPERATIONS

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


Results of Operations
---------------------

Net income

Net income for the quarter ended March 31, 1997, was $28.4 million, or
$0.80 per common share, compared to $22.5 million, or $0.63 per common
share, for the quarter ended March 31, 1996.  Excluding realized gains
and  losses, net of taxes, net income increased $2.7 million, to $15.6
million,  for the quarter ended March 31, 1997.  The increase  in  net
income is primarily attributable to an increase in realized gains  and
investment   income,  partially  offset  by  a  slight   increase   in
underwriting loss.  Realized gains were $19.7 million during the first
quarter  of  1997,  versus $14.7 million during the first  quarter  of
1996,  an  increase  of $5.0 million.   Net realized  gains  primarily
reflect  sales  of  equity  securities in both  periods.    Investment
income  increased 20.4%, to $23.6 million during the first quarter  of
1997,  versus $19.6 million in 1996.  This was due to a 6.2%  increase
in  average  invested assets and to an increase in average  yields  on
fixed maturity securities from 5.9% to 6.8%.  Total underwriting  loss
increased  from  $6.6 million in the first quarter  of  1996  to  $7.4
million  in  the  first  quarter of 1997, reflecting  an  increase  in
catastrophe losses from $4.8 million to $5.4 million.


Revenues

Net  premiums  earned  increased $5.4  million,  or  2.6%,  to  $209.9
million, for the quarter ended March 31, 1997, resulting from an  $8.6
million increase in the Company's personal lines partially offset by a
$3.2  million decrease in the Company's commercial lines. The  overall
growth  is due to increases in net premiums earned of $3.4 million  in
Ohio  and Indiana resulting from expansion in these states, to a  $3.0
million decrease in premiums ceded to the Michigan Catastrophic Claims
Association  (MCCA),  and  to  increases 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 68.5% and 66.1%  of  total  net
premiums  earned  for  the quarters ended March 31,  1997,  and  1996,
respectively.

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

                                                          -------------------------                        
For the Quarters Ended                                        1997            1996      
March 31 (in millions)                                    -------------------------                        
                                                                                     
Net premiums earned                                       $   143.7       $   135.1  
                                                                                     
Losses and loss adjustment expenses                           113.8           107.4  
                                                                                     
Policy acquisition and other underwriting expenses             39.5            36.4 
                                                          ---------       ---------
Underwriting loss                                         $    (9.6)      $    (8.7) 
                                                          =========       =========


</TABLE> 
                                                                             
        
Personal segment net premiums earned increased $8.6 million, or  6.4%,
to  $143.7  million for the quarter ended March 31, 1997, from  $135.1
million  for  the  quarter ended March 31,  1996.   This  increase  is
primarily attributable to a decrease in premiums ceded to the MCCA and
to  increases in personal automobile and homeowners rates.   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 2.0%  decrease  in
policies  in  forces in the personal automobile line since  March  31,
1996, attributable to continued strong competition in Michigan.

The  personal  segment  underwriting loss was $9.6  million  and  $8.7
million  for the quarters ended March 31, 1997 and 1996, respectively.
Catastrophe  losses increased $1.2 million over the prior  year  first
quarter,  primarily  in the homeowners line.  Policy  acquisition  and
other  underwriting expenses increased $3.1 million, or 8.5%, to $39.5
million,  reflecting the growth in net premiums earned  and  increased
technology expenses in 1997.


Commercial segment

Commercial segment premiums represented 31.5% and 33.9% of  total  net
premiums  earned  for  the quarters ended March  31,  1997  and  1996,
respectively.

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

                                                          ------------------------                            
For the Quarters Ended                                         1997           1996        
March 31 (in millions)                                    ------------------------                            
                                                                                      
Net premiums earned                                       $     66.2    $     69.4    
                                                                                      
Losses and loss adjustment expenses                             44.7          48.1    
                                                                                      
Policy acquisition and other underwriting expenses              17.7          17.4    
                                                                                      
Policyholders' dividends                                         1.6           1.8
                                                          ----------    ----------
Underwriting profit                                       $      2.2    $      2.1
                                                          ==========    ==========
                                                          

</TABLE>  
                                  9
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Commercial  segment  net premiums earned decreased  $3.2  million,  or
4.6%, to $66.2 million for the quarter ended March 31, 1997 from $69.4
million  for  the  quarter ended March 31,  1996.   This  decrease  is
attributable   to  decreases  in  rates  for  workers'   compensation,
resulting  from continued competitive conditions in Michigan  in  this
line.  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 profit was $2.2 million and  $2.1
million  for the quarters ended March 31, 1997 and 1996, respectively.
Losses  and  LAE  in  the workers' compensation  line  decreased  $5.7
million, or 28.9%, to $14.0 million primarily as a result of favorable
claims activity in prior accident years.  Policy acquisition and other
underwriting  expenses  increased $0.3  million,  or  1.7%,  to  $17.7
million, reflecting increased technology expenses in 1997.


Reserve for Losses and Loss Adjustment Expenses
-----------------------------------------------

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

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

                                                                               
For the period ended March 31   (in millions)             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           179.0         163.6 
     period
                                                                               
     Decrease in provision for insured events of           (20.5)         (8.1) 
     prior years                                    ------------  ------------
                                                                               
Total incurred losses and LAE                              158.5         155.5 
                                                                               
                                                                               
                                                                               
Payments, net of reinsurance recoverable:                                      
                                                                               
Losses and LAE attributable to insured events of            57.9          56.1 
     current period
                                                                               
Losses and LAE attributable to insured events of           104.7          95.0 
     prior years                                    ------------  ------------
                                                                               
Total payments                                             162.6         151.1 
                                                                               
                                                                               
                                                                               
Change in reinsurance recoverable on unpaid losses         (10.3)         13.9 
                                                     -----------  ------------                        
                                                                               
                                                                               
Reserve for losses and LAE, end of period           $    1,224.1  $    1,309.9 
                                                    ============  ============
</TABLE>
                                                                               


As part of an ongoing process, the reserves have been re-estimated for
all prior accident years and were decreased by $20.5 million, and $8.1
million, for the quarters ended March 31, 1997 and 1996, respectively.
The favorable reserve development in both years primarily reflects the
initiatives  taken  by  the Company to manage medical  costs  in  both
automobile  lines and the workers' compensation line, 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.


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

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.

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

Net investment income before taxes was $23.6 million and $19.6 million
for  the  quarters  ended March 31, 1997 and 1996, respectively.   The
increase  is  the result of 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  6.8% in 1997 and 5.9% in 1996.    Net
investment income after taxes was $19.8 million and $16.2 million  for
the  quarters  ended  March  31, 1997  and  1996,  respectively.   Net
realized  gains  on  investments before taxes were $19.7  million  and
$14.7  million during the first quarter 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  decreased  $25.7  million,   to
$1,579.5 million during the quarter, from $1,605.2 million at December
31,  1996.   Debt  securities  increased $28.4  million,  to  $1,426.7
million, from $1,398.3 million, and represented 90.3% and 87.1% of the
carrying  value of all investments at March 31, 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 $53.8  million  decrease  in  equity
securities to $138.5 million in the first quarter of 1997.  Tax-exempt
securities  represented 66.7% of total debt securities  at  March  31,
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 March  31,
1997 was $51.9 million compared to $92.8 million at December 31, 1996.
Unrealized  depreciation in the quarter was $24.3 million  for  bonds,
and unrealized depreciation on equity securities and other investments
was $16.6 million.


Liquidity and Capital Resources
-------------------------------

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

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

Net cash provided by operating activities, for the quarter ended March
31,  1997, was $2.4 million compared to $1.3 million in the prior year
period.
                   
                                  11                            
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Net  cash  provided by investing activities for the Company was  $10.2
million  and $6.5 million for the first quarters ended 1997 and  1996,
respectively.   The  increase  in  net  cash  provided  by   investing
activities was attributable to decreased purchases of debt securities.

Net  cash  used  for  financing activities for the  Company  was  $1.8
million  and  $4.0 million, for the first quarters of 1997  and  1996,
respectively.  This decrease in net cash used for financing activities
was due to the repurchase of $2.2 million of treasury stock in 1996.

Shareholders' equity was $754.4 million at March 31, 1997, compared to
$754.5  million at December 31, 1996, both $21.39 per share  resulting
from   higher   net  income  offset  by  unrealized  depreciation   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, 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.




                                  12
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                       PART II - OTHER INFORMATION
                                   
                                ITEM 6
                                   
                    Exhibits and Reports  on Form 8-K


(a)       Exhibits

          EX-11     Statement regarding computation of per share earnings.
          
          EX-27     Financial Data Schedule
          
           .
(b)       Reports on Form 8-K

          None
          
                                   
                                   
                                  13 
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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     May 14, 1997         /s/ John F.O'Brien
                               ------------------------------------------
                               John F. O'Brien
                               President and Chief Executive Officer, and
                               Chairman of the Board
                               

                                
                                
Dated     May 14, 1997         /s/ Edward J.Parry, III
                               ------------------------------------------
                               Edward J. Parry, III
                               Vice President, Chief Financial Officer,
                               Treasurer and Principal Accounting Officer
                               





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